Cash Flow Analysis for Ching's World Restaurant

The new restaurant, Ching's World, will offer a range of products including Chinese and Indian dishes. The business plan outlines the financials for the year 2015, including cash inflows and outflows. The main expenses include interest, cost of inventory, utility and maintenance expenses, salaries and wages, delivery expenses, marketing and promotion, miscellaneous expenses, investment in furniture and infrastructure, and rent. Despite these expenses, the company is expected to earn a profit by carrying out its operations. The restaurant will focus on serving the entire UK market, with moderate prices and high-quality services. The unique features of the business include skilled staff members and high-quality services. The UK restaurant market is growing at a fast pace, with a high demand for different types of food items.

BUSINESS PLAN
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TABLE OF CONTENTS
1 Background........................................................................................................................................3
2 Company overview............................................................................................................................3
3 The industry.......................................................................................................................................4
4 Product...............................................................................................................................................4
5 Environmental analysis.....................................................................................................................5
6 Competitive analysis.........................................................................................................................7
7 Unique selling proposition................................................................................................................9
8 Industry analysis................................................................................................................................9
9 SWOT analysis................................................................................................................................11
10 Marketing mix...............................................................................................................................12
11 Sales channel.................................................................................................................................14
12 Management team.........................................................................................................................14
13 Operations......................................................................................................................................14
14 Financial projection.......................................................................................................................15
15 Funding request.............................................................................................................................15
REFERENCES...................................................................................................................................16
APPENDIX........................................................................................................................................17
Appendix-1.........................................................................................................................................17
Appendix-2.........................................................................................................................................18
Appendix-3.........................................................................................................................................19
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1 Background
Restaurant market of UK is growing at faster pace and this directly depends on the
consumption patterns of consumers living in the society. Further, people living in the society have
high purchasing power due to which they prefer to visit different restaurants and demand for
different type of food items is quite high. Moreover, it is estimated that growth of entire restaurant
sector will double from 1.3 percent to 2.5 percent over the next three years. In short, the entire
branded sector can reach £ 17.6 bn with an annual growth rate of 2.8 percent (Michel, 2014). This
data supports in knowing that demand for restaurant in market of UK is rising rapidly and one of
the reason behind same can be rise in purchasing power of people in the society and they prefer to
consume restaurant food. This growth rate has been expected by considering the present market
condition where all the businesses are able to generate higher profits and sales level is also high.
Moreover, sales of every restaurant are rising at faster pace which are operating in the market of
UK. New and traditional food is estimated to be the strongest growing branded segment where sales
grew by 12.4 percent. Apart from this demand for Chinese food is quite high where majority of the
people living in society prefers to consume wide range of products and it directly matches with their
taste.
Restaurant industry of UK is worth over £ 40 billion (Angelis, 2013) and majority of the
consumers prefer to engage and they enjoy the food industry across several channels. Further,
competition level in the entire sector is rising at faster pace and due to this reason consumers are
having many option at the time they select any restaurant for consuming different items. Generally
restaurants can be classified into different types such as fine dining, Indo- chinese, continental etc.
Moreover, consumers prefer to consume restaurant food on the basis of their culture and other type
of requirement (Angelis, 2013). Apart from this developed economy of UK also provides base to
every sector and in turn it becomes easy to enhance profitability level.
2 Company overview
The new restaurant named Ching's world will offer large number of Indo- Chinese food
items to its target market whose taste will be unique. Further, in starting restaurant will operate on
smaller basis so that it can be known whether consumers prefer to consume Indo-Chinese items or
not. The new restaurant is entering into the market of London by providing high quality food items
which is suitable for customers in terms of taste and other type of requirement. Each and every
consumable item kept by is unique and they are not served by other restaurants operating in the
market (Brotherton, 2012). Apart from this, restaurant has focused mainly on quality and price of its
services so that it is possible to retain valuable customers for longer period of time. Further, it is
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well known fact that before selecting any restaurant large number of factors are considered by
customers such as its ambience, range of food items, price etc. Therefore, management has
considered all these factors so that need of target market can be satisfied in efficient manner. This
can serve as profitable for business in every possible manner and can assist business in gaining
competitive advantage. Indo- Chinese items such as Chili chicken, Chicken fried rice, egg noodles,
vegetable Manchurian, Orange Chicken etc will be served to target market and this will support
business in attracting customers.
3 The industry
London is regarded as the development of numerous upscale restaurant where people living
in the society prefers to consume different type of food items such as Chinese, continental, Italian
etc. Further, in country like UK Chinese along with Indian restaurants are popular and they are
among the worst hit in recession. At present large number of restaurants are operating in the market
of UK who are offering Indo- Chinese food and this attract customers. Turnover in the overall
restaurant sector has reached £ 21.6 bn in the year 2014, up from £ 15.5 bn in the year 2010
(Jefford, 2015). Further, consumer wages are rising at faster pace and due to this reason they prefer
to spend more funds in purchasing restaurant services and this provides them value for money
experience. Strong growth in restaurant sector is allowing more businesses to invest in this sector
and in turn it is possible to grab market opportunities.
Vision: The main vision of Ching's world will be “To be well known in the market for range of
services, to have best staff and to offer high quality service to target market”. This vision statement
highlights that business enterprise is capable enough to serve its customers in appropriate manner
and this is acting as an development tool.
Mission: Main mission of Ching's world is “To sell delicious Indo-Chinese food to customers which
is value for money and highly differentiated too”. So, the mission of Ching's world shows that
quality is kept on top of priority by management for satisfying need of its target market.
4 Product
Products are developed by firm keeping in view taste and requirement of target market and
this can surely provide remarkable experience to the customers. Further, the vision of Ching's world
can assist to develop effective plans and business can easily enhance overall strength of
organization. Product list of new restaurant has been shown below:
 Chili chicken
 Chicken fried rice
 Egg noodles
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 Chicken stir fry
 Schezwan sauce
 Chicken lollipop
 Wonton soup
 Hakka noodles
 Chicken noodles soup
 Egg and Chessey bun
 Stuffed Mushroom
 Orange chicken
So these are some of the products which will be offered by Ching's world to its target market
and it can surely provide remarkable experience to the customers are they are of high quality.
Further, products are unique with the help of which it is possible for new restaurant to deal with the
condition of rise in competition level in the market. Each and every product has been added in the
range by considering overall requirement of target market and it can surely support in enhancing
overall profitability along with sales volume of company. Apart from this, timely new products will
be added in the product range so that need of target market can be satisfied efficiently. Moreover,
option of home delivery has also kept by firm so as to provide more convenience to customer.
5 Environmental analysis
Competitive strategy (Porter generic model)
In order to gain competitive advantage it is necessary for business to adopt effective
strategies with the help of which overall performance in the market can be enhanced easily. Porter
generic model takes into consideration strategies such as cost leadership, differentiation and focus
group. Ching's world has adopted cost leadership strategy where all the services will be offered to
target market at moderate price and through this it is possible for target market to retain its valuable
customers. Moreover, it is possible that high prices set will prevent customers from purchasing
services of restaurant and due to this reason prices have been kept moderate by management so that
each and every type of customer can purchase services (Maumbe, 2012). Differentiation as a
strategy has also been adopted by company where every food item is different from those served by
other restaurants in the market of UK. Moreover, due to high level of competition differentiation
strategy is necessary to be adopted as through this profitability along with sales level of company
can be enhanced easily and in turn acts as development tool for company. Focus strategy is also
effective as through this Ching's world can focus on its target market especially consumers who
prefer to eat Indo-Chinese items and this can have positive impact on brand image of company.
Therefore, these are some of the effective strategies with the help of which new business can
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operate efficiently in the market by serving its customers.
PESTLE analysis
Their exist large number of factors which can have direct impact on business operations.
Further, it is required for business to consider all the factors present in external environment so that
business can smoothly operate. Some of the factors affecting operations of Ching's world are as
follows: Political: This factor is linked with laws and regulations which every restaurant operating in
UK has to follow. Further, it is necessary to take license from government before setting up
restaurant (Jones, Hillier and Comfort, 2007). Taxes and payment of duties is necessary for
every firm operating in hospitality sector and for Ching's world also same regulations are
applicable. Apart from this health regulations are present which are associated with food
preparation. Government of UK has introduced various laws such as health regulation
regarding food preparation. Further, labour laws are also present which needs to be followed
strictly by the new business. Ching’s world has to ensure that food being offered to target
market is of high quality and through this it is possible to meet with the requirement of
cutomers. Economical: Economy of UK is developed and due to this reason customers are having high
purchasing power and they prefer to eat food outside. Therefore, economic condition of
country is in favour of Ching's world as demand for Indo-Chinese food will not fluctuate
and business will receive good response from its target market. Further, economy of UK is
highly developed and purchasing power of individuals allows them to purchase restaurant
services. Further, growth in economy is indicating that people can be easily attracted
towards restaurant services and it is beneficial for businesses who are establishing business
in this sector. Social: This factor considers taste and preference of target market which changes rapidly.
Further, each and every food item has been decided by Ching's world as per taste of target
market and this can assist management in retaining its valuable customers. Apart from this
company will modify its product range as per change in requirement of target market so as
to serve customers better (Brotherton, 2012). At present trend in the market is associated
with healthy food and majority of the people are health conscious due to which Ching’s
world has to consider this factor. Delivering healthy food will support business in attracting
customers and they can be retained for longer period of time. Technological: It involves tools and techniques employed for serving customers so as to
enhance performance of firm. Ching's world will use advanced tools for cooking food and
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serving its target market. Moreover, advanced techniques will save time and cost of the
company. Further, entire restaurant industry has employed low technology and due to this
reason Ching’s world has to consider this factor where latest tools have to be employed as
per market trend. Legal: It considers the legal regulations passed by government which every restaurant has to
comply with. Ching's world has to pay taxes and other type of duties on time. Apart from
this company has to ensure that all its product range are of acceptable quality and for the
same firm has to comply with quality standards.
 Environmental: In the present era environmental burden of every enterprise is increasing at
faster pace and due to this reason it is necessary for Ching's world to adopt technique of
recycling waste so that its adverse impact on surroundings can be reduced to extent.
Porter five forces
This model supports in analysing the external environment of the business so that
management can take initiatives for its benefits and it directly supports in carrying out operations in
effective manner. Bargaining power of buyer: It is high in case of Ching's world as other restaurants are
operating in the market who are offering Indo- Chinese food to target market. Further, it is
necessary for business to target customers on the basis of their requirement so as to enhance
market share. In short large options present with target market allows them to dominate the
market. Bargaining power of supplier: In case of Ching's world major suppliers are associated with
food items such as vegetables and other kind of necessities. Bargaining power of supplier is
low as they are easily present in the market due to which it is possible for firm to select any
supplier who can offer best raw materials at an affordable price. Threat of new entrants: It is high as no such regulations are present and new businesses can
easily set up their restaurants. But on the other hand, high investment is required which
sometime can prevent businesses from entering into this sector. This directly leads to rise in
level of competition and is unfavourable for existing businesses. Threat of substitutes: It is low for Ching's world as business is offering highly differentiated
Indo- Chinese products to its target market whose substitutes may not be present in the
market. Therefore, it is required for business to focus on differentiation so that customers
can be retained for longer period of time.
 Rivalry among competitors: At present competition level is moderate in the market where
Ching's world will operate but it is necessary for business to highlight unique features of its
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products range so that customers can be easily attracted.
By applying different models it has become easy to understand the market condition and the
range of factors which can affect operations of new restaurant in the market. Further, it is necessary
to adopt effective strategies so that business performance may not be affected due to this. Moreover,
every product has to be as per requirement of target market so that they can be easily encouraged to
buy the services of restaurant.
6 Competitive analysis
For conducting overall competitor analysis different restaurants operating in the market of
UK have been chosen. All these competitors identified are selling substitute products as Ching’s
wolrd will offer. But on the basis of quality it is possible to differentiate its services from those of
other companies in the market. Apart from this, prices of products will be charged by business by
considering the competitors price and through this it is possible for organization to enhance market
performance.
So these are some of the major competitors of Ching's world who also offers same type of
Indo-Chinese food but taste of Ching's world food is unique and this can act as source of
competitive advantage for the business in the market. Apart from this, firm has hired experts who
have high experience in cooking Indo-Chinese food and this is directly beneficial for business
enterprise in every possible manner.
7 Unique selling proposition
In conclusion to the above competitive analysis it has been found that some unique selling
proposition of Ching's world is present which involves high quality, moderate price, delicious food
and wide range of services. All these attributes makes Ching's world different from its key
competitors and this can act as development tool for the business. Moreover, main aim of business
in near future is to expand its operations in the market and this can act as development tool for the
company. Generally, for new businesses it is necessary to identify the range of factors with the help
of which competitive advantage can be gained and for the present business all the factors listed
above will support in enhancing overall performance and can assist to become leader in the market.
In case of Ching’s world unique selling point will be high service quality, differentiated
services at moderate price, delicious food etc. Further, it is well known fact that Ching’s world will
operate in competitive market due to which it is necessarily required for business to focus on unique
selling point with the motive to enhance sales volume along with profitability level in the market.
High quality of service will allow business to focus on the key requirement of its target market and
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their needs can be easily satisfied as per their expectations. Moreover, providing delicious food will
assist business in attracting customers and through this it is possible to accomplish the desired aims
along with objectives.
8 Industry analysis
Hospitality sector of London is growing at faster pace and it is providing large number of
opportunities to restaurants operating in the market of UK. Further, it is estimated that growth rate
for the sector will double from 1.3 percent to 2.5 percent over the next coming years. The overall
segment can reach £ 17.6 bn up 6.5 percent with an annual growth rate of 2.8 percent. Every year
sales revenue of every restaurant is enhancing at faster pace as customers are demanding different
type of food items which can satisfy their need in efficient manner. Apart from this, purchasing
power of consumers living in society is also strong due to which they prefer to spend more income
on consuming different food items (2014 Restaurant Industry forecast., 2013). Further, at present
demand for Indo-Chinese food has risen at faster pace where unique type of dishes are preferred to
be consumed by people living in the society. Moreover, they are ready to spend large income on
consuming different food items and this enhances overall profitability level of the enterprise.
Industry analysis has shown the decision linked with implementation of new Indo-Chinese
restaurant is feasible and management can easily work on it. The entire sector is particularly diverse
and its range is from top end fine dining restaurant to quick service take away outlet. Eating out is
considered to be normal for people living in the society and the slow growth in economy of UK has
very less impact on restaurant industry as expected. On the other hand, pub restaurant channel is
most frequently visited by consumers in UK (Jones, Hillier and Comfort, 2007). Moreover, majority
of the consumers consider quality as most important factor while purchasing restaurant service and
due to this reason Ching's world has strongly focused on quality of its food items so that it is
possible to enhance satisfaction level of target market.
Industry conclusion
After reviewing the industry report it has been analysed that restaurant sector is growing at
faster pace and it is providing ample of opportunities to the businesses presently operating in the
market. Further, it can act as development tool for the new business such as Ching's world as
business can easily serve large number of customers in the market and can allow to raise
profitability along with sales level. Overall hospitality industry of UK is on growth stage and it has
capability to serve large number of customers in a short period of time. Therefore, the industry
analysis represents that for Ching's world entering into the restaurant sector is feasible and
profitable too.
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9 SWOT analysis
This tool is considered to be quite effective for carrying out internal analysis of the business.
Further, it allows management to know whether its strengths are effective enough to grab
opportunities present in the business environment or not.
Strengths
 Prices of Indo- chinese food is low as compared with competitors
 Unique service style
 Wide range of products
 Overall internal and external layout of restaurant is different
 Effective promotional strategies adopted Experienced chefs who have proper knowledge and skills
Weaknesses
 Newly established business
 lack of market knowledge
 Limited funds are available Products are offered which are already available in the market
Opportunities
 Rise in demand for Indo-Chinese food in market of UK
 Strong purchasing power of customers
 Introduction of new technology which can be used for serving customers Rise in expansion opportunities
Threats
 Rise in level of competition
 Government regulations
 Substitute products
 Frequent change in taste and preference of customers
So the SWOT analysis has supported in knowing that organization is effective enough in
satisfying need of its target market. Further, market trends are changing at faster pace due to which
modifications in service range is necessary as through this company can easily deal with
sustainability issues. Moreover, threats present in the market can be tackled easily by management
if effective strategies are developed and this can provide base to organization in serving its target
market. Apart from this, it is necessary for business to comply with government regulations so that
overall performance in the market can be enhanced easily. The major weakness of Ching's world is
that enterprise is newly developed due to which majority of the people are not well aware about its
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services in the market.
10 Marketing mix
Product
Ching's world will offer wide range of products to its target market as per taste and preference of its
target market. Further, the range of Indo-Chinese products involve:
 Chili chicken
 Manchurian
 Manchow soup
 Spring rolls
 Darsaan
 American Chop suey
 Date panckaes
 Chicken majestic with peppers
 Sesame chicken
 Shrimp Chowmein
 Chili paneer Tikka
 Egg and chessey bun
 Noodles Pakoras
 Stuffed Mushroom
 Zucchini pasta
 Lemon Coriander soup
All these are main products of Ching's world which will be offered to target market on the
basis of their taste and requirement. Apart from this company will differentiate its product range on
the basis of quality which will be kept high for attracting customers. In short, it can act as
development tool for the enterprise and can assist to grab opportunities present in the business
environment. Moreover, serving style of food is different from other companies and this is highly
beneficial for Ching's world as through this business can enhance its brand image.
Price
It is regarded as one of the most important factor and is considered by every consumer
before purchasing products. Before setting price of products Ching's world has considered its
competitors price so that low prices can be set as compared with them. Further, this can surely
support company to attract large number of customers in the market and can act as development
tool. Moreover, prices has been set by firm by considering all the major costs and this can assist
business to enhance profitability level. Apart from this, customers can be easily made brand loyal as
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they are getting high quality products at an affordable price. On the other hand, it is not necessary
that prices may remain fix as it can alter due to many condition such as rise in cost of raw materials
etc.
Place
It is associated with distribution channel with the help of which business can offer products
to its target market. Further, Ching's world will deliver entire range of services with the help of its
physical outlet. Company has designed infrastructure in unique manner and overall layout is totally
different which is capable enough to attract customers living in UK. Apart from this, restaurant is
located in middle of the city where each and every customer can approach easily and can take
benefit of the services. Restaurant of Ching's world will be located in Oxford Street which is easily
accessible by target market and firm can receive good response from the market. The place selected
for new business is expensive and therefore amount of £ 1100 has been charged as rent for the
place. Moreover, Oxford Street is well known for shopping where on daily basis millions of people
arrives and this can support in knowing the real benefits which company can obtain by setting up
business in the market. In short each and every customer arriving oxford street will prefer to try
Indo-Chinese food which is beneficial for organization. So, in this way the place selected for setting
up business is appropriate. Home delivery facility has also been provided to target market and this
can enhance sales volume easily.
Promotion
Effective promotional strategies have been designed by Ching's world as business is newly
established and through marketing more customers can know about its range of services. Business
will promote its services with the help of advertisement through television, newspaper etc. Through
this customers can easily gain crucial information regarding services of company and they can try
Indo-Chinese food items. Apart from this brochures will be distributed to customers for sharing
crucial information with them.
11 Sales channel
Sales channel supports in knowing the effective ways adopted by enterprise so as to sell its
products in the market. Further, for Ching's world the sales channel of business is physical outlet
through which company will deliver entire range of its services. Moreover, firm has set sales target
and this channel will provide support to business in accomplishing this objective. Apart from this
this sales channel is quite effective as through this business can easily strength relationship with its
target market. Direct interaction between customers and employees of firm is possible when
services are delivered with the help of physical outlets and this supports in enhancing organizational
performance.
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12 Management team
The management team comprises of one founder who has developed this business idea and
they have taken initiative so as to implement this idea for grabbing opportunities present in the
market. Further, major responsibility of founders of company is to take decision for the welfare of
enterprise along with development of various policies on the basis of which operations are carried
out. Apart from this, founders of the business are having 4 years’ experience and they are capable
enough to run any type of restaurant. They have proper knowledge regarding Indo-Chinese food
and have decided the main food items on the basis of demand in the market of UK. Moreover, 2
chefs and 4 staff members have been hired who have high experience in preparing Indo-Chinese
dishes. Proper training will be provided to all the employees so that they can prepare food items as
per taste and requirement of the target and in turn it is profitable for new business. In short the
management team developed is highly efficient and can focus on the actual needs of the customers
and in turn high quality services can be delivered to target market.
Ching’s world will hire skilled workforce who have proper knowledge and skills in the field
of restaurant. Further, knowledge in relation with the Chinese Italian food will support business in
serving customers in better manner and they demand can be met by business efficiently. Apart from
this, employees will be delivered proper training so that they can understand the need of customers
and through this it is possible to grab market opportunities. On the other hand, range of skills is
present in staff members which involve communication, decision making etc which will provide
base in serving customers. Apart from this, the expertise in the field of restaurant will support new
business and the overall demand of customers can be met in efficient manner.
13 Operations
All the crucial operations of the business will be carried out as per plan prepared and
advanced technology will be employed for serving customers. Further, advanced tools have been
purchased for preparing Indo-Chinese food item and this supports in saving time and overall cost
associated with the production. Advanced software has been installed for storing data of customers
and it will be beneficial for company in near future as it can be used with the motive to target
customers. On the other hand, payment from customers is accepted through cash and all other type
of cards. Therefore, it can support in enhancing sales volume and business can easily respond
towards the changing need and requirement of target market. Apart from this, business inventory
application has been implemented within the company with the help of which it is possible to order
raw materials required for preparing Indo-Chinese food on time. Further, with the help of this it is
possible to deliver effective services on time as per demand of customers.
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14 Financial projection
Tables shown in the Appendix highlights financial projection for Ching's world. Income
statement of company has been prepared for three years. Further, expected profit in the first year is
£27,700, for second year it is £50,980 and £10,11,76 for the third year. So, this represents that due
to higher profits business is able to recover the major expenses. Apart from this there are some other
assumptions which involves increase in sales unit by 10% every year, 5% rise in salary of staff
members every year, 5% rise in utility every year and 2% increase in miscellaneous expenses
yearly. These are some of the main assumptions associated with the present business. Every year
number of units have been increased which will be sold by Ching's world. In the year 2015 it is
expected that business will sell 1500 units of veg and 2000 units of non-veg items at a price of £5
and £6. Further, in the year 2016 1650 units of veg and 220 units of non-veg will be sold at a price
£5.5 and £6.5. In the year 2017 1980 units of veg and 2640 units of non-veg will be offered at a
price of £6 and £7. So, these are some of the assumptions taken in order to know feasibility of
business.
15 Funding request
For conducting business operations in appropriate manner finance has been taken from
various sources where £300,000 is owner's capital and £200,000 has been taken from bank.
Investment of £500,000 is required for setting up this business. Overall return from this investment
is expected to be high and it is fruitful for investors also. Apart from this, the rise in profitability
level of the business can assist in recovering the amount of investment and after this it is possible
for management to take expansion decisions. The amount of investment decided is appropriate as
sometime due to high investment business has to face many issues and it becomes difficult to
recover the overall amount.
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REFERENCES
Books
Brotherton, B., 2012. International Hospitality Industry. Routledge.
Journals
Jones, P. Hillier, D. and Comfort, D., 2007. Changing times and changing places for market halls
and covered markets. International Journal of Retail & Distribution Management.
35(3) .pp.200 – 209.
Maumbe, B., 2012. The rise of South Africa's quick service restaurant industry. Journal of
Agribusiness in Developing and Emerging Economies. 2(2) .pp.147 – 166.
Online
2014 Restaurant Industry forecast., 2013. [PDF]. [Accessed through
<https://www.restaurant.org/Downloads/PDFs/News-Research/research/2014Forecast-
ExecSummary.pdf>]. [Accessed on 30th Oct 2015].
Angelis, A., 2013. UK restaurant industry. [Online]. Accessed through
<https://uk.finance.yahoo.com/news/uk-restaurant-industry-000000282.html>. [Accessed on
30th Oct 2015].
Barclays., 2015. [Online]. Accessed through
<http://www.barclays.co.uk/Howtoapply/BarclayloanPersonalloans/P1242591272078>.
[Accessed on 27th Nov 2015].
Jefford, K., 2015. Turnover across UK restaurants reaches £21.6bn. [Online]. Accessed through <
http://www.cityam.com/215905/turnover-across-uk-restaurants-reaches-216bn>. [Accessed on
11th Jan 2016].
Michel, M., 2014. Value of restaurant market to reach £52 bn by 2017. [Online]. Accessed through
<http://www.bighospitality.co.uk/Trends-Reports/Value-of-restaurant-market-to-reach-52bn-
by-2017>. [Accessed on 30th Oct 2015].
Positive outlook for 2015., 2015. National restaurant association. [Online]. Accessed through
<http://www.restaurant.org/News-Research/News/Restaurant-Industry-Forecast-Positive-
outlook-for>. [Accessed on 30th Oct 2015].
VAT rates., 2014. [Online]. Accessed through <https://www.gov.uk/vat-rates>. [Accessed on 27th
Nov 2015].
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APPENDIX
Appendix-1
Utensils, cutlery and serving items which will be offered to customers in restaurant.
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Appendix-2
Unique items and Special Guest Service
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Appendix-3
Cash flow projections
Cash flow statement
Pre
operating
year 2015 2016 2017
Cash inflow
Op Balance 33000 35740 48742
Owner's capital 200000
Bank loan 150000
Sales revenue 234000 280500 352440
Total cash inflow 350000 267000 316240 401182
Cash outflow
Purchase of fixed assets 120000 0 0 0
Legal registration 2000 0 0 0
Infrastructure and designing 80000 0 0 0
Cost of inventory 50000 93600 112200 140976
Utilities and maintenance 18000 18900 19848
Salaries and wages 72000 75600 79380
Delivery and packaging 600 600 600
Marketing and promotion 5000 2400 2400 2400
Miscellaneous expenses 10000 6000 6120 6240
Rent 1100 1100 1100
Investment in furniture and
infrastructure 50000 6000 10000 20000
Interest 7350 5880 4410
Tax payment 6810 12098 17848.82
Loan repayment 30000 30000 30000
Total cash outflow 317000 243860 274898 322802.8
Closing balance 33000 23140 41342 78379.18
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Income Projections
Income statement for the year ended 2015
Figures in £
Income statement for the year ended 2016
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Income statement for the year ended 2017
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Financial projection
Cash flow statement of the new business has also been prepared which highlights the range of activities which is leading to inflow and outflow of
cash. Cash inflow activities of new business are owner's capital where owner has invested amount of 200000 and bank loan where firm has taken
loan of 150000 from financial institution in order to carry out key operations. These are the two main cash inflow activities of the new business
and the amount can be utilized for carrying out different operations of business in effective manner. Moreover, cash outflow activities of
enterprise involves purchase of fixed assets where organization has purchased assets of 120000 in the pre operating year, legal registration
charges of 2000 has been paid by business, infrastructure and designing charges of 80000 has been paid by business and cost of inventory is
50000. Further, in the pre operating year organization has incurred marketing and promotion expenses of 5000 along with miscellaneous
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expenses of 10000. Apart from this company is investing amount every year in furniture and infrastructure where in pre operating year it is
50000. So, these are some of the key activities of cash outflow and they are overall major expenses of the business. On the other hand, in the year
2015 sales revenue of enterprise is 234000 which is the real cash inflow for business. Further, cash outflow activities involve interest 7350 which
has been charged at the rate of 4.9% (Barclays., 2015) cost of inventory 93600, utility and maintenance expenses 18000, salaries and wages
72000 which includes renting allowances provided to staff members of 100 each, delivery expenses 600, marketing and promotion 2400,
miscellaneous expenses 500, investment in furniture and infrastructure 6000, rent of 1100. Further, company has paid tax in the year 2015 of
6810 at the rate of 20% (VAT rates., 2014). So, these are some of the major expenses of the enterprise in the year 2015 where inflow amount is
more than outflow and it is representing that company is earning profit by carrying out its operations.
Range of products offered by Ching's world
Products Price
Chili Chicken £ 5
Manchurian £7
Manchow soup £3
Spring rolls £4
Darsaan £4.5
American Chop suey £2.5
Date pancakes £3
Chicken majestic with peppers £6
Sesame chicken £8
Shrimp Chowmein £7.5
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Name of competitors Products offered Location Prices
Bombay work restaurant
and Bar
Tai pai paneer
Salt and Pepper tofu
spicy red pepper prawns
Kolkata chilly Lamb
Hakka chicken
Prawn on toast
Butterfly prawns
104-108 Hanworth
Road, London
£8
£6
£5
£7
£9
£3.5
£4.25
Maida Tandoori jhinga
Honey chili fish
Paneer tikka
Chana chaat
Loli pop chicken
Mix grill
148-150 Bethnal Green
Road, London E2 6
DG, United Kingdom
£10
£12.95
£9
£7
£13
£10
Sathiyams Hot and sour soup
Rasam
Manchow soup
Fried rice
Noodles
379-381 High St N,
London E12 6PG,
United Kingdom
£5
£6.25
£4
£8
£10
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Finger foods
Rice
Kothu dishes
£9
£7
£11
Bombay chow Sweet corn soup
Man chow soup
Crab meat soup
Chicken manchurian
sizzlers
Triple szechuan
220 King Street
Hammersmit W6 ORA
£3.5
£4.2
£4.8
£5
£7
£8.5
Company overview
The entire range of services will be offered to the people living in UK. Further, business will focus on serving entire market of UK and through
different services it is possible to satisfy their need in efficient manner. UK market size is very wide due to which it is necessary for business to
cover the entire market and through this it is possible to grab large number of opportunities which are present in the market. Further, in starting
offerings will be only done in the market of UK and in near future business will expand in other markets with the motive to enhance brand
awareness in the market. Rendering services to the people in UK market will be profitable for organization as purchasing power of people allows
them to buy different type of services and is beneficial for organization also.
Main unique attributes of the new restaurant will be high quality services, moderate price, delicious dishes etc. Further, these unique
features will assist business to survive in the market or longer period of time and can support in attracting customers. Apart from this, the staff
members hired by business are skilled which is also one of the unique feature of the new restaurant and through this it will become possible to
sustain in the market for longer period of time.
Industry analysis
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Market of UK is providing large number of opportunities to restaurants and they are expanding at faster pace. Due to change in taste and
preference of target market every restaurant has to alter its services so that it is possible for business to attract large number of customers in the
market. On the other hand, market trend is changing at faster pace where in past people does not prefer to eat food outside but in modern era
different type of food items are eaten by people and demand for every type of product is quite high. Due to high rate of growth employees
working in this sector are provided large number of benefits in the form of wages etc (Positive outlook for 2015). In short, employment
opportunities are effective in restaurant sector and this allows businesses to gain competitive advantage. So, this supports in highlighting the real
condition of restaurant sector in London where wide range of opportunities are provided to each and every business. No doubt competition is
high in the entire sector which sometime prevents businesses from accomplishing overall aims along with objectives.
Therefore, every business focuses on product differentiation as it provides base in gaining competitive advantage. Apart from this, large
number of challenges are present which businesses have to face at the time of operating in market and due to this reason effective strategies are
required to be developed so that capability of firm may not be adversely affected due to this. Most commonly every restaurant has adopted
strategy such as product differentiation through which it has become possible to serve large number of customers and in turn is acting as a
development tool. Rise in growth of entire sector is providing advantage to customers as they can know about culture of different areas and can
consume different type of food items.
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