This document presents the analysis that will help the Thai Cambodian restaurant to succeed. The document has analyzed the internal and external factors, legal structures, and establishment phase survival strategies for the business.
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Running Head: BUSINESS REPORT1 Thai Cambodian Restaurant Business Report By University Affiliation Date
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BUSINESS REPORT2 Executive Summary This document presents the analysis that will help the Thai Cambodian restaurant to succeed. The document has analyzed the following; First, the internal and external factors that will affect the business. Secondly, the legal structures that are possible for this business. It has also analyzed the strengths and drawbacks of each legal structures. Thirdly, the document has discussed the strategies that can be used to help the restaurant to survive the establishment phase of the business life cycle.
BUSINESS REPORT3 Contents Executive Summary...................................................................................................................................2 Introduction...............................................................................................................................................4 External and Internal Factors..................................................................................................................4 Legal Structures........................................................................................................................................5 Establishment Phase Survival Strategies.................................................................................................6 Conclusion..................................................................................................................................................6 References..................................................................................................................................................8
BUSINESS REPORT4 Introduction A Thai Cambodian restaurant is a restaurant that provides authentic Asian foods. Operating such kind of a business in the suburbs of greater Western Sydney is a good idea. However, just like any other business, there are various factors that will affect the business (Dragnić, 2014). Such factors need to be analyzed and managed so that the Cambodian restaurant can succeed. The following are some of the major issues that need to be considered. External and Internal Factors There are several internal factors which can affect the business, they include; nature of products and services, business model adopted, planning, resource management, stakeholders management, among others (Dragnić, 2014). The most powerful factor in all of the above factors is the nature of products and services. This relates to the quality of the products, the variety of products that the restaurant offers, and quality of services (Dragnić, 2014). In the hospitality industry customers are so cautious about the nature of products and services that they receive. For the restaurant to succeed it must provide authentic foods, drinks, and services that attract many customers. The various external factors that can affect a Thai Cambodian restaurant include; competition, legal factors, economic factors, social-cultural factors, and environmental factors (Chittithaworn, Islam, Keawchana, & Yusuf, 2011). Competition as a factor includes; competition form already existing restaurants such as Battambang Restaurant. This group of competitors already has a market share and a strong brand. They, therefore, pose the highest level of threat. Secondly, threats of new entrants. This cluster of competitors may disrupt the
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BUSINESS REPORT5 market in the future. Although new entrants will have a low market share at the beginning, they may later end up dominating the market. Therefore, there is need to come up with competitive strategy (Chittithaworn, Islam, Keawchana, & Yusuf, 2011). Legal Structures Legal structure refers to the form of business ownership. There are two legal structures that can be suitable for the Thai Cambodian restaurant. First, a partnership form of business. It has several advantages which include; partners are free from double taxation since in partnership profits are not taxed, it is the personal income of partners that is taxed. It is easy to register and easy to manage. Cost of establishment, losses, duties, and profits will be shared among partners (Australian Taxation Office, 2019). However, according to theDepartment of Industry, Innovation, and Science (2019), itsdrawbacks include; partners have unlimited liability thus their personal property can be used to settle the business debt. The business has no perpetual life since the departure of a partner can lead to the closure of the business. The second legal structure is a company. The benefits of this legal structure include; owners have limited liability thus their personal property cannot be used to repay business debt (Australian Taxation Office, 2019). A company has wider access to capital through long-term loans since commercial banks can convert the loan into shares if the company defaults. The drawback includes; it is complex to start since it involves a lot of documentation and legal procedures. This legal structure will lead to double taxation since profits are taxed as corporate tax then individual pay personal income tax from the portion that they get from the corporate (Australian Taxation Office, 2019).
BUSINESS REPORT6 Establishment Phase Survival Strategies The strategies that the Thai Cambodian restaurant can use to overcome the establishment phase of the business lifecycle include; cost management, massive marketing, product differentiation, cash flow management, among others. The two best strategies to use are cash flow management and massive marketing campaign. According toEbben, & Johnson (2011), cash flow management refers to managing how cash is getting into and out of the restaurant. It involves predicting demand, determining when to buy stock, determining the quantity to buy, deciding how much stock to hold in the restaurant, and debtors management. This will ensure that the restaurant has sufficient cash and inventory to operate effectively. According toBlackburn, Hart, & Wainwright (2013),marketing is among the most essential functions of business since it is the one that attracts the customer to the business. The Thai Cambodian restaurant will need to embark on a massive marketing campaign in order to easily penetrate the market. This campaign may involve techniques such as; multimedia advertisement which uses a combination of various media such as print and broadcast media to convey the message, attracting referrals by offering discounts to the customers who refer others to the restaurant, showcasing videos of the restaurant and its services in social media platforms such as YouTube, among other techniques. Conclusion From the above discussion, it is clear that the success of the Thai Cambodian hotel is highly dependent on how well the above-discussed factors are managed. Also, the choice of the legal structure for the restaurant will highly influence how it is managed, a span of control, and taxation policies that will apply. Lastly, for the Thai Cambodian restaurant to succeed, there is a
BUSINESS REPORT7 need to put into practice the establishment phase survival strategies as discussed in this document.
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BUSINESS REPORT8 References Australian Taxation Office. (2019). Choosing your business structure. Retrieved from https://www.ato.gov.au/business/starting-your-own-business/before-you-get-started/ choosing-your-business-structure/ Blackburn, R. A., Hart, M., & Wainwright, T. (2013). Small business performance: business, strategy, and owner-manager characteristics.Journal of small business and enterprise development,20(1), 8-27. Chittithaworn, C., Islam, M. A., Keawchana, T., & Yusuf, D. H. M. (2011). Factors affecting the business success of small & medium enterprises (SMEs) in Thailand.Asian Social Science,7(5), 180-190. Department of Industry, Innovation, and Science. (2019). Business structures and types. Retrieved fromhttps://www.business.gov.au/planning/business-structures-and-types Dragnić, D. (2014). Impact of internal and external factors on the performance of fast-growing small and medium businesses.Management: Journal of contemporary management issues,19(1), 119-159. Ebben, J. J., & Johnson, A. C. (2011). Cash conversion cycle management in small firms: Relationships with liquidity, invested capital, and firm performance.Journal of Small Business & Entrepreneurship,24(3), 381-396.