Delicious Delight Restaurant Business Plan

This assignment focuses on developing a comprehensive business plan for a new restaurant called 'Delicious Delight'. A key element of the plan is a detailed analysis of the restaurant's funding strategy. The entrepreneur will leverage their own savings, explore options for securing a loan from Barclays bank, and investigate potential government incentives available to support new businesses. The assignment emphasizes the benefits of these various funding sources, highlighting how they contribute to maximizing profit margins and enabling the successful launch of 'Delicious Delight'.

Entrepreneurship New Venture
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Table of Contents
1. Executive summary .........................................................................................................................3
2. Nature of the business and competitive advantage...........................................................................3
Introduction about business ............................................................................................................3
Aims and objectives of the business ...............................................................................................4
Description of the products or services and competitive advantage ..............................................4
3. Market...............................................................................................................................................4
Market growth..................................................................................................................................4
Market demand for start up..............................................................................................................5
Market demand risk and opportunities............................................................................................5
4. Competitor analysis..........................................................................................................................6
5. Marketing plan..................................................................................................................................7
Marketing strategies ........................................................................................................................7
Segmentation, target and positioning ..............................................................................................8
6. Operational structure ......................................................................................................................9
7. Financials and forecasts...................................................................................................................9
Financial feasibility .........................................................................................................................9
Sources of finance .........................................................................................................................12
REFERENCES ..................................................................................................................................13
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1. EXECUTIVE SUMMARY
In the current scenario, service industries such as restaurant and hospitality firms are
flourishing at a higher rate. Now, customer spending in such sectors has increased. Hence, by
assessing the growth in these areas, business entity has taken decision in relation to the opening of
restaurant namely Delicious Delight. Thus, entrepreneur will offer dinning services to customers by
establishing the restaurant in Mosley Street of UK. Further, business entity will organize musical
shows and events in the restaurant. This in turn will entertain the visitors or customers to a large
extent. Hence, such uniqueness will attract a large number of customers of UK. Moreover, there are
several people who feel happy and fresh when they listen music while taking lunch or dinner. Along
with this, from the perspective of market growth, business entity will attain success by opening
restaurant in the market. In addition to this, to gain competitive advantage over others, late night
dinning services will be availed by the restaurant. Further, business plan in relation to start new
multi-cuisine restaurant is feasible from the financial perspective. Thus, entrepreneur will achieve
his aim by preparing the cost effectual strategies.
2. NATURE OF THE BUSINESS AND COMPETITIVE ADVANTAGE
Introduction about business
In this, entrepreneur has taken decision in relation to opening restaurant named as Delicious
Delight by taking into account the output of the research or investigation. Hence, in Delicious
Delight, business entity will offer huge variety of foods such as British, Mexican, Chinese,
Continental, Italian and Indian. Along with this, entrepreneur will also provide late night dinning
facility to the customers. Moreover, students and youngsters prefer to go on walk on late night and
prefer to eat snakes and other dishes (Saunders, 2011).
Further, from the investigation, it has been found that there are very small number of
restaurants which make arrangements regarding the musical shows or event for the entertainment of
customers. Hence, it is one of main uniqueness of Delicious Delight restaurant which will help
entrepreneur in build and sustain competitive edge over others, In this way, such unique concept
will help business entity in making the ambiance of the restaurant lucrative. Hence, for setting
suitable pricing policy framework business entity will make analysis of the strategies that are
employed by the competitors. Moreover, now customers make evaluation of the quality of the
services and prices which are charged by the competitors. Hence, by making thorough and in-depth
analysis of the competitors business entity will prepare his own framework.
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Aims and objectives of the business
The aim of Delicious Delight is to offer highly quality nutritional food or dinning services to
the customers. This in turn will enable entrepreneur to evolve high level of satisfaction among the
customers and thereby convert into loyalty aspect. In this way, by offering hygienic food to the
customers business entity can maximize both productivity and profitability to the large extent.
Further, entrepreneur has also undertaken the following objectives are:
 To offer amazing dinning services to the customers by organizing the musical events.
 To enhance the customer base and profitability by offering the variety of food.
 To provide customers with special ambiance which evolve high level of satisfaction among
them.
Hence, entrepreneur will direct his all efforts by keeping in mind the above mentioned
objectives. Moreover, business entity can develop suitable framework only when carry out some
objectives.
Description of the products or services and competitive advantage
The products and services offered by Delicious Delight consists huge variety through which
it can effectively create competitive edge in the marketplace. However, many restaurants and pub
are already operating in the selected areas. However, proposed business will operate with unique
products and services so as to increase attention of buyers. At this juncture, products of Delicious
Delight includes variety of dishes by focusing upon multi-cuisine such as British, Mexican,
Chinese, Continental, Italian and Indian. It shows that at a same time, number of buyers are targeted
towards the restaurant. Furthermore, additional services related to musical show will be also be
provided through which buyers will get higher level of satisfaction. However, selected location is
very good for local residents as well as tourists who feel the need of food late night also. Owing to
this, Delicious Delight will offer its wide range of products and services till 2.00 pm. However,
during morning it will be opened as soon as possible in order to provide breakfast and other related
products and services. All of these aspect tend to create competitive edge of the business in the
marketplace. Furthermore, variety of drinks will also be offered during the musical show whereby
pleasant environment is created for customers.
3. MARKET
Market growth
In the present era, growth aspect or level of restaurant sector is increasing at a high pace.
This aspect can be supported from the report which is presented by Allegra food services. In this
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report, firm mentioned that the growth of restaurant will get double in the upcoming year on the
basis of outcomes of survey conducted by the same (Growing at 3% per year, the UK Foodservice
market is an attractive place to be, 2016). Further, it has also been assessed that sales revenue of the
restaurant sector will be £52 billion at the end of accounting year 2017. Along with this, in the
report, Allegra also presented that frequency of customers is increasing with higher percentage who
prefer to take breakfast, lunch and dinner outside (Growth rate of restaurant in UK, 2016). Hence,
all the above aspects clearly present that restaurant sector is growing at a higher rate. In this, by
offering dinning services in an innovative manner, Delicious Delight can gain competitive edge
over others. Moreover, in the stiff competitive situation, business entity can build a distinct image in
the minds of customers by introducing something new or unique.
Market demand for start up
From the investigation of several articles and reports, it has been assessed that demand for
new restaurants is high in the market. Moreover, in the present time, disposable income of
personnel is increasing in comparison to the past years. Hence, now living standard of the people
has increased. Going restaurant for lunch and dinner has now becomes the part of lifestyle of people
(Shah, 2012). In addition to this, now, there is a trend among families to visit and take services of
restaurants on weekends. Further, on special occasions such as birthday, anniversaries and festivals,
etc., people prefer to go to the restaurants for making their moments memorable. Thus, by
considering all such aspects, it can be said that demand for the restaurants is very high in the
market.
Market demand risk and opportunities
There are several factors which closely influence the demand of customers in relation to
make use of services of restaurant. Moreover, now tastes and preferences of the customers are
changing frequently. Further, they also have desire to make use of services of different restaurants.
In this way, lack of customer loyalty is one of the main factors which closely influence productivity
and profitability of restaurant. Along with this, spending power of customers is highly influenced by
economic condition which is prevailed in the market (Teece, 2010). Moreover, in the period of
inflation, customers have more disposable income to spend on luxurious aspects.
On contrary to it, in the period of deflation, individuals do not have more money for
spending on the services which raise their living standard. In addition to this, high level of
competition takes place in the restaurant sector which imposes risk in front of the entrepreneur.
Moreover, in the competitive business arena, it is not easy for the business entity to survive. Along
with this, now customer preference also shifted from tastier to nutritional and healthy food (Bryman
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and Bell, 2015). Hence, customers want to go to the restaurant which offers healthy food to the
customers. Hence, all these aspects are the indicators of risk which highly affects the growth and
development of firm.
Hence, business entity has opportunity to prepare competent and strategic policy framework
by taking into consideration all the factors which may have negative impact on the growth of firm.
Thus, by keeping in mind such aspects, business entity can prepare a suitable menu card that will
include both hygienic and nutritional food. Besides this, entrepreneur can build loyalty among the
customers by introducing the card scheme. In this way, by following all such aspects, business
entity can take strategic measures that will help him in getting success over the rival firms.
4. COMPETITOR ANALYSIS
Competitors analysis is considered as the important aspect for assess the potential of current
business. It will be effective to identity that how proposed business will achieve its organizational
objectives and how it will attract large number of buyers. The present business in located in Mosley
street of UK where number of leasing restaurant are already operating such as The Bank,
Manchester and Gio Ristorante. Here, Gio Ristorante offers different Italian dishes where
Manchester deals in vegetarian bistro with outdoor seating. Apart from this, The bank is century
landmark pub with dining which provide good quality of services. It reflects that available
restaurant are operating with wide range of products and services through which their expectations
can be met effectively. Further, it is clear that selected location is very attractive very huge public
usually come for the purpose of dine. For this purpose, present business will offer special services
to customers in order to attract them directly. For example, musical show will be organized in
restaurant which tends to present its uniqueness in the marketplace. This facility proves to be
effective to grab attention of buyers and they can easily switch from one to another brand.
However, product range of current business covers British, Mexican, Chinese, Continental,
Italian and Indian which will be effective to create competitive edge of the business in the
marketplace. For example, large number of tourist arrive in the selected location where it becomes
feasible for business to increase customer base. This is the main reason behind extending the range
of products. However, products will be updated on time to time in order to increase satisfaction
level of buyers. The major uniqueness of business is the its opening time which will be effective
compete with existing rivalries. It shows that corporation can increase overall rate of return and
accordingly expectations of different stakeholders will be met in an effectual manner (Collis and
Hussey, 2013). Apart from this, business entity can easily cope up with changing scenario by
focusing research and development activities. Hence, late night services tends to attract local
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customers and those are visiting the place. Moreover, multi-cuisine restaurant will also make it
possible to create leading position of the business in the marketplace so as to cater need of different
shareholders in an effectual manner. Therefore, competitive strategies are adopted by the business in
order to create value of money spent by customers. It facilitates to ensure successful operation of
business in the marketplace.
5. MARKETING PLAN
Marketing strategies
In order to attain success in the highly strategic and competitive business arena following
marketing will be undertaken by the entrepreneur are:
Elements of
marketing mix
Explantation
Product British, Mexican, Chinese, Continental, Italian and Indian food
Price Competitive and discounting pricing strategy will be employed by
Delicious Delight for influencing the dinning decision of customers.
Moreover, usually customers make comparison of price with the quality
aspect. In this competitive pricing strategy will provide assistance to the
business unit in fulfilling the objectives. Further, by offering discounts on
festive seasons demand of the customers can be raised by the
entrepreneur.
Place Delicious Delight will be opened by the business entity in the Mosley
street of Manchester. It is the posh area of UK where several hotels are
situated. Hence, by opening up restaurant in Manchester business entity
can enhance its profit margin through the means of serving both inbound
and outbound customers.
Promotion Business entity will place advertisement on social networking sites to
promote the exclusive dinning services offered by it. Along with this,
advertisement will also be placed by the entrepreneur on television and
newspaper. This in turn will develop awareness among the customers
about the establishment and services offered by Delicious Delight.
People With the aim to deliver high quality and satisfactorily services to the
customers 14 personnel will be appointed by Delicious Delight. Hence, by
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making selection of the talented personnel business entity would become
able to deliver high quality services to the customers.
Process For raising the satisfaction aspect of customers business entity will make
focus on maintaining the hygiene aspects while preparing and serving the
food.
Physical evidence In the field of restaurant, interior and exterior are the main aspects which
attracts and influences the decision making aspect of the customers.
Hence, entrepreneur will design the exterior of restaurant in kite shape.
This will be one of the main attractive point which influence the decision
making aspect of the customers. Further, music programs or events will be
organized by Delicious Delight to offer highly pleasant environment to the
customers. In addition to this, effectual seating, flower and other
arrangement will be done by the entrepreneur to give memorable
experience to the customers.
Segmentation, target and positioning
Segmentation Entrepreneur will segment the potential customers on the basis of their age,
income and living standard. Hence, business entity will make focus on
offering dinning facility to young and middle age group people. Moreover,
people of such age group prefer to take lunch or dinner outside rather than on
home. In addition to this, entrepreneur will decide menu and price in
accordance with the middle and high income group or people. Further,
effectual ambiance is also the main priority of the customers. In this, by
making arrangements of the musical shows sole proprietor can satisfy the high
living standard aspect the potential customers.
Targeting Differentiated targeting strategy will be employed by Delicious Delight which
in turn helps it in getting the desired level of outcome or success. On the basis
of this aspect business entity will prepare distinct menu for both vegetarian
and non-vegetarian customers. In this way, by framing the varied strategies
business entity can meet the demand of the customers to the large extent.
Positioning Business entity will build distinct image in the mind of customers regarding
Delicious Delight by shedding light on its exclusivity. Hence, entrepreneur
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will position the restaurant on the basis of hygiene maintained by it while
preparing and serving food. Moreover, now people want to visit the restaurant
which lay more emphasis on hygiene aspect. Further, business entity will also
highlight the musical shows or events in the advertisement. In this, by making
focus on such aspect entrepreneur can grab the attention of the customers to
the large extent.
6. OPERATIONAL STRUCTURE
In order to carry out operations and functions of Delicious Delight more effectually business
entity requires head chef, quality and management team a well as cleaning and serving staff. In this,
entrepreneur will hire the personnel which are highly competent and experienced. Moreover, in
food sector customer satisfaction and loyalty is highly influenced by the manner in which personnel
greet and offer services to them (Osterwalder and Pigneur, 2010). Hence, personnel must have skills
in relation to offering the food to the customers according to their needs and preferences.
The rationale behind this is in restaurants customers primarily interact with the personnel
and make their perception level about the services offered by it. Further, taste, nutrition and hygiene
are also the most effectual aspects which are undertaken by the customers while making selection of
the restaurant. In this regard, quality and cooking team must be highly experienced. Thus, by taking
into account all such aspect entrepreneur will place advertisement on social networking sites along
with the proper job description and specification. Further, advertisement about the vacant position
will also be placed by the business entity on newspaper. Through this, entrepreneur can approach to
the talented personnel and appoint them for Delicious Delight. This in turn enables business entity
to evolve high level of satisfaction among the customers by delivering the quality services.
7. FINANCIALS AND FORECASTS
Financial feasibility
In order to assess the extent to which project is financial viable feasibility study will be
conducted by the entrepreneur by taking into account the following assumptions:
Assumptions:
1. Sales of the restaurant will increase by 15% in each year.
2. Working days of the restaurant will be 365 and £75 will be charged from each customer. In
each day 20 customers will be served by the restaurant.
3. Working capital of the pre-operating year will be £80000.
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4. On registration and research £35000 and £25000 will be incurred by the entrepreneur.
5. Marketing and promotional expenses will be raised by 8% in each year.
6. Utilities, rent of the premises and salary of the personnel will be increased by 10% in eaach
year.
7. Loan will be repaid by the customer in three equal yearly instalments.
8. Miscellaneous expenses of the restaurant will be increased by 7% in each year.
Income statement
Particulars Year 1 (￡) Year 2 (￡) Year 3 (￡)
Revenue 547500 629625 724068.75
Less: COGS (30%) 164250 188887.5 217220.625
Gross Profit 383250 440737.5 506848.125
Operating Expenses
Legal and Registration
Charges 35000 0 0
Market Research 25000 0 0
Marketing and promotional 9500 10260 11080.8
Utilities (Electricity & Phone) 28000 30800 33880
Insurance 12000 12000 12000
Salary 33600 36960 40656
Miscellaneous Expenses 18000 19260 20608.2
Plant and equipment
maintenance 11000 11000 11000
Rent on premises 12000 13200 14520
Total Operating Expenses 184100 133480 143745
Operating Profit 199150 280976 361625
Less: Interest 25000 22000 18000
PBT 174150 258976 343625
Less: Tax (20%) 34830 51795.2 68725
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Net Profit 139320 207180.8 274900
Cash flow statement
Cash flow statement Pre-Operating Year Year 1 (￡) Year 2 (￡) Year 3 (￡)
CASH INFLOW
Opening Balance 0 210000
506903.3333
33333
862586.4666
66667
Sales 0 547500 629625 724068.75
Owner's fund 150000
Bank Loan 200000
Total Cash Inflow 350000 757500
1136528.333
33333
1586655.216
66667
CASH OUTFLOW
Working Capital 80000 0 0 0
Legal and Registration
Charges 35000 0 0 0
Market Research 25000 0 0 0
Marketing and
promotional 9500 10260 11080.8
Utilities (Electricity &
Phone) 0 28000 30800 33880
Plant and equipment
maintenance 0 11000 11000 11000
Interest on loan 25000 22000 18000
Rent on premises 0 12000 13200 14520
Salary 0 33600 36960 69325
Miscellaneous 0 18000 19260 20608.2
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Expenses
Insurance 0 12000 12000 12000
Tax 0 34830 51795.2 68725
Loan Repayment 0
66666.66666
66667
66666.66666
66667
66666.66666
66667
Total Cash Outflow 140000
250596.6666
66667
273941.8666
66667
325805.6666
66667
Closing Balance 210000
506903.3333
33333
862586.4666
66667 1260849.55
Analysis
According to the income statement it has been found that net profit of restaurant in first year
is 139320 which will be increased in nest year by 207180. However, in third year also profitability
has increased to 274900. It reflects that rate of return of new business is continuously increasing
which shows favourable outcome for entire business. It facilitates to cater need of different
stakeholders as business will be in profit for coming three years. On the other hand, cash flow
statement reflects the balance of 506903.33 which will be increased in new year to 862586.46. It is
indicating that current business will have higher rate of return because cost of production will be in
control. However, all other expenses related to payment of taxation and insurance are not so higher
which in turn support business to create goodwill in the marketplace with increased rate of return.
Therefore, present business proposal is viable and will be able to attract more buyers.
Break-even analysis
Average selling price 75
Less: Variable costs 22.5
Contribution 52.5
Fixed costs
Insurance 10000
10000
BEP ( In units) 190.48
BEP (In value) 14293.5
Sources of finance
To start the new venture both internal and external sources will be undertaken by the
entrepreneur. Moreover, by using both internal and external financial sources business entity can
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make proper balance in the financial structure. Hence, by taking into account such aspect sole
proprietor has decided to make use of personal saving for starting the venture of restaurant. For
starting the Multi-cuisine restaurant business entity requires £350000. In this regard, entrepreneur
will make use of his own personal saving such as £150000. It is the most effectual sources which
will reduce the periodical financial burden of the entrepreneur to the large extent. Moreover, when
entrepreneur makes use of his own saving then he does not require paying interest to others. This in
turn enhances the profit margin of firm.
In addition to this, sole proprietor will take loan of £200000 from Barclays bank. Hence, by
approaching bank on the basis of collateral security and presenting the outline of the plan business
entity can generate fund from bank. Besides this, in the present era, government also encourages
bank to provide financial assistance to the entrepreneur on concessional rates. Further, bank loan
also offers tax benefits to the entrepreneur and there enhances the profit margin of him. Besides
this, in bank loan, business entity has to repay the amount of financial assistance in fixed monthly
instalments (Vuong, 2014). In this way, by taking into consideration both the sources of finance
business entity can start Delicious Delight restaurant more effectually.
REFERENCES
Books and Journals
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Chesbrough, H., 2013. Open business models: How to thrive in the new innovation landscape.
Harvard Business Press.
Collis, J. and Hussey, R., 2013. Business research: A practical guide for undergraduate and
postgraduate students. Palgrave macmillan.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Saunders, M.N., 2011. Research methods for business students, 5/e. Pearson Education India.
Shah, A.B., 2012. The extended services marketing mix used by restaurant and banking industry.
International Journal of Retailing & Rural Business Perspectives. 1(2). p.163.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning. 43(2).
pp.172-194.
Vuong, Q.H., 2014. Operational scales, sources of finance, and firms’ performance: evidence from
Vietnamese longitudinal data.
Online
Growing at 3% per year, the UK Foodservice market is an attractive place to be. 2016. [Online].
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