Business Plan for London Food Palace Restaurant

This assignment report is based on the business plan for London Food Palace restaurant, which aims to launch in the London market by offering multicultural cuisine and attracting visitors from different nations.

Enterprise & Business
Development
1

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The business details....................................................................................................................3
Macro- environmental overview.................................................................................................3
Market & industry analysis.........................................................................................................4
Competitor analysis.....................................................................................................................5
Marketing & Pricing strategies...................................................................................................6
Operations plan...........................................................................................................................6
Swot analysis...............................................................................................................................7
Financial requirements................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
2

INTRODUCTION
Newly start-up business can achieve growth and success in competitive market if the
business owner come up with new and innovative ideas that can fulfil the market needs and
requirements (Barrow, Barrow and Brown, 2018). For this, business plan is most important to
produce in order to identify own strengths and capabilities as a business and competitors’
strategies. The present assignment report is based on “London food palace” restaurant that is
going to launch in London market after conducting an appropriate research through using
secondary sources. It offers food products of different nations so as to attract visitors coming
from different nations to visit various destinations situated in London. For successfully entrance
into London market, business plan is produced under this report containing all aspects that can
affect or drive newly business in new market.
MAIN BODY
The business details
London food palace is a budding restaurant which will be opening at Oxford Street,
London. As London is being regarded as one of the best tourism and diverse cities across globe,
with best places to spot, food is one such which is spotlight of London. London food palace will
be providing exquisite and dizzling culinary experience with best craft and class of ingredient.
The top picks of London food palace menu include after compassing all continents across globe
which aims to offer multicultural cuisine which includes English breakfast, hotpots (Chinese
speciality), to Tadka masala last not least with vibrancy of drinks and deserts. All culture
specialities will be provided under one roof (Fichter and Tiemann, 2020).
Macro- environmental overview
London food palace restaurant is going to provide quality products and services to their
customers by analysing their requirements towards range of food products. In order to serve in
UK, it is required for firm to conducts PEST analysis to analysis impact of macro environmental
factors over the business as:
Political Factors:-
London food palace is newly start-up business that are launching in London market due
to having more demand of food products. Every country has its own political structure and
regulations to which the organization needs to adapt to. In order to carry out smooth functioning
3

of its operations, the company needs to keep an eye on the political environment as well as the
political stability of the country it operates in.
Economic Factors:-
The organisation needs to focus on the economic stability of a country it invests and
operates in. London food palace needs to be aware about the economic reforms as these reforms
will have major impact on the revenue and profit generation of the company. In order to grow,
develop and expand the business for a long run, it is very essential for an organisation to identify
the economic changes in the market and respond to them effectively and efficiently (HAN and
Kang, 2020).
Social Factors: -
The buying behaviour of consumers largely depend on their social class and preference.
Every consumer comes from a different social status and cultural background and it effects their
choices of products and services. In order to satisfy the customers, London food palace gives
emphasis to the taste, choices and preferences of consumers.
Technological Factors: -
In today's world, the market is changing every minute. In order to stay relevant, the
company needs to keep up with the changing trends in the technology and should be updated
with the advanced technology available in the market so that the company can carry out effective
utilisation of the resources. Advanced technology also helps to reduce the time duration and
errors of the employees while performing a given task.
Market & industry analysis
The Porter five force analysis is a strategic tool which helps in the industry analysis and helps
in gaining insight on the drivers on the profitability of the specific industry. These five force
analysis helps in understanding the industry and derive strategy which helps in achieving the
long term success and profitability. The analysis of the five forces for London food palace
restaurant for the restaurant industry Is as follows:
 Threats of new entrants
In restaurant industry there is always an increased chance of entering new players and as
London is a tourist place it has more attraction of food gigs to open (Hervert-Escobar and
Alexandrov, 2018). The London food palace will be acting upon it by implementing the
moderate rates in comparison to its existing competitor, by serving multi-speciality food from
4

every cuisine to be in competition and to take care of tourist and localities. The quality will never
be undermined and continuous innovations will be done to provide every time different taste.
 Bargaining power of Suppliers
The suppliers can decrease the restaurants profitability by not decreasing the raw material
prices at this point where there are many competitors existing the suppliers provide raw material
to large. To stay benefited the London food palace will focus on developing good network with
suppliers and will never compromise on quality.
 Bargaining Power of buyers
The buyers are the main factor which affect this industry at large as the cost of switching
is high and substitutes are also present at large which affect this industry profitability. The
London food palace to avoid this at large will try to create a pool of satisfied consumers by
catering to them with the innovation and quality rich taste. To stay ahead timely offers and
discounts will be provided to consumers to keep them feel enlightened (McKenzie and Sansone,
2019).
 Threat of Substitutes
In this industry when same product is being delivered in different way to met consumer
need industry is affected. The London food palace will always try to be give consumers with
product and service satisfaction and innovation also. The quality of taste will always be being the
focus of London food palace. The restaurant ambience and experience will always be taken care
of to serve consumers.
 Rivalry among the existing competitors
This factors refers to the intense competition present in this industry where the number of
restaurants exist and creates intense competition. The competition for London food palace will
be tough to maintain its position and have a loyal consumers visit. The London food palace will
focus on providing speciality of each cuisine worth remembering for consumers. The London
food palace will be organising events and concerts for the consumers to attract (Souza and et.
Al., 2020).
Competitor analysis
Clove club is one of the famous and leading restaurants located at town hall, London. One
of the most happening places in London where there is proper place located for fun, shopping
and enjoying. The location where it is situated act as the point of large consumer visiting. The
5

clove is beautifully constructed which serves in an impeccable crockery and gives a beautiful
time to spend in there. The menu is designed in an elegance way to serve the best of Britain food.
Klin is one of the famous restaurant which serve specially the northern Thai food with the
special herbs and art of Thai food. It is one of famous restaurants which leaves its customers feel
delighted and amazed with its taste.
The London food palace restaurant is located at one of the famous streets of London where
visitor can be easily attracted to dine in as the Oxford street is one of busiest place and many
tourists visit it for shopping and fun. The London food palace provides all cuisines under one
roof which is differential from its competitors in nature of taste and quality. The collaboration
with the singers and organising the events and concerts also attracts the consumers. The service
quality provided is also developed world class to make consumer feel delighted (Tipu, 2019).
Marketing & Pricing strategies
London food palace can achieve success in new market when they can easily attain large
number of customers and it can be possible only if business owner can promote its business
through using various marketing strategies which includes adoption of social media platform,
hoardings on road etc. These platforms create awareness among public about launching of new
business thus can easily bring interest among them to visit at their restaurant atleast at once.
Alongside, the interest and buying behaviour of customers can be influenced by adopting
suitable pricing policy as customers prefers price of products first and compare it with prices of
similar products offered by other business. In the context of London food palace, business owner
can use price skimming strategy in which they can charge lower prices in beginning and later on
increases when demand of their product increases. Once, customers visited at restaurant then it
maximises the chances of visiting again in future if served and treated well by staff as it all
depends on employees afterwards that how they can gain loyalty of new customers (Watson and
McGowan, 2019).
Operations plan
Operational plan for the restaurant must be on the basis of the choices of the customers so
that the organisation can fulfil their demand by replenishing dishes. The motive of London food
palace restaurant is to offer a space to its customers where they can come and go anytime and eat
quickly. Hence, the organisation's operational plan is compromised of such kind of the services.
From the variety of dishes available on the menu, the customers can order from it and the staff
6

members will transform it into the reality. Further the restaurant has its own conventional ovens
which gives the pizza authentic taste of the Italy. This restaurant can be found by the people near
Regent's Park, London. The company has expanded its operations online where the customers
can order various food items of different nations and the delivery boy himself will come and
provide you. The location of the restaurant is also connected with the subways which means that
the consumers can visit the outlet and order their favourite dishes (Watson, McGowan and
Cunningham, 2018).
Swot analysis
It is essential for London food palace to analyse its own capabilities and weaknesses
through conducting SWOT Analysis. It provides an opportunity to the business owners to make
corrective decisions for removing weaknesses and grabbing opportunities in order to get long
term sustainability for its business.
Strengths Weaknesses
 London food palace restaurant offers
quality services to its targeted
customers at prime location in London.
 London food palace charges price
skimming strategy which allows its
targeted customers to pay less as
compared with price of other restaurant.
 It offers multicultural cuisine including
English breakfast, hotpots (Chinese
speciality), to Tadka masala last not
least with vibrancy of drinks and
deserts under one roof.
 Due to lack of experience and market
image, London food palace finds
difficulty in gaining customer base.
 Due to number of rivals in same sector,
sustainability might be difficult for
London food palace.
Opportunities Threats
 Offering discounts may be helpful for
London food palace in getting attention
of customers within shorter time
period.
 Number of competitors are exist in
London Market which brings
challenges towards London food palace
in their sustainability.
7

 Large number of visitors are visited in
London due to having various
destinations thus profitable for London
food palace if adopting effective
marketing techniques.
 Fluctuations in political environment
may affect the entire activities of
restaurant.
Financial requirements
London food palace restaurant is offering food products of different nations and its
statement of financial requirements has been described below:
Start-up cost of business- it is basically that cost which involves the initial fuel for starting up a
business and its operations. In the given business, starting cost is broken up in following
segments:
 Equipment’s = £ 2000.
 Furniture = £ 1500.
 Premises (will be acquired on rent) =
 Security deposit = £ 100.
 Advance rent for 1 month = £ 100.
 Estimated cost of sales = £10 per unit.
 Selling price per unit = £50.
 Fixed cost = £ 1500.
 Variable cost = £3 per unit.
It has been forecasted after analysing market trends and others factors that might impacts the
sales figure of London food palace is that the restaurant can successfully generate a sales
equivalent to 200 units in a month. On the basis of this forecasting, following is a cost statement:
Particulars Calculation Amount
Sales £50*200 £10000
Less: variable cost £3*200 £600
Contribution Sales-variable cost £9400
8

Less: fixed cost £1500
Less: estimated cost of sales £10*200 £2000
Net profit £5900
From the above table, following is profitability and break-even analysis,
Break even analysis- It is basically that volume of sales, at which the company has no profit and
no loss. It is a neutral situation. To earn profits, company has to surpass this point of sales. In
given case, breakeven point is:
Breakeven point = Fixed cost/ (selling point – variable cost)
= 1500/(50-3) = 31.91 units or 32 units (approx.)
Profitability analysis= from the above calculation, it can be stated that, company is earning
profit on 168 units (200-32). Therefore, profit is earned on these units only.
Net profit margin for the company = net profit / sales*100
= (5900/10000)*100 = 59%
Cash flow statement- Cash flow refers to the net amount of the cash equivalents and the cash
which is transferred inside or outside the business operations.
(Amount in £)
Particulars January February March April May June
Sales 3500 4600 4700 5200 6200 6500
Other income 1500 2500 2600 2650 2000 2200
Total inflows 5000 7100 7300 7850 8200 8700
Cash Outflows
Variable cost:
Materials 450 500 530 650 740 830
labour 490 540 580 750 820 940
Other variable cost 200 250 260 340 420 520
Fixed cost:
Rent 1000 1000 1000 1000 1000 1000
Salaries 800 800 800 800 800 800
Other fixed cost 200 250 250 360 320 320
Net cash flow 1860 3760 3880 3950 4100 4290
9

Particulars July August September October November December Total
Sales 8900 14000 18500 20000 21500 24500 138100
Other income 2250 2050 1300 2600 2750 2850 27250
Total inflows 11150 16050 19800 22600 24250 27350 165350
Cash Outflows
CONCLUSION
It has been concluded from the above report that business owner must have mission and
vision for its newly business as it brings motivation among them to work hard, and adopt suitable
strategies that can be easily accepted by the customers. For this, preparation of business plan is
an essential as it provides pathway for members involved in operations of newly business and
helps them in understanding their respective roles and responsibilities. PESTLE and Porter five
forces are considered as an appropriate tool to conduct in order to analyse the macro-
environment factors as well as fluctuations in market industry. It makes easy for business owners
to implement corrective actions to tackle all the threats exist into market as well as grab
competitive opportunities.
10

REFERENCES
Books and journals
Barrow, C., Barrow, P. and Brown, R., 2018. The Business Plan Workbook: A Step-By-Step
Guide to Creating and Developing a Successful Business. Kogan Page Publishers.
Fichter, K. and Tiemann, I., 2020. Impacts of promoting sustainable entrepreneurship in generic
business plan competitions. Journal of Cleaner Production, p.122076.
HAN, S. and Kang, E., 2020. The Marketing Strategy to Stimulate Customer's Interest in Art-
Gallery Business Plan. The Journal of Distribution Science, 18(8), pp.47-54.
Hervert-Escobar, L. and Alexandrov, V., 2018. Territorial design optimization for business sales
plan. Journal of Computational and Applied Mathematics, 340, pp.501-507.
McKenzie, D. and Sansone, D., 2019. Predicting entrepreneurial success is hard: Evidence from
a business plan competition in Nigeria. Journal of Development Economics, 141,
p.102369.
Souza, A. and et. Al., 2020. Business Plan Analysis Using Multi-Index Methodology:
Expectations of Return and Perceived Risks. SAGE Open, 10(1), p.2158244019900171.
Tipu, S.A.A., 2019. Business plan competitions in developed and emerging economies. Journal
of Entrepreneurship in Emerging Economies.
Watson, K. and McGowan, P., 2019. Emergent perspectives toward the business plan among
nascent entrepreneur start-up competition participants. Journal of Small Business and
Enterprise Development.
Watson, K., McGowan, P. and Cunningham, J.A., 2018. An exploration of the Business Plan
Competition as a methodology for effective nascent entrepreneurial
learning. International Journal of Entrepreneurial Behavior & Research.
11