Entrepreneurship and Business Model | Assignment

P5014
Entrepreneurship
and Business Model

Contents
Executive Summary...............................................................................................................................3
Product development plan.....................................................................................................................4
General plan..........................................................................................................................................8
Project schedule...................................................................................................................................10
Financial plan......................................................................................................................................11
Conclusion...........................................................................................................................................13
References...........................................................................................................................................14
Appendix.............................................................................................................................................17

Executive Summary
Restaurant avail huge variety of food such as American, Asian, and European cuisine. The
concept of business is to avail food and beverages made up of 100 percent organic
ingredients delivered from local organic farm market. “BIO AMO” is named as the business
with the menu of organic items featuring home-grown pesticides herbs and vegetable to know
where these vegetables and meat are being sourced on menu. The operating time of business
is 18 hours a day. USP includes fresh and local organic food. After conducting the market
research, it is seen that customers have grown very mindful of health and they pay more
attention to nutritional value. Target market includes eating healthy people especially the
younger people. Organic customers include families with young children, health issues,
entrepreneurs, young people, government officials, and foreigners in China. Sustainability
can change overtime by increasing its sales revenue with 20 percent every year, growth rate
with 10 percent every year, and net income with 15 percent every year.
Competitive advantages of the products offered by the company includes healthy variety of
food, healthy meal in Xintiandi, “feel good” factor is among the related customers by the
consumption of healthy food. The earlier report defines the sustainable vision of the resource
efficient design. It will protect health of occupants, reducing waste, environmental
degradation, carbon footprint, and improve the employee`s productivity. This report is the
continuation of previous analysis, which brings out new product development plan of BIO
AMO Restaurant. Furthermore, there is a description of general plan for development, project
scheduling, and financial planning for upcoming one year. As a sustainable business, it is
important to consider the business idea of organic food, which is quite appropriate for the
people who follow healthy lifestyle. While offering this business proposal into the potential
investors when bringing to invest, it is important to invest in business by evaluating return on

investment, and profitability ratios. The mission of BIO AMO is to avail healthy, dining
experience, delicious, and environmentally suitable locations.
The vision of the company to avail restaurant best healthy and conscious in city as being
evolved by continuously growing. Meanwhile, location plays an important role in the success
of the organisation. Xintiandi is fashionable area, which is planned to rent a particular space
for the establishment of restaurant. Chinese millennial attitude is important with the increase
in spending power. Core group of the technological perceptive network connection and the
skilled customers account for one-third of Chinese people with entire working population in
US.
Product development plan
The operational plan elaborates the needs of business operations such as facilities, locations,
and equipment. Higher-level description of how services and products will be created will be
described. The business operations will include day-to-day operations, physical plant,
equipment, production, inventory, cost, feasibility, assets, and the special needs (Lawson,
2017).
(Source: Boisclair, Lusardi, & Michaud, 2017)

This flow chart is the presentation of series of the operations in the processing plant. For
instance- when one wants to prepare dried vegetables so that they can preserve. Profits are
severely low as it includes R&D, production, marketing, and introduction costs. The above
can help in identifying the procedure of operations in process that can assist in proper
selection of tools needed for the preparation of dried vegetables. Even when the direct farm
products are not available, plant layout is the way in arranging the machines in the plant for
efficient functioning of system with an aim to maximise profits. Below is the method of
developing new product through dehydrated onions and other vegetables. Plant layout is
arrangement of machines in plant for effective functional level. One will definitely consider
food-processing operations as the transformational procedure. Fruits, vegetables processed
plant, and raw materials, which are transformed in finished items. With the series of
operations, it is sequenced for number specified for input (Boisclair, Lusardi, & Michaud,
2017).
Cleaning and drying section between the storage and packaging section. It is unnecessarily
increasing materials handling cost and time by reducing overall performance. It can cause
collision between wastage of labour, and workers. Further, arrangement of varied facilities
and tool in the food processing plant acts as an important role in overall viability. This
physical arrangement of industrial amenities is well-known plant layout. When
accomplishing with stages of development, it starts with the production workflow starting

with identification the problem of health issues and upsurging demand of organic food. The
company has its menu complied with the local and national standards by elaborating the
enhancement of food in terms of quality. Further, it also includes supplier of some organic
food by controlling measures as being set to establish.
When preparing the dishes for sale, it is seen that it started from purchasing of raw material,
storing them, issuing the stock according to the demand of the customers, preparing the
dishes, presenting them in the restaurant, serving it to the customer, and consumed by the
customer.
(Source: Dash, 2016)
Purchasing-
The purchaser is obliged to purchase the product and item. The marketer analyses and opts
for wholesaler, suppliers, and contemporary market price. Furthermore, the needed

commodities will be withdrawn from the store at fair price. This will help to maintain
appropriate stock to get a fair price by appropriate purchasing process (Yilied, 2018).
Storing and issuing the product-
The store carry a task to store and receive the supply by issuing the respective departments. It
will include stock database, new material in stock, and manage old. The record will include
recording of previous stock up to the latest stock.
Cooking and preparing-
This includes the preparation of several food and beverages. As the cook make several food
variety and bar tenders hen preparing cold beverages especially cocktails and Mocktails. This
includes the arrangement of the food in a dish, decorating them in an effective way, and them
plating them. Organic raw material is used to decorate the glass, fruit slices, stirrers, and
sippers.
Preparing for the services Serving-
Guests enact this part. At last, respective staff often takes the inventory of being consumed
and balance the stock of beverages and stock by keeping the latest figures (Yilied, 2018).
Consuming- it is important for food and beverages services organisation and the F & B
department in big hotels to keep the standard of beverages high and improved.
Customer service “moment of Truth”
“Moment of Truth” is the point where the customers have the opportunity to positively and
negatively impressing the restaurant. This feature directly approach the service providers if
they find dissatisfaction. The company must focus on creating attractive locations and
interiors so that the company can get access the advertising on social media. Relying on
customer satisfaction determines until what extent the customer services are rendered. To

understand customer services, targeted segment has to understand complaints. Employee is
the good source of data when determining “moment of truth” (Abeku et al., 2016).
General plan
Several organisations included in the operations to bring back the idea into existence. At first,
several skills for the restaurant manager will signify commercial awareness, flexibility,
interpersonal skills, communication skills, organisational skills, teamwork skills, and issue-
resolving skills. The organisational chart includes three level of management power
delegating at top-level management, middle-level management, and lower level management.
The duties and responsibilities of the restaurant supervisor oversee front and back house in
restaurant operations, ensuring the customer satisfaction, by promoting excelled services,
responding to the customer complaints in a professional way. Maintaining the quality control
for food that is being served. There are nearly ten features to motivate the staff include setting
the goals, reward system, prepare the leaders, offering chances for advancement, and training
the employees. Restaurant manager is responsible to lead and manage restaurants. One has to
be responsible to different tasks especially marketing strategies, hiring the restaurant staff,
overseeing the quality, and development of menu to serve the restaurant guests (Tutorial
point, 2018).
At first, company has to understand traits making the people successful towards their roles. It
is important to find out right person for the right position so that they can ask the questions to
understand potential employees fitting the needs. When it comes to hire new people and find
new person, which can share organisation’s attitudes, standards, goals, and values, is
important. A good cultural fit is quite important as it motivates the staff to perform well and
serve well to the customers. The team strives to attract people by attracting guests, clients,
and employees. Culture includes value, attitude, ethic, and finding the candidates that can fit
culture as paramount importance. The staff which is quite necessary while running the

restaurant such as manager, chefs, cooks, serving staff, bartenders, dishwashers, maintaining
staff, and hosting staff members. Furthermore, restaurant jobs include host, bookkeeper,
accountant, restaurant manager, and executive chef (Abeku et al., 2016).
(Source: Sharon, & Dori, 2017)
The hierarchy level of restaurant includes owners in the top management Furthermore;
middle level management includes general manager, bookkeeper, assistance manager, and
kitchen manager. At last, staff such as servers, hosts, bussers, bar tenders, bar backs, line
cooks, dishwashers, and pantry. The head of management hierarchy includes restaurant
manager who undertakes different tasks such as promotion, marketing, recruiting,
supervising, training, settings, and regulatory budgets. Furthermore, they tend to increase
kitchen stock with the help of supplies, hygiene, and licensing (Boisclair, Lusardi, &
Michaud, 2017).

“BIO AMO” appoints a headwaiter, which is considered part of management hierarchy and
work under restaurant manager. The head looks into customer service positioning since they
greet the restaurant customers when directing right table. At times, this person also handle
restaurant calls where people make reservations. This person makes sure whether customers
are served fresh and well or not. The largest and most important staff of the restaurant is the
group of chefs who are at the management position relating to the kitchen itself. Several
operations within restaurant in regards to kitchen supplies and relating it with kitchen with
rest of the business. The second chef is directly under executive chefs where duties between
two people will be tending to overlap. Station headwaiter assist to supervise for rest of waiter
staff and waiters. This is in the charge of retrieving finished food from distributing to people
who has ordered it. Waiters can take the orders, revise it, and update it as needed. They are in
charge of making sure for the customers and feel them comfortable (Klingelhöfer, Erasmus,
& Mayo, 2015).
Project schedule
The company can protect its intellectual property through several ways such as it must
register its copyrights, patent, trademarks also by registering product, domain, and business
names. On-disclosure, licensing contracts, and creating confidentiality for the partners and
employees. The most important revised rule for the implementation of food safety as per the
statement of state council. It has been seen that fundamental concern is related to
establishment of food safety standards as being optimised for the scope of enterprise standard
to be clarified. The regulations clarify primary responsibilities of business operators and
producers in food safety especially regulate the transportation the food products, corporate
leaders, banned promotion of food items, by improving management of food (Hundley,
Hudson, Wasan, & Emerick, 2019).

The Chinese government has been diverting the focus on agricultural rules including food
packaging, chemical additives, business rules, and drug production. The principal crops are
soybean, cotton, corn, wheat, and rice and also other fruits and vegetables. Furthermore,
Chinese government attempt to consolidate food safety rules in creating of state food and
drug administration of China. Officials have been under increasing public with international
pressure to resolve food safety issues. Food safety is related to people`s lives, health,
economic accomplished with social harmony. It has been seen that China`s food rules and
regulations are complex where it`s monitoring system is unresponsive with government
department oversee and finally enforce governmental policies overlapping duties. Local
authorities control and enforce regulatory enforcement. With the increase in the demand of
the organic food, people have started avoiding fast food of restaurant. Although, in urban
cities, consumer income increased but they were short of raw farm, and organic food.
Therefore, they started visiting supermarkets and demanded packaged organic food, which
has further attracted media attention to the food issues. This shows that “BIO AMO” has
started with restaurant with organic food so that people can move out and enjoy their outings
with beautiful locations (Mckinsey, 2017).
Financial plan
“BIO AMO” is the organic restaurant covering the start-up and asset cost. This financial plan
will determine the amount, which is needed to be invested. The projection will decide and
estimate the balances of balance sheet, P &L account, and cash flows within the next one
year. On an important note, financial projection is the estimation of future expenses, cash
flow statement, and revenues. The projection is accounted of several market factors. One will
have to develop short term and long-term projections where it will be based on certain
assumptions. The company plans to introduce fresh organic food by owning a farmhouse for
vegetables and fruits. Furthermore, the farm can also own cattle for fresh food to avail high

level of vitamins, low concentration of the pesticides, lack of food additives, colouring, and
hydrogenated fat. It is estimated that production of cattle and vegetables on the regular basis.
As far as the sales are concerned, it is further estimated that sales revenue would increase by
15 percent in 2020. Rate of interest for loans and borrowing is estimated at 5 percent every
year. Tax rate is estimated at 30 percent for the upcoming five years. Depreciation is
estimated at 20 percent every year (Jogaratnam, 2017).
Ratio analysis 2020, 2021, and 2022
Liquidity ratio 2020 2021 2022
Current ratio 1.67 1.67 1.67
Profitability Ratios 2020 2021 2022
Operating Profit Margin 0.24 0.24 0.21
Return on Equity 0.15 0.14 0.13
Return on Total assets 0.09 0.08 0.07
Solvency Ratios
Capital structure ratio 2020 2021 2022
Debt- equity 0.41 0.39 0.40
Interest coverage ratio 0.12 0.13 0.14
Ratio analysis is the tool, which reflects the financial performance of the organisation. To
analyse the financial statements examination is based four categories such as liquidity ratio,
profitability ratio, and leverage ratio. Current ratio is calculated by current assets to the
current liabilities. It is used to determine whether the company is able to pay off its current
obligations with the help of current assets. BIO AMO has generated the current ratio of 1.67
times which means the company has 1.67 current asset to pay off its current liabilities.
Although, the company must maintain 2:1 current ratio. With an aim to improve the liquidity
positioning of the company, the organisation will have to improve its current assets by
increasing cash receivables and debtors.

Profitability ratios is the measure through which profitability of the company can be
evaluated to decide whether it is best suited for investors to invest or not. Operating profit
margin is nearly 38 percent, which means the company determines operational efficiency of
organisation of business enterprise. Return on equity ratio measures how a company create
each dollar to invest in the company. One can calculate the amount to be invested by the
shareholders by multiplying the quote of 100. Return on equity is calculated as 25 percent.
20-25 percent of the profitability ratio signifies good position of the company. Return on total
assets measures the effectiveness as produced income from the assets. One can calculate it by
dividing the net income to the total sales. Return on total assets is estimated at 14 percent
(Mckinsey, 2017).
Solvency ratio is estimated by dividing organisation’s after tax net income by its total debt.
The ideal ratio is estimated at 2:1 where debt is two times to one equity. Solvency ratio
measures the ability of the paying long-term debts. The debt-equity ratio of the company is
0.41 times to the equity fund. Interest coverage ratio is nearly 8 percent, which is quite weak
as the company is not sufficient to services for outstanding debt. As a recommendation, it is
seen that there is a need to improve the interest coverage ratio as lower interest coverage ratio
can lead to bankruptcy (Im, & Qu, 2017).
Conclusion
Form the above discussion, it is seen that “BIO AMO” has successfully completed with its
external analysis, and situational analysis, which helped them to find out target market
through segmentation in report-1. In the second report, the company has planned to introduce
product development plan, which is purely based on organic food. The company plans to
execute new product with the help of procedure. For instance- we have selected to make
dehydrated onions and other farm products so that off-season will not be barrier to sales and
availability. Furthermore, a new product always need approval in regards to legislations such

as food safety and standards as per the state food and drug administration of China. The
general plan portion decides the management team needed to accomplish the customer needs.
The report lays characteristics and features of each important role in the organisational
structure. The projected schedule brings out rules and regulations needed to get approval of
new product with operational process needed to produce new product. A Gantt chart is
prepared by revealing that which task is done by what time. Most importantly, it is a tool and
useful way by showing several activities as being displayed against time. Lastly, a projected
financial plan has been estimated with estimated P & L account, projected balance sheet. The
plan is being analysed through ratio analysis is that it can be seen that how far the financial
plan is accurate and practical.
References
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(2017). A Project Based Learning approach for Production Planning and Control:
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planning in Canada. Journal of Pension Economics & Finance, 16(3), 277-296.
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Ghosh, R. (2018). The tree structure—A general framework for food waste
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Appendix
Gantt chart
April, 2019 May, 2019 June, 2019 July, 2019 August, 2019 September, 2019 October, 2019 November, 2019 December, 2019
Planning closed
Development of busienss concept
Development of business concept
testing
Training Running
implementation Running
filing of legal compliance (registering) Completed
Gantt Chart
closed
Completed
Accomplished
“Projected Financial statement of “BIO AMO”

Resource required Amount ($)
Start-up expense 68,800.00
Stores and Supplies 13,000.00
Machinery 4,00,000.00
Equipments 3,00,000.00
Labor (30 workers*$3,000) 90,000.00
Office Staff (10 officials*$10,000) 1,00,000.00
Working capital 1,00,000.00
Start-up assets 50,000.00
Total 1,18,800.00
D2D- Lugguage delivery: Services Forecast
Serivces Units Average price Total
online services 1000 500.00 5,00,000.00
Offline services 300 100.00 30,000.00
Total 5,30,000.00
Amount ($) Amount ($) Amount ($)
2020 2021 2022
Sales 5,30,000.00 $5,83,000 $6,99,600
Miscellaneous income $53,000 $58,300 $69,960
A. Total $5,83,000 $6,41,300 $7,69,560
B. Cost of Sales $3,18,000 $3,20,650 $3,84,780
C. Gross Profit (A-B) $2,65,000 $3,20,650 $3,84,780
D. Operating Expenses
Salary to chef $12,000 $12,600 $13,230
office Rent $11,000 $11,550 $12,128
Vehicles on Lease (45*400) $18,000 $18,900 $19,845
Utilities $2,000 $2,100 $2,205
Insurance of assets $5,000 $5,500 $5,775
Depreciation $70,000 $73,500 $77,175
Marketing $10,000 $10,500 $11,025
Maintenance & Repairs $5,000 $5,250 $5,513
Payroll $2,500 $1,39,900 $1,46,895
Total $1,35,500 $1,80,750 $2,37,885
Operating profit $1,29,500 $1,39,900 $1,46,895
Less: Interest $15,000 $17,500 $20,000
Profit before tax $1,14,500 $1,22,400 $1,26,895
Less: Tax @ 30% $34,350 $36,720 $38,069
Net Profit AT $80,150 $85,680 $88,827
BIO`s AMO
Balance Sheet
Amount ($) Amount ($) Amount ($)
Assets 2020 2021 2022
Current $5,00,000 $6,00,000 $7,20,000
Fixed $7,00,000 $9,00,000 $10,00,000
Other assets $1,40,000 $1,00,000 $1,00,000
Total Assets $13,40,000 $16,00,000 $18,20,000
Liabilities
Current $3,00,000 $3,60,000 $4,32,000
Non-Current (Borrowings) $3,00,000 $3,50,000 $4,00,000
Total Liabilities $6,00,000 $7,10,000 $8,32,000
Equity $7,40,000 $8,90,000 $9,88,000
Total Liabilities & Equity $13,40,000 $16,00,000 $18,20,000
Start-up Requirements
Profit & Loss Statement
BIO`s AMO

Total sales 530000
Particulars A B C
Avg price 100 120 90
V cost 60% slaes 60 72 54
Contri per unit 40 48 36
Ratio of sales 0.2 0.5 0.3
125
4240 BEP units
BEP sales (amount) 848 2120 1272
Breakeven analysis
Cash Flows from Operating activities: 2020 2021 2022
Net Income 1,29,500 1,42,450 1,56,695
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation 70,000 73,500 77,175
Increases/Decreases in working cpaital 2,00,000 2,40,000 2,88,000
Net Cash Flows from Operating activities 3,99,500 4,55,950 5,21,870
Purchases of Assets 7,00,000 2,00,000 1,00,000
Net Cash Flows from Investing Activities 7,00,000 2,00,000 1,00,000
Proceeds from Selling Equity Shares 2,800- 2,811- 2,817-
Payment of Debt Principal - 7,24,266- 19,20,784-
Net Cash Flows from Financing Activities 2,800- 7,27,077- 19,23,601-
Cash Increase / Decrease 10,96,700 71,127- 13,01,731-
Cash flows at the beginning of the year - 10,96,700 10,25,573
Cash at the end of the year 10,96,700 10,25,573 2,76,158-
Statement of Cash Flows
Cash Flows from Investing Activities
Cash Flows from Financing Activities
BIO AMO food and Service