Zara Fast Food Restaurant: A Business Plan for a New Venture

This report presents a comprehensive business plan for Zara, a fast food restaurant concept targeting the UK market. It outlines the new venture concept, focusing on quick-made, affordable food to attract young and business-class customers. The plan details market analysis, including target demographics and competitive advantages. It covers essential startup requirements such as structural design, financial planning, manpower, equipment, market information, location selection, and legal considerations. The report proposes a business model emphasizing competitive pricing and cost control to achieve positive financial results, while also addressing risk management strategies to mitigate potential challenges. It also highlights the necessary conditions to avoid business failure, emphasizing leadership, risk-taking, and problem-solving skills for the entrepreneur. The plan aims to establish a successful fast-food outlet and expand through franchising, supported by detailed financial projections.

MANAGERIAL SKILLS AND
ENTREPRENEURSHIP

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1: NEW VENTURE CONCEPT..........................................................................................1
TASK 2: REQUIREMENTS FOR NEW BUSINESS START UP................................................3
TASK 3: PROPOSED BUSINESS MODEL THAT HOW NEW VENTURE WILL WORK TO
ACHIEVE POSITIVE FINANCIAL RESULTS AND BY WHEN...............................................6
TASK 4: PROPOSING TO MANAGE BUSINESS RISKS.........................................................11
TASK 5: CONDITIONS WHICH MUST PREVAIL TO AVOID FAILURE.............................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
New venture concept involves different activities in creating a business that needs to be
competitive in the UK market. Thus, through such way, many individuals come up with the
unique business idea and develop it by generating a product or service. However, there are varied
risks assessed while starting a new venture such as financial requirement, skilled human
resources and updated technology etc. In the present business plan, the new venture concept that
has been focused is starting Fast Food Restaurant business plan (Hiduke and Ryan, 2013). A new
venture named Zara is a fast food restaurant in UK which helps in attracting both young and
business class people to enjoy their meals. . The venture will provide them quick made food at
affordable prices which they can enjoy with their friends and family. Further, it involves
different conditions that need to be overcome so that failure of business can be avoided.
It can be assessed that starting a business is a multi-step process therefore; entrepreneur
needs to focus upon the business idea and he is required to undertake varied licenses and
permission in order to carry out the business in a particular country. Also, they need to assess
varied management skills which are required to start a new venture (Barringer, 2012). Moreover,
certain experience is required to be obtained by the entrepreneur so that they can assess the
actual requirement of firm in order to attain profitability condition in the future. Also, they
should be able to forecast the financial requirement and related risk in the near future and to
execute the operations effectively.
TASK 1: NEW VENTURE CONCEPT
The new venture concept is Zara Fast Food Restaurant business which will locally own
the fast food outlet in UK market which focuses on attracting young and business people who are
busy in their daily lives. Therefore, restaurant will provide them quick made food at cheap prices
which they can enjoy with their friends and relatives. Further, in the coming future, business will
also plan to position it as an international franchise through our creative approach in order to
develop company's image (Butler, 2015). Zara will provide a unique combination of excellent
food at value pricing with fun packaging and lively atmosphere. The entrepreneur is planning to
launch the new business idea because of increasing demand for quick made food which is easily
consumed while carrying out window shopping or while walking around inside a shopping mall.
Another aim of business is to start the outlet in crowded area like mall where they can
easily catch the attention of clients and attract them to visit the restaurant. Later, while planning
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for expansion, Zara can launch its several retail outlets through franchise in different countries
and attain profitability. However, through preparing this business plan, it helps in deciding the
location for initial startup of venture. Thus, for this, the marketing team of restaurant is required
to carry out proper market research and to analyze the place where potential target customers
reside. Then, they can decide to launch the outlet at such place. In addition to this, entrepreneur
needs to determine different sources from where they will obtain funds such as individual
investor or financial institution (Jones and Penaluna, 2013). It assists them to start up a new
venture concept and launches it in market to grab the attention of target customers. Further,
additional financing planning will also be required in order to secure the funds for further
expansion in different countries and to open the subsequent outlets. However, the initial capital
investment will allow Zara to provide its clients with a value driven, the best entertaining
experience and luxury feeling.
Business possesses varied opportunities in future in order to expand its operations in
different countries to attain results. However, it is essential for the entrepreneur to attain
competitive edge of quick made food at value pricing so that they can attain the advantages in
such a competitive era. There are various other restaurant outlets which provide similar food
therefore, in order to gain attention, they need to build effective competitive advantage and to
attract potential clients (McKeever, 2012). Also, there is high demand among young customers
of such a quick made food. Therefore, it attracts them to visit the place and spend time with their
family and friends. However, the business plan helps to start up first restaurant outlet and to
build the concrete goals.
The new venture concept of Zara Fast Food Restaurant needs to collect adequate amount
of finance from different sources such as investors and financial institutions which helps them to
start the business. Financial projections will be estimated through preparing detailed financial
accounts and by obtaining the break even analysis to attain maximum profits. Thus, financial
requirements will be fulfilled from financial lenders and private investors (Schiraldi and Silva,
2012). The mission of Zara restaurant outlet is to provide the best environment to clients and also
deliver the highest standards of excellence to the food production, preparation and service to the
clients. The objectives of new venture concept are as follows-
 To set up a successful fast food outlet and to attract the clients.
 To expand the business into a number of outlets in different countries.
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The vision of Zara is to become one of the successful fast food outlets which sell quick
made food and satisfy the client’s demand. The focus of business is on serving high quality food
at great value.
Pricing and cost control
The business is new in market and also has varied competitors that are available with
selling similar products or services. Therefore, business is required to set unique prices at initial
startup and also adopt cost control method in order to save money and resources by adopting
competitive pricing model. Daily average spending and earnings need to be calculated in order to
analyze the potential aspects of earning maximum returns (Behery, Jabeen and Parakandi, 2014).
To start a fast food restaurant in crowded area will help in attracting both young and
business class people in order to obtain quick made food at value price. Therefore, there is a
wide range of opportunity in market of starting such a restaurant outlet which delivers a wide
range of menu and provide excellent experience to clients. Through, comparing any other
business in market as per the customer demand, it has high opportunity in enhancing the sales
and profitability. Thus, launching restaurant business assesses high opportunity gap in market in
order to attract the potential clients and for satisfying their demand as well (Lewis, 2014). Here,
Zara’s marketing team needs to identify the target market where business will be focusing to
attract potential clients and to achieve the final results. Zara targets both young and business
class people as they have less time of consuming food. Therefore, restaurant provides quick
made food which is easily consumed and business plans to start its venture in a crowded area like
shopping mall.
In spite of being mature, there are wide opportunities that are available in fast food
business which can be started to attract the young potential clients. Because there is high demand
of such quick made food among them as it saves their time and provides value pricing. Also,
such a new start up business is found to be feasible because entrepreneur can introduce varied
variations in food range and taste so that it assists in gaining attention of clients (Connolly,
Wolfgram and Santos, 2012). Zara Fast Food restaurant can launch particular outlet which offers
the products and services as per the needs of clients. Thus, through assessing such factors, it
helps in gaining confidence that this new business is feasible and will earn profits in the future.
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TASK 2: REQUIREMENTS FOR NEW BUSINESS START UP
There are varied requirements for the new business startup in order to attain the desired
results. These are as follows-
1. Structural Engineering and design consultant- It can be assessed that new start up
business requires an efficient consultant who designs the interior and exterior structure
of restaurant outlet so that customers can be attracted easily. However, it needs to be
designed effectively so that business would give tough competition to other rivals (De
Oliveira, Shayani and De Oliveira, 2013). Financial- It is the foremost requirement of newly launch business that they need to
arrange the financial sources in order to obtain funds. Therefore, entrepreneur needs to
attract different private investors to invest in business and also to take loan from
financial institutions in order to gain investment. Manpower- It is another requirement of startup business as it requires skilled and
talented human resources in different fields such as marketing, customer service, waiter,
chef etc. Therefore, it is significant for restaurant to select the best skilled employees
which helps them to provide the best quality service to guests and to satisfy their needs
as well (Feenstra, 2014). Systems and Equipment- It is also essential for business to obtain updated systems and
equipment so that fast service as well as production and preparation of food can be
developed. With the help of such advanced technology equipment, it assists in attaining
the desired objectives for new venture. New start up restaurant outlet requires computer
systems for billing and maintaining the record of clients and employees. Also, there are
different equipment which are required in business such as dishwasher, glass washer as
well as cutlery and kitchen equipment etc. (Jones and et.al., 2013). Market Information- New start up restaurant business needs to undertake effective
marketing team so that they can assess the market information about the tastes and
preferences of clients. Through carrying out proper market research and development, it
helps in gaining useful information about launching up of new business and for attaining
the outcomes. Location- Also, it is significant for a new business to select appropriate location such as
crowded place i.e. shopping mall where they can attract maximum young clients who
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visit for window shopping and can consume quick made food while moving around
(Venkatesan, 2011). Legal requirement- Further, it is essential for the entrepreneur to obtain different legal
requirements such as patent, copyright and trademark so that they can carry out their
unique business idea in the market.
 Capital- It is one of the crucial requirements of business as it is essential for new start up
business is required to attain initial investment for setting up the venture. Entrepreneur
needs to obtain funds to start the business idea and thus, to attain revenue in terms of
profits (Liebersohn, 2010).
Furthermore, there are different management skills which are required to be there in
entrepreneur in order to make the new start up business successful. These are as follows- Leadership skills- An entrepreneur is required to possess effectual leadership skills in
order to launch the business successfully in market. Thus, through having such ability, it
assists the individuals to initiate and lead in order to develop accurate decisions that
results in the growth of firm. Risk taking- It can be evaluated that there is no guarantee that new launch business
would result in achieving success. It is because; it involves greater risk as it requires
varied resources and investment. Therefore, it is necessary for the businessperson to have
certain experience and to obtain risk attitude that would help in attaining success in the
business (Vega and Bahnan, 2014). Problem solving- The individual is required to obtain problem solving skills in order to
resolve the conflicts among workers and to attain success in business. Therefore, it is
crucial for businessman to gain confidence in decision making ability and to develop the
relationship with employees to achieve success in new start up business. Communication- It is another important management skill which is required among
individuals which helps them to develop effective communication within employees. By
developing the best communication, it helps workers to understand the requirement of
employer and to provide them suitable results to attain the success of new start up
(Sahlman, 2008). Financial and market awareness- It is a crucial management skill which is required
among entrepreneur in making evaluation of the prospects for getting an edge in the
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market. Through this, efficient system of working can be developed by the entrepreneur
and success in market can be attained (Thomas and et.al., 2014). Interpersonal skills- As the new start up business have varied growth opportunities and
provides unique services and products to clients which satisfies their needs, therefore, it
is significant for him to possess suitable interpersonal skills as it would help them in
developing the business activities and in making the startup business successful (Ward,
2011). Creativity- It is another skill which needs to be obtained by the entrepreneur while
launching the new business venture. Thus, through creative ideas, it assists the
individuals to develop varied unique business ideas and to attain maximum results. It also
helps them to attain competitive advantage from other firms as the concept of
organization is unique which is not used by any other competitor in market.
 Customer focus- Entrepreneur needs to obtain such skill also as customers are the main
part of any business. Therefore, it is essential for him to focus on the needs and
requirements of clients and to satisfy their wants. Having good customer focus will state
that every individual's need is fulfilled that would ultimately help in attaining success of
new start up business (Monks and et.al., 2014).
TASK 3: PROPOSED BUSINESS MODEL THAT HOW NEW VENTURE
WILL WORK TO ACHIEVE POSITIVE FINANCIAL RESULTS AND
BY WHEN
It can be evaluated that the proposed business model for new fast food venture will
require appropriate financial projection in order to attain positive financial results and to gain the
profitability. Through developing financial statements, it assists in analyzing the time when the
business will start earning profits on the investment made. Through break even analysis, the year
in which profits will be earned can be assessed. However, in the initial start-up, business is
required to control the cost so that the best outcomes can be attained.
Financial Projections
Profit and Loss (Income statement)
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The projected five year profits and loss statement is prepared for the new start up venture,
that is, Zara Fast Food Restaurant. It is presented below-
Year 0 1 2 3 4 5
Revenue 0 40000 42500 45000 48750 52500
Cost of sales 0 18000 1,6250 17500 19375 21250
Gross profit 0 22000 26250 27500 29375 31250
Expenses/overheads
Premises (rent, rates) 7000 7000 2000 2000 2000
Wages and salaries 5000 5000 5500 5800 6000
General expenses 7000 7460 6200 6150 6212
Interest and bank
charges payable
600 700 700 700 700
Lease payments 1800 1800 1800 1800 1800
Depreciation 0 0 0 0 0
Other expenses 2000 6000
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Total
expenses/overheads
0 23400 27960 14400 16450 16712
Profit before tax 0 -1400 -1710 13100 12925 4538
Tax @25% 3275 3231.25 1134.5
Profit after tax -1400 -1710 9825 9693.75 3403.5
Dividends 500 1000 1000
Transfer to reserves -500 -810 9325 8693.75 2403.5
Cash flow statement
Year 0 1 2 3 4 5
CASH INFLOWS
Cash from Sales 300000 325000 350000 387500 405000
Directors loans 0
Share capital 70,000
Other cash inflows
TOTAL CASH
INFLOW
60,000 300000 325000 350000 387500 405000
CASH OUTFLOWS
Payments for
materials
1,30,000 130000 154750 167875 185513
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operating expenses 0
Premises (rent,
rates)
20,000 20,000 21000 20,000 20,000
Wages and salaries 0 40,000 50,000 54000 57000 60,000
General expenses 0 60,000 77600 61000 60500 62122
Interest and bank
charges payable
0 4,000 8000 8000 8000 8000
Lease payments 15000 15,000 15,000 15,000 15,000
Corporation Tax 3,275 7,345 10,489
Market survey costs 4,000
Other preliminary
expenses
13,000
Plant and other
capital expenditure
0
Loan repayments 0 0 0 0 0
Dividends 5000 10,000 10,000
TOTAL CASH
OUTFLOWS
52000 269000 310600 321025 345720 336124
Cash flow summary
NET CASHFLOW 18,000 31,000 14,400 28975 41780 68876
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FOR PERIOD
OPENING CASH
BALANCE
0 18000 13000 1440 27535 14245
CLOSING CASH
BALANCE
18000 13000 1440 27535 14245 54631
With the assistance of preparing such financial statements, it assists in analyzing that new
launched venture will be starting earning income in the form of profits after its second year of
launching. Thus, it assists he entrepreneur to spend money on the financial activities of firm as it
will give profit after second year of launching.
Key assumptions
There are varied assumptions that need to be made while determining the finance of new
venture. These are as follows-
 It has been assumed that fast food market is already at growth rate therefore, business
faces various difficulties to attract potential customers and thus, enhances the sales of
firm.
 Further, it has been assessed that it requires varied expenses for the organization to start a
new venture. With the increase in sale, the expenditure of firm is also increasing every
year.
 However, it can be assumed that because of uniqueness in products and services, it helps
in increasing the profitability of firm in the market.
 Business has to pay interest to financial institutions and to private money lenders.
Sources and uses of funds
It is essential for the firm to make initial investment in order to carry out the results. Also,
there are varied sources from which funds can be collected such as internal and external sources
of finance. New venture has taken loan from bank which is the liability and it helps the firm in
fulfilling its long term requirement. However, bank loan acts as an effective source that is used
by the organization in meeting the needs appropriately. Business requires huge requirement of
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