Effective Store Selection for Mr. Healthy Fast Food Restaurant in UK Market

The assignment content highlights the importance of selecting a suitable location for Mr. Healthy fast food restaurant in the UK market to fulfill buyers' convenience needs. Additionally, it emphasizes the need for managers to improve their knowledge on various factors such as target audience, finance, and employee skills to ensure the success of a new venture. Furthermore, the content stresses the significance of developing necessary management skills among workers and employers to achieve business growth.

MANAGERIAL SKILLS
AND
ENTREPRENEURSHIP

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. New venture concept and opportunity gap in market.........................................................1
2. Requirement of new business along with the management skills which are needed in order
to make business successful...................................................................................................3
3. Proposing the business model in order to explain that how new venture will achieve the
positive financial result...........................................................................................................6
4. Managing the business risk..............................................................................................11
5. Conditions which must prevail to avoid failure...............................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

LIST OF FIGURE
Figure 1: Break Even Point............................................................................................................11
LIST OF TABLES
Table 1: Projected Profit and Loss Account....................................................................................7
Table 2: Cash Flow Statement.........................................................................................................8
Table 3: Balance Sheet....................................................................................................................9
Table 4: Break Even Point.............................................................................................................10

INTRODUCTION
Entrepreneur is the person who takes initiative in converting innovative idea into the
practical concept (Who is entrepreneur, 2015). This type of person plays very crucial role in
growth of economy. However, in order to become the entrepreneur there are some soft skills
which is required by an individual. It consists of problem solver, initiator, motivator and
innovator etc. For the present report, a business plan is prepared for starting a new healthy fast
food restaurant. This restaurant will be called by the name of Mr. Healthy. The report will
provide detailed description regarding the new venture concept. In addition to this, the study will
also showcase ways that entrepreneur will use with an aim to manage different type of risks
associated with stating of new business in an effective way.
1. New venture concept and opportunity gap in market
The new venture concept such as Mr. Healthy will be the fast food restaurant which will
be started in United Kingdom market. The detailed description with respect to the new start up is
given below:
Features of Mr. Healthy fast food restaurant
The new venture provides healthy and nutritious food to United Kingdom buyers.
Furthermore, the organization will offer different type of foods which are rich in proteins as well
as carbohydrates. In accordance with the given context, number of dishes will be offered by the
manager of Mr. Healthy fast food restaurant. It consists of burgers, patties, tacos and many more
dishes etc. In UK, there are many firms which provides these kinds of foods and services
(Connolly, Wolfgram and Santos, 2012). However, the product which is being offered by these
enterprises does not possess healthy element. Thus, with an aim to entail healthy element in the
food, varied type of modification will be performed in the food. For example, in order to make
the bread, wheat and pearl millet flour will be used. In addition to this, with an aim to maintain
the quality of vegetables, efforts will be made by the manager of organization in terms of
purchasing fresh vegetables from the store. Through this way, high quality of product will be
provided by Mr. Healthy fast food restaurant to its respective buyers. By complying with the
given type of activity, satisfaction of the customer will be maintained in an effective way.
Furthermore, the product will be sold by Mr. Healthy fast food restaurant by using both
direct and indirect means of distribution. In order to distribute product directly to buyers, the
firm will develop the website. This website will offer varied food options to its respective buyers
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(Feenstra, 2014). Moreover, the enterprise will also sale its food from its own outlet. This outlet
will be constructed in the areas which help in providing convenience to the buyers. In addition
to this, the restaurant will also provide option to its buyers to make the food as per their own
needs as well as demands. For example, if one of client of cited firm has given diet chart or diet
plan. On the basis of given diet plan respective customers can give instruction to the chef of Mr.
Healthy fast food restaurant and thereby they can enjoy healthy meal which will be prepared by
chef of the restaurant..
Target customers of Mr. Healthy fast food restaurant
The corporation targets buyers who are young customers as well as individual who have
suffered from diseases like obesity and diabetes etc. In this context, here those young buyers will
be targeted by the organization who are more health conscious and has been searching for such
type of firms which produces foods as per their diet plan (Jones and et.al., 2013). In addition to
this, Mr. Healthy fast food restaurant will also target old buyers who are suffering from diabetes.
Thus, it can be said that all type of buyers irrespective of their age are considered as target
customers for the company.
Vision and mission of Mr. Healthy fast food restaurant
 The firm vision is to become global leader in fast food restaurant business.
 Mr. Healthy fast food restaurant has the mission to fulfil healthy food related needs and
demands of its respective buyers.
Besides this, some objectives of cited firm are also identified. These all are enumerated in
below:
 To raise the sales of Mr. Healthy fast food restaurant by 30% till the year 2019. To attract large number of buyers towards corporation by using modern promotional
means like social networking sites.
Competitive advantage
The cited firm has the competitive advantage in providing healthy and nutritious fast food
dishes. In addition to this, making customized meal for the buyers is being regarded as another
strategic capability of the new business.
Opportunity gap in market
There are many types of restaurants who functions in United Kingdom which offers
varied type of foods. In this context, it is identified that there are some firms which provides
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healthy foods to their customers. But, still UK market does not possess such type of firms that
are producing only healthy foods. Furthermore, it has also being identified that the list of
organization which prepares food as per the diet chart of buyers is very few in United Kingdom
market (Parks, Olson and Bokor, 2015). Thus, it is being regarded as the major gap which can be
seen in the respective market. However, with an aim to fill the given gap, the new venture
concept such as Mr. Healthy fast food restaurant will play very crucial role. Here, by launching
the given business, the needs of buyers can be met by organization. As a result of it, the new
venture will achieve success in the market in an effective way. Overall, it can be said that it is
very essential for the manager to constantly gather information with regard to the changes which
are occurring within the business environment of nation (Vega and Bahnan, 2014). This is
because; by complying with the given type of activity, manager can gather the information with
respect to the opportunities which are prevailing within market. These all are being regarded as
the major reasons due to which decision regarding launching of new venture such as Mr. Healthy
fast food restaurant is taken.
New business feasibility
It is feasible for the entrepreneur to launch Mr. Healthy fast food restaurant in United
Kingdom market. From the report of WHO (World Health Organization) it is analysed that, 74%
of men and 64% of women in UK will come under the category of overweight till the year 2030
(WHO Report, 2015). This is the shocking news for government as well as citizens of UK.
However, by launching Mr. Healthy fast food restaurant in the given market significant
contribution can be given by the buyer to the particular problem. Furthermore, by attracting the
given type of buyers towards firm, Mr. Healthy fast food restaurant will be able to direct its
efforts in terms of achieving its framed objective in an appropriate manner. In addition to this,
there are number of people who are suffering from diabetes. Thus, with the help of this business
customized food will be produced for the given buyers. Hence, above given facts supports
feasibility aspect of this new venture concept.
2. Requirement of new business along with the management skills which are needed in order to
make business successful
Number of information as well as resources will be required by the entrepreneur with an
aim to practically apply the new concept such as Mr. Healthy fast food restaurant. The detailed
explanation regarding the same is depicted below:
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 Financial resources: For the purpose to start this new venture, around 12000 British
pounds will be required. Here, with an aim to fulfil the need relating to money, manager
of Mr. Healthy fast food restaurant will take assistance from different type of internal as
well as external financial resources (Schiraldi and Silva, 2012). Human resources: In order to start the new venture, the need relating to the employees
will also arise in front of the manager of the cited enterprise. This is because; with the
help of workers best quality of services will be being delivered by the manager of Mr.
Healthy fast food restaurant to its respective buyers. At the initial phase, in total around 5
to 6 people will be required for new restaurant business (Baron, 2007). Physical resources: Here, physical resources will be needed in the form of material and
equipment which are required for constructing building. In addition to this, firm will also
purchase varied equipment for the purpose to décor its store in the stylish way. Information about location: Besides all these given resources, manager of Mr. Healthy
fast food restaurant will also require information about location where it will establish its
business (Sahlman, 2008). The selection of restaurant location must be done in such a
manner which help in fulfilling convenience related needs and demands of the buyers.
 Information about firm's competitor: The new venture also has to gather information
about its competitors. In this regard, it will assemble the information regarding the type
of food which is offered by its rivalries as well as form of marketing strategies being
adopted by them etc. On the basis of given information manager of Mr. Healthy fast food
restaurant can frame its strategy (McKeever, 2012).
In order to ensure the success of new business, number of management skills are assessed
which are needed by the manager of Mr. Healthy fast food restaurant. Problem solving skill: In order to gain success in new business, manager of the firm will
require problem solving skill (Skill needed among manager, 2015). By using the given
skill, manager of cited firm will resolve the problem which is occurring within firm. In
addition to this, with the help of given skill, timely action will be taken by manager of
cited corporation to overcome business problem. Communication: Manager of firm has to handle number of responsibilities.
Furthermore, manager is also responsible for giving direction to employees. It is the
manager who communicates goals and objectives of the enterprise to its respective
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workers. So, with an aim to fulfil all these given roles and responsibilities in an
appropriate manner, manager of Mr. Healthy fast food restaurant will require good
communication skill (Hiduke and Ryan, 2013). This ability will be used with an aim to
perform work of enterprise. In addition to this, with the help of given ability employer
can direct its employees towards strategic goals and objectives of the enterprise. Motivation ability: It is being considered as one of the most important management
ability. In this context, it has been seen that high pressuring work situation or
environment creates fatigue among employees. As a result of it, they feel highly
motivated as well as dissatisfied. Thus, in order to maintain satisfaction of workers
during the given circumstances, manager will require motivational skill. By using this
skill, motivation of cited firm workers can be raised. . Furthermore, with the use of this
ability the framed strategic goals can be accomplished (Barringer, 2012). Time management: While starting the new venture, managers are required to handle
numbers of tasks and responsibilities which need to be accomplished within the given
specified time period. In order to perform the same, managers of Mr. Healthy fast food
restaurant will need thorough information about time management tactics. In this
context, two basic type of time management tactic are identified which can be used by
them. It consists of prioritizing and setting goals etc.
 Leadership ability: A manager can be regarded as good manager if he/she will be able to
lead the group of person or individual. Employees require assistance in each and every
task which they are doing. However, if manager will not provide such assistance to them
at that time they feel dissatisfied (Li and Sun, 2009). It is due to the presence of given
aspect only, the need relating to leadership skill arise among manager. Furthermore, the
given skill will also help Mr. Healthy fast food restaurant manager in taking accurate and
crucial decision about the organization. Overall, it can be said that these are being
regarded as the major skill which are required among manager to make the business
successful.
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3. Proposing the business model in order to explain that how new venture will achieve the
positive financial result
A business model is prepared with an aim to showcase that how Mr. Healthy fast food
restaurant will achieve the positive financial result. The business model will cover following
points:
Finance needed for new business along with the way to obtain the same
There are around 12000 pound which will be required with an aim to start Mr. Healthy
fast food restaurant in United Kingdom market. It is huge amount and thus with an aim to obtain
the same, manager of cited corporation will take assistance from number of financial sources.
Here, 2000 pound will be obtained through personal selling. It is being regarded as one of the
most popular internal source of finance. In addition to this, around 5000 pound will be obtained
from investors. However, rest 5000 pound will be raised by taking loan from the bank which is
one of the external methods of raising finance. These all given money will be invested in the
number of activities. For instance, 3000 pound will be invested in the construction of building
for restaurant. Furthermore, 5000 pound will be invested in the activity such as purchasing food
raw material for Mr. Healthy fast food restaurant. Around 4000 money will be invested in the
recruitment and selection function of the firm followed by miscellaneous expenses. This is
investment plan for the new venture concept.
Number of employees needed
In total, 5 employees will be needed for the new venture. 2 will be chef, 2 waiters and 1
manager. In order to recruit them, firm will take assistance from external source of recruitment
such as campus recruitment and contacting external agencies etc. With the help of these sources,
Mr. Healthy fast food restaurant can recruit best employees who can assist it in the process of
achieving strategic goals and objectives of enterprise. In addition to this, by carrying out the
recruitment of skilled employees only satisfaction of customers will be maintained. This leads to
new venture in terms of increased profits and sales.
With an aim to achieve positive financial result, it is required by the manager of new
restaurant to prepare appropriate financial projection. With the help of this statement, firm can
take information with respect to that particular year in which it will start earning profits
(Markman, Balkin and Baron, 2002). Furthermore, the given statement will also assist the
enterprise in terms of obtaining accurate financial information of cited new company. By using
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this information, varied type of financial decision will also be taken by the manager of Mr.
Healthy fast food restaurant.
FINANCIAL PROJECTION
Projected profits and loss account
Projected five year profits and loss account for Mr. Healthy fast food restaurant is
enumerated in below:
Table 1: Projected Profit and Loss Account
Projected Profit and Loss Account for period of three years
Particulars Pre-Operating
Year Year 1 (£) Year 2
(£)
Year 3
(£)
Year 4
(£)
Revenue 0
Sales from Products and
services sold 0 100000 120000 200000 250000
Less: COGS (30%) 0 30000 36000 60000 75000
Gross Profit 70000 84000 140000 175000
Operating Expenses
Legal and Registration Charges 1000 0 0 0
Research and Development 5000 2000 2500 1000 700
Raw Material Charges 6000 10000 8500 5000 4000
Promotional Charges 1000 700 700 400 350
Lease expenses 7000 10000 10000 10000 10000
Utilities 0 2750 2750 3050 3100
Rent 0 7500 7500 7500 7500
Insurance Premium 1000 1000 1000 1000 1000
Salary and wages 0 40000 43000 45000 46000
Sundry Expenses 300 500 600 310 500
Depreciation 0 5000 5000 5000 5000
Less: Total Operating
Expenses 21300 79450 81550 78260 78150
Operating Profit -21300 -9450 2450 61740 96850
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Less: Interest 0 4500 3000 1500 0
PBT -21300 -13950 -550 60240 96850
Less: Tax 0 0 0 6024 9685
Net Profit -21300 -13950 -550 54216 87165
Table 2: Cash Flow Statement
Cash Flow Statement for period of three years
Cash flow statement Pre-Operating
Year Year 1 (£) Year 2
(£)
Year 3
(£)
Year 4
(£)
CASH INFLOW
Opening Balance 0 0 -26600 -36300 30116
Cash Sales 0 100000 120000 200000 25000
0
Owner's capital 60000
Bank Loan 90000
Total Cash Inflow 150000 100000 93400 163700 28011
6
CASH OUTFLOW
Fixed Assets 50000 0 0 0 0
Working Capital 22000 20000 24000 25000 30000
Legal and Registration
Charges 1000 0 0 0 0
Research and Development 5000 2000 2500 1000 700
Raw Material Charges 6000 8000 5000 3000 4000
Promotional Charges 1000 350 350 200 175
Lease expenses 7000 10000 10000 10000 10000
Utilities 0 2750 2750 3050 3100
Rent 0 7500 7500 7500 7500
Interest 0 4500 3000 1500 0
Salary and wages 0 40000 43000 45000 46000
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Sundry Expenses 300 500 600 310 500
Insurance 1000 1000 1000 1000 1000
Tax 0 0 0 6024 9685
Loan Repayment 0 30000 30000 30000 0
Total Cash Outflow 93300 126600 129700 133584 11266
0
Closing Balance 56700 -26600 -36300 30116 16745
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Table 3: Balance Sheet
Balance Sheet for period of three years
Assets Year 1 (£) Year 2 (£) Year 3 (£) Year 4 (£)
Current Assets
Cash 100000 120000 200000 250000
Other Current Assets 40000 50000 60000 40000
Total Current Assets 140000 170000 260000 290000
Long-term Assets 50000 50000 50000 50000
Accumulated Depreciation 5000 5000 5000 5000
Total Long-term Assets 45000 45000 45000 45000
Total Assets 185000 215000 305000 335000
Liabilities and Capital Year 1 (£) Year 2 (£) Year 3 (£) Year 4 (£)
Current Liabilities
Accounts Payable 48950 65550 100784 187835
Current Borrowing 0 0 0 0
Other Current Liabilities 0 0 0 0
Subtotal Current Liabilities 48950 65550 100784 187835
Long-term Liabilities 90000 90000 90000
Total Liabilities 138950 155550 190784 187835
Paid-in Capital 60000 60000 60000 60000
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Retained Earnings 0 0 0 0
Earnings -13950 -550 54216 87165
Total Capital 46050 59450 114216 147165
Total Liabilities and Capital 185000 215000 305000 335000
From the profits and loss statement, it is assessed that start up business will start to earn
profit from the third year.
Key assumptions
 90000 pound is taken as loan and it will be paid in three instalments. The interest rate is
assumed as 5%.
 Tax rate is assumed as 10%. 50% rate is the promotional charges.
Break even analysis
It is the point at which firm will not get any profit or loss. It is regarded as desirable point
which each firm want to achieve (Break even point, 2015). In this regard, break even analysis has
been carried out for the new venture Mr. Healthy fast food restaurant. Herein, two criteria are
selected. X axis showcase the number of customers, whereas Y axis showcase the revenue
earned by the start-up firm.
Table 4: Break Even Point
Unit Sales VC FC TC Sales
30000 45000 100000 145000 120000
40000 105000 200000 305000 280000
50000 180000 300000 480000 480000
60000 270000 400000 670000 720000
70000 375000 500000 875000 1000000
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Figure 1: Break Even Point
From the given graph, it has been identified that Mr healthy fast food restaurant will
achieve BEP in between 50000 and 60000 units.
4. Managing the business risk
Every manager who takes initiative for starting the new business has to face number of
risks. Thus, it is essential for the entrepreneur to access number of risk prior to the starting of
new enterprise. This is because; by complying with the activity only an effective action will be
taken by the manager of new firm to identified risks. Number of measures is proposed with an
aim to manage the risks which are being faced by the manager of Mr. Healthy fast food
restaurant. The explanation of same is depicted in below: Risk related to new product concept failure: It is being regarded as one of the most
prominent risk which is being faced by the manager of enterprise who makes efforts in
terms of launching new products and services in the respective market. This type of
failure will lead to cause direct impact on sales and profitability related condition of
organization (McGregor, Symonds and Foust, 2006). However, in order to manage the
given risk it is being required by the manager of start-up business Mr. Healthy fast food
restaurant to conduct thorough environmental analysis. By performing the same, opinions
as well as views of respective customer will be gathered for the new venture. Through
this way, manager can assess that whether it is beneficial for it in terms of launching new
business with innovative product concept in particular market or not.
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 Competitive risk: It is another risk that start up business will face. In this, corporation
will face the risk of not working well in the competitive business environment. (Wu and
Shieh, 2007). For the purpose to manage the given risk, it is being required by the
manager that before taking decision for the selection of specific tactic the firm should
analyse the condition prevailing in the competitive environment. On the basis of given
information start up business Mr. Healthy fast food restaurant must carry out selection of
suitable strategy. Financial risk: This risk occur when manager do not manage its wealth properly.
However, this risk can be managed if proper planning will be done by the start-up
business for managing the wealth (Alsos, Isaksen and Ljunggren, 2006).
 Risk of not getting the skilled people: This is the most crucial risk which is being faced
by the manager of organization which starts new business. This risk occur when manager
do not get skilled employee who possess the capability to carry out the production of
products and services for enterprise. This risk can be managed by selecting appropriate
recruitment sources (Bedford and Cooke, 2001). Furthermore, several tests need to be
conducted with an aim to assess the ability of workers.
5. Conditions which must prevail to avoid failure
It is essential for the entrepreneur to take measures with respect to the failures. This is
because, if not taken then in the given circumstances then it will become difficult for it to mark a
remarkable presence in the competitive business environment. In accordance with the given
context, some conditions are identified which manager of Mr. Healthy fast food restaurant must
follow with an aim to avoid failure. These are as follows: Making appropriate decision about target audience: While getting entry into new
market, it is required by manager to gather thorough and proper information about its
target audience (Melnikov, 2011). In this regard, it must assess the needs and demands of
its customers before carrying out production of goods and services. Through this way,
manager can avoid the condition of not working well in the respective market. Improving the effectiveness of management: Poor management is considered as the
major problem that lead firm into failure. In this context, it has been seen that due to lack
of experience, new entrepreneur faces poor management problem in the areas such as
finance, marketing and HR etc. This problem can be resolved by taking views and
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opinions from other entrepreneur who is achieving success in the hospitality industry. By
complying with the given type of activity, strategic goals and objectives of firm can also
be met (Saunders, Cornett and McGraw, 2006).
 Selecting suitable location for the opening of restaurant: The location of store plays
very critical role in success of any business. Thus, ineffective selection of store will lead
firm into failure. Thus, for manager it is necessary to select such location of its restaurant
which helps in fulfilling the convenience related need of buyers. Through this way,
success of Mr. Healthy fast food restaurant can be ensured in UK market (Boeker and
Wiltbank, 2005).
CONCLUSION
It can be concluded that, in order to carry out practical implementation of the new venture
concept, manager has to improve its knowledge in number of factors. It consists of type of
audience, finance needed and skill required among employees etc. By assembling information
about all these given aspect manager can enhance its profits by using innovative idea. In addition
to this, by developing necessary management skill among workers and employers, the success of
new venture can be ensured.
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REFERENCES
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active element in new venture creation. Strategic Entrepreneurship Journal. 1(1-2). pp.
167-182.
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures. Pearson.
Bedford, T. and Cooke, R., 2001. Probabilistic risk analysis: foundations and methods.
Cambridge University Press.
Boeker, W. and Wiltbank, R., 2005. New venture evolution and managerial capabilities.
Organization Science. 16(2). pp. 123-133.
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Agency's Business Plan Approach. Transportation Research Record: Journal of the
Transportation Research Board. 2274. pp. 15-22.
Feenstra, D., 2014. The Standout Business Plan: Make Irresistible-and Get the Funds You Need
for Your Startup or Growing Business. Journal of Applied Management and
Entrepreneurship. 19(4). pp. 116.
Hiduke, G. and Ryan, J., 2013. Small Business: An Entrepreneur's Business Plan. 3rd ed.
Cengage Learning.
Jones, C. and et.al., 2013. The student business plan: useful or not? Industry and Higher
Education. 27(6). pp. 491-498.
Li, H. and Sun, J., 2009. Predicting business failure using multiple case-based reasoning
combined with support vector machine. Expert Systems with Applications. 36(6). pp.
10085-10096.
Markman, G. D., Balkin, D. B. and Baron, R. A., 2002. Inventors and new venture formation: the
effects of general self‐efficacy and regretful thinking. Entrepreneurship Theory and
Practice. 27(2). pp. 149-165.
McGregor, J., Symonds, W. C. and Foust, D., 2006. How failure breeds success. Business Week.
10. pp. 42-52.
McKeever, M., 2012. How to Write a Business Plan. Nolo.
Melnikov, A., 2011. Risk analysis in finance and insurance. CRC Press.
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