Entrepreneurship and Business Concept Analysis for Prime Restaurant

This article discusses the entrepreneurship and business concept analysis for Prime Restaurant, an environment-friendly restaurant offering Chinese, Indian and Continental food items. The article includes a case study on Jack Ma, the co-founder of Alibaba Group, and applies Timmons FORT model to his success. The article also includes a business canvas, market research, and potential revenue streams for Prime Restaurant.

Running head: ENTREPRENEURSHIP
Entrepreneurship
Student’s name:
Name of the university:
Author’s note

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Table of Contents
1. Individual Case Study..................................................................................................................2
1a. Conducting desktop research on an ‘entrepreneur’...............................................................2
1b. Introducing Timmon’s FORT model.....................................................................................3
1c. Applying FORT model to the chosen entrepreneur...............................................................4
1d. Concluding successful launching and growing the new venture...........................................6
2. Individual/Group Business Concept Analysis.............................................................................7
Product description......................................................................................................................7
Business Canvas..........................................................................................................................8
Market Research........................................................................................................................10
Basic Financial Projection.........................................................................................................11
Evaluation of the feasibility of the business concept.................................................................15
Reference List................................................................................................................................18
Appendices....................................................................................................................................20

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1. Individual Case Study
1a. Conducting desktop research on an ‘entrepreneur’
Ma Yun; professionally known as Jack Ma is one of the successful entrepreneurs of
recent time. Jack Ma is a Chinese entrepreneur and he is the co-founder of Alibaba Group. In
trade, Ma has worth estimated of $42 billion and it includes almost 7.8% of the stake of Alibaba
(Kim et al. 2017). Alibaba Group is famous e-commerce group in China. Jack Ma grew up in
communist China and Ma was rejected from many job interviews and Alibaba was his third
internet business attempt.
Jack Ma was born in 1964 in Hangzhou and it is in the South-eastern part of China. Jack
Ma has a younger sister and an elder brother. His family did not have much money. Ma lived in a
place which is the hometown of tourists and Ma learnt English from there. Ma failed in the
university-entrance exam twice, he finally passed the exam on the third try. He went to attend
Hangzhou Teachers Institute and he graduated in the year 1988. After getting maximum
rejections; he was hired as an English teacher. First Ma Started a translation business and he tried
to assist a Chinese firm to recover the payment. His first two attempts failed and he assembled 17
of his friends in the apartment to start an online marketplace. This ‘Alibaba' site allowed the
exporters to post about product listing. In the year 1999, his online platform gathered the funding
of $25 million and Yahoo also invested $1 billion in Alibaba venture (Tan et al. 2017). Revenue
of Alibaba Group at present reached Yen 250 billion and Alibaba Group provides the services
and products like an online auction, mobile commerce, e-commerce, online money transfer and
online shopping.
[Refer to Appendix 1 and 2]

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1b. Introducing Timmon’s FORT model
Timmons Model of entrepreneurship has three critical factors for a successful venture and
these three factors are teams, opportunities and resources. The successful entrepreneur needs to
balance three factors in order to make the successful entrepreneurship. As stated by Timmons
and Spinelli (1994), the entrepreneur finds for the opportunity and after finding the opportunity;
the entrepreneur shapes the opportunity into the high-potential venture through drawing up the
team by gathering the required resource. In order to start the business; the entrepreneur
capitalizes the opportunity putting the risk of his/her career, net worth and cash flow.
Opportunity factor is the entrepreneur's idea about recognising the underlying marketing
demand which determines the potential idea of the business. The idea can become viable when
the entrepreneur anchors the services or the products which can create or add value to the
consumers. The business plan and the financial projection come secondary as the identification
of viable opportunity is most important. Opportunity in the market can make the business plan
full-proof (Morris and Kuratko 2014).
After identifying the opportunity in the market; the entrepreneur starts the business by
selecting the team. The nature and size of the opportunity in the market shape the team. A good
team is indispensable with the success and good team can unlock the higher potential of the
business. Roles of the team are to remove the ambiguity and opportunity by applying the
creativity and to provide the leadership to control the available resources in an effective manner.
Extensive resources can reduce the risk to start a venture and it encourages bootstrapping
(Fernhaber et al. 2014). The advantages of bootstrapping are associated with instilling the
creative resources and driving down the marketing cost and encouraging the creative resources.

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Figure 1: Timmons Fort Model of entrepreneurship
(Source: Timmons and Spinelli 1994)
1c. Applying FORT model to the chosen entrepreneur
The opportunity factor
In the year the 1990s; Jack came to know about the internet and he began to observe the
internet as a new trend in technology. In the year 1995, Jack Ma visited the US for the first time
and that time Ma already had begun the translation company to use China's export boom. Jack
Ma has introduced the word ‘internet' and he first searched for the word ‘beer'. Jack Ma was
astonished to find that there was no such Chinese beer name came into the search result. Ma did

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not find anything related to China on the internet. Jack Ma decided to open ‘Chinapage' which
was the directory of various Chinese companies looking for the customers abroad. Chinapage
was one of the first internet-based organisations in China. The success of China page led to Jack
appoint as head of firm China Electronic Commerce Centre (Kim et al. 2017). Chinapage
organisation did not work and after four years; Ma knew that internet business has the maximum
opportunity. Jack founded Alibaba with the help of some of his friends and the intention was to
make a website to be more likely a one-stop solution for the business-to-business transaction. In
addition, Jack Ma had intuition that the internet has enough potential to reach a large number of
customers. Jack Ma believed that internet has the opportunity and he was able to face the issues
which came to his way. Jack was able to find the gap in the Chinese market at that time Chinse
market lacked the internet based business. Alibaba.com fulfilled the demand in the Chinese
market and he also started ‘Taobao' (Thewisdompost.com 2018). This particular website started
trending over the internet and it became top e-commerce in China.
Team Factor
After identifying the opportunity through internet business; Jack Ma tried to launch the
business. In order to build the team; Jack started the team with only 17 people. Jack had
experience in working with the government and he failed in making the partnership with
government. Jack Ma developed the distaste for governmental bureaucracy and he did not run
the organisation like a bureaucrat. Jack Ma hired the people who loved their job and who had the
passion for doing their work skilfully. Jack Ma always tried to rectify the mistakes and he
concentrated on making his existing team stronger. Jack Ma and his team took the business
decision and one of the significant factors of the team was that Jack Ma always tried to choose
the women on the team. Jack Ma and his team began to be identified in the overseas. The

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company received funding from overseas business organisations as well. As stated by Feldman et
al. (2014), software engineers made the software and he trusts his team to make empower of the
organisation, it is one of the leadership functions of the organisation. Jack Ma wanted to know at
the initial stage that it is very difficult for an organisation to pull everyone's head in the same
direction.
Resource Factor
Resources of the organisation must be creative and it can provide stingy strategies to gain
control over the resources. The discipline of leanness in resources can lead towards the capital
efficiency of the organisation (Mauer et al. 2017). Jack Ma in the early stages attempted to raise
funds in Silicon Valley and he was unsuccessful and he was criticised for using this business
model. However, Jack Ma had succeeded in attracting Goldman Sachs to invest $5 million and
SoftBank of Japan also invested $20 million in Alibaba (Thewisdompost.com 2018). However,
the resources Alibaba are the funding, teamwork, the CEO and the technological support.
Alibaba went unprofitable till the time of 2003 and Ma launched the online auction business
named ‘Taobao.com'. In order to keep afloat in the Chinese economy, Ma and his team provided
the peripheral value-added support services (Scarborough 2016). Alibaba.com uses the unique
business model as it has three core businesses (YiDaTong, Taobao and 1688). According to Zhao
(2016), Alibaba has unconventional profit model as the maximum profit of Alibaba Group comes
from the keyword bidding, advertisement and it represents 57% of the total profits.
1d. Concluding successful launching and growing the new venture
It has been concluded that Jack Ma has been living in the future and he has a voracious
craving to increase the present circumstance of his life. Jack Ma is an ace communicator and he

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is a perfect business person. Jack Ma identified the importance and capability of the internet and
he united the team under the single goal. Changing the approach is another key to grab the
success rather than the uniting the company under the vision of one person. Jack Ma has the
foresight to develop the business and he had creative thinking skills. One of the most important
factors for the success of Jack Ma was that he hired the employees with superior skills which
helped Ma to carry out the important pillar of a great company. The venture of Alibaba was
successful; however, he tasted failure twice before and like other leaders, he learnt most from the
hardships and obstacles. Successful launching of the business was possible as Ma does not find
competitors as his enemies. The perfect combination of the team working good set of resources
and he identified the right gap in the market. Jack Ma built his empire in the rapidly developing
world and his venture has the potential to achieve more.
2. Individual/Group Business Concept Analysis
Product description
The green restaurant is a new concept as this type of restaurant is environment-friendly.
Prime Restaurant will be an environment-friendly restaurant which will offer Chinese, Indian
and Continental food items. Prime Restaurant is going to be an upscale restaurant which will
offer both rooftop seating and interior seating facility. Interior seating will have a touch of green
and the rooftop will also have a slight touch of green and grass. Apart from the soothing
atmosphere, the restaurant will have perfect waste management; energy efficient appliances,
recycled paper goods and the kitchen chimney will be furnished in a perfect way so that it may
not emit harmful gas. The supply chain of the restaurant will be environment-friendly and

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sustainably. The restaurant will have the capability of seating arrangement for 70 customers. The
speciality of the restaurant will be global food items prepared by world-class chefs and it will
offer lunch and dinner. Prime Restaurant will offer some of the famous Hong Kong-based dishes
also; such as Wontons, Roast Goose, Shrimp, Phoenix, Fish Balls and wind sand chicken.
Business Canvas
Key Partners
 Local raw
material
suppliers
 Waste
managem
ent
agencies
 Green
markets
 Interior
designers
Key activities
 Good customer
service
 Fast and
efficient
service
 Excellent food
quality
 Qualified
staffs
 Best chefs
Value Proposition
 Healthy food
and soothing
atmosphere
 Customers
will be able
to choose
their
preferred
food dishes
from diverse
choices
 There will be
employees
who will
guide the
customers
regarding
Customer
Relationship
 Prime
Restaura
nt will
make its
website
from
where
the
custome
rs can
get to
know
about
their
offers,
menu
Custome
r
segments
Prime
Restauran
t will
target the
upper-
middle-
class
people
who want
to have
quality,
healthy
food from
a diverse
range of

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choices
 Green
restaurant
 Rooftop
seating
facility
and the
custome
rs can
order for
home
delivery
 The
custome
rs can
write on
the
social
networki
ng pages
regardin
g their
likes and
dislikes
dishes
across the
global
The
restaurant
will also
target the
young
generatio
n who
can visit
in groups
Key resources
 Financial
resources
 Raw materials
providers
Channels
Website
Third party
food delivery
app

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 Human
resources
 Relationship
with waste
management
Direct selling
The customers
can directly call
the restaurant
for the
reservation of
seats and they
can order the
food
Cost structure
 Website and app development cost
 Restaurant set up the cost
 Marketing and PR campaign
 Equipment buying
Revenue streams
 The restaurant will gain money through the
selling of the food
 The initial set up of the restaurant will be
high; ROI will be higher
 The restaurant will start the membership
subscription for the frequent visitors
Market Research
Hong Kong food restaurant sales had reduced by 10.5% in the first half of 2016;
however, it has increased by 2.5% in the first quarter of 2018 (Statista.com 2018). Food &
Beverage industry has continued to shine in recent time as out of 73 international entrants in
Hong Kong; 37 of them were from food & beverage sector. The restaurant industry is mainly
based on the streets and outlets where the customers want to have the local foods and global
dishes. The restaurants in Hong Kong welcome the local customers with low-cost pricing.

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Tourists' visits are large in Hong Kong and local street foods are famous among the tourists.
Burgers and beers are famous among the international travellers and with people opting the fast
food over the fine dining. However, wealthy local customers and the tourists find the fine dining
options with rich atmosphere; the customers also find more innovative menus and promotions
from the restaurant. Sales revenue in restaurant and catering industry in Hong Kong is 113.4
Hong Kong dollars in 2018 and sales revenue of the restaurant industry would reach 123 billion
in Hong Kong dollars in 2019 (Smart 2017).
Basic Financial Projection
2019 2020
Gross revenue $4,125,000 $4,207,500
Cost of goods sold $320,000 $326,400
Gross margin $3,805,000 $3,881,100
Other revenue [source] $100,000 $100,000
Interest income $0 $0
Total revenue $3,905,000 $3,981,100
Operating expenses
Sales and marketing $80,000 $81,600
Payroll and payroll taxes $100,000 $102,000
Depreciation $153,000 $156,060
Maintenance, repair, and overhaul $0 $0

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Total operating expenses $333,000 $339,660
Operating income $3,572,000 $3,641,440
Interest expense on long-term debt $0 $0
Operating income before other items $3,572,000 $3,641,440
Loss (gain) on sale of assets $0 $0
Other unusual expenses (income) $0 $0
Earnings before taxes $3,572,000 $3,641,440
Taxes on income 30% $1,071,600 $1,092,432
Net income (loss) $2,500,400 $2,549,008
Assets Initial balance 2019 2020
Cash and short-term investments $500,000 $956,800 $2,689,436
Accounts receivable 100,000 1,000,000 1,000,000
Total inventory 250,000 500,000 500,000
Prepaid expenses 35,000 500,000 500,000
Deferred income tax 15,000 150,000 150,000
Other current assets 250,000 250,000 250,000

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Total current assets $1,150,000 $3,356,800 $5,089,436
Buildings $500,000 $500,000 $500,000
Land 100,000 100,000 100,000
Capital improvements
$
120,000 120,000 120,000
Machinery and equipment of kitchen
$
145,000 145,000 145,000
Less: Accumulated depreciation expense 0 153,000 309,060
Net property/equipment $865,000 $712,000 $555,940
Goodwill $50,000 $50,000 $50,000
Deferred income tax 50,000 50,000 50,000
Long-term investments 250,000 250,000 250,000
Deposits 2,500,000 2,500,000 2,500,000
Other long-term assets 2,500,000 2,500,000 2,500,000
Total assets $7,365,000 $9,418,800 $10,995,376
Liabilities Initial balance 2019 2020
Accounts payable $65,000 $65,000 $65,000
Accrued expenses 0 0 0
Notes payable/short-term debt 0 0 0
Capital leases 0 0 0

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Other current liabilities 0 0 0
Total current liabilities $65,000 $65,000 $65,000
Long-term debt from loan payment
calculator
9
5,000 $0 $0
Other long-term debt $0 $0 $0
Total debt $160,000 $65,000 $65,000
Other liabilities 0 0 0
Total liabilities $160,000 $65,000 $65,000
Equit
y Initial balance 2019 2020
Owner's equity (common) $500,000 $500,000 $500,000
Paid-in capital 0 0 0
Preferred equity 0 0 0
Retained earnings 100,000 100,000 100,000
Total equity $600,000 $600,000 $600,000
Total liabilities and equity $760,000 $665,000 $665,000

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Evaluation of the feasibility of the business concept
The restaurant business is not new as entrepreneurship venture; however, the green
restaurant is a new concept which will attract the customers as Prime Restaurant will be
perceived as the environment-friendly and responsible business venture. The strengths of the
business venture will be a business concept as the customers can relate to the business easily. In
Hong Kong market; restaurant industry has potential as the young generation wants to have the
good ambience with quality food. The marketing campaign for the business will open up the new
customer segment and the concept of ‘green' will increase the brand image of the organisation.
On the other side; restaurant industry and food and beverage market in Hong Kong has been
going through a gloomy phase. Most importantly, the travellers and the local customers both
want to have food items from a local restaurant or street shops. Prime Restaurant will be an
upscale restaurant and the customers need to spend money on the quality food. The operating
cost of the environment-friendly restaurant will be high and customer relations need to be good.
We, the owners of the business shall calculate total start-up cash needed for the business
and overall attractiveness of the similar business needs to consider. We should assess the
feasibility of raising enough money to fund the capital requirement. We shall use the saving and
take a loan from the bank. Financial feasibility is based on cost estimate and we shall spend
$339,660 in 2020. Calculating the cash flows will be generated by the strategy discounted to Net
Present Value (NPV). We shall invest costs; however, these are non-financial returns.
Organisational feasibility refers to the proposed business must have the sufficient management
expertise, resources and competence. The prime restaurant will have managerial ability to use
proper resources and competency to make the venture successful. The structure of the business

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will follow the hierarchy where owners will be on the top. We shall hire the skilled employees
based on the resumes. Professional skills of the employees will be higher as this will help the
restaurant to provide customer satisfaction.
I want to take up the venture as I have always been thrilled to start my own venture in the
shape of the restaurant. This business will require a good amount of money to start and I believe
that I can make the business successful. The capital requirement will be fulfilled through a bank
loan and I will recruit only educated staffs. I have learnt that entrepreneurship venture must have
a good team, resources; I think I will be able to make a good team and I will use the right set of
resources to make the business successful. In addition, Hong Kong restaurant industry has the
opportunity to start the new venture of the restaurant. Reviewing the demographic and economic
statistics of Hong Kong; it is clear that people like to have the street food and demand in
restaurant food is not sustainable. Upscale restaurant in Hong Kong can attract the customers
how belong to upper class and after comparing the local data which is similar to state or region
determining the strengths and weakness of the individual market.
Evaluation of the business concept:
Criteria Score
The attractiveness of idea: Would you enjoy doing it? 5
Ability to undertake: Do you have the skills needed to do it? 5
Practicality: Is it something that really can be done? 4
Potential market demand: Will customers buy it? 3
Ability to combat competition: Is there competition and can you combat it
in some way?
4

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Ability to differentiate: Can you differentiate it in some way that can be
sustained over a long period?
4
Price potential: Can you avoid competing simply on price? 4
Resource availability: Do you think you have, or can get, the resources you
need to start up this business?
3

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Reference List
Feldman, H., Vozikis, G., Mescon, T. and Liguori, E.W., 2014. Entrepreneurship: Venture
Initiation, Management and Development. Abingdon: Routledge.
Fernhaber, S.A., Gilbert, B.A. and McDougall, P.P., 2014. International entrepreneurship and
geographic location: an empirical examination of new venture internationalization. In Location
of International Business Activities (pp. 94-136). Palgrave Macmillan, London.
Kim, S., Zhang, X.A. and Zhang, B.W., 2017. Self-mocking crisis strategy on social media:
Focusing on Alibaba chairman Jack Ma in China. Public Relations Review, 42(5), pp.903-912.
Mauer, R., Neergaard, H. and Linstad, A.K., 2017. Self-efficacy: Conditioning the
entrepreneurial mindset. In Revisiting the Entrepreneurial Mind (pp. 293-317). Springer, Cham.
Morris, M.H. and Kuratko, D.F., 2014. Innovative pathways for university entrepreneurship in
the 21st century. Advances in the Study of Entrepreneurship, Innovation, and Economic
Growth, 24, pp.23-45.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Sydney: Pearson.
Smart, A., 2017. Transnational social networks and negotiated identities in interactions between
Hong Kong and China. In Transnationalism from below (pp. 103-129). Abingdon: Routledge.
Statista. (2018). Hong Kong: sales revenue of catering industry 2020 I Forecast. [online]
Available at https://www.statista.com/statistics/674430/hong-kong-sales-revenue-of-catering-
industry/ [Accessed 2 Jul. 2018].

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Tan, Z., Zhao, X. and Wang, W., 2017, November. Representation Learning of Large-Scale
Knowledge Graphs via Entity Feature Combinations. In Proceedings of the 2017 ACM on
Conference on Information and Knowledge Management (pp. 1777-1786). ACM.
Timmons, J.A. and Spinelli, S., 1994. New venture creation: Entrepreneurship for the 21st
century (Vol. 4). Burr Ridge, IL: Irwin.
Wisdompost. 2018. Success Story of Jack Ma. [online] Available at:
http://www.thewisdompost.com/billionaires/jack-ma/top-10-success-principles-learn-jack-ma/
1759 [Accessed 2 Jul 2018]
Zhao, Y., 2016. Entrepreneurial mindset. Education for Sustainable Happiness and Well Being,
Routledge: New York, pp.66-84.

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Appendices
Appendix 1
Timeline of Jack Ma’s life and success story

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Appendix 2
Attributes of Jack Ma
Founder: Jack Ma Yes/No The example is shown at
Start-up, Growth and
Maturity
Core attributes
Commitment and
determination
Yes Start-up, growth and maturity
Leadership Yes Start-up, growth and maturity
Opportunity obsession Yes Start-up
Tolerance risk Yes Start-up
Ambiguity and uncertainty No
Creativity Yes Growth
Self-reliance and adaptability Yes Maturity
Motivation to excel Yes Start-up, growth and maturity
Desirable attributes
Creativity and innovation Yes Growth
Intelligence Yes Start-up, growth and maturity
Capacity to inspire Yes Start-up, growth and maturity
Values Yes Growth and maturity
Energy, health and emotional
stability
Yes Growth and maturity

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