Spicy Treat Restaurant Business Plan - Market Research, Cost and Pricing Strategy, Financial Forecasting

This business plan outlines the details of Spicy Treat Restaurant, including the owner's experience and background, product and services provided, market research, operational requirements, cost and pricing strategy, and financial forecasting. The restaurant will offer breakfast and lunch menus, with a focus on local workers and downtown traffic. The pricing strategy will focus on offering high-quality, healthy food at fair prices, with discounts for bulk orders and combo meals. Financial forecasting shows an increasing trend in sales over the first three years of operation.

Level 5 Foundation
FDA Business
Units: ENB218 – Entrepreneurship in
Business

Table of Contents
Task 1.........................................................................................................................................4
Business name and owners.....................................................................................................4
Executive summary................................................................................................................5
Owners experience and background......................................................................................6
Product and services provided by new venture......................................................................6
Market research......................................................................................................................7
Operational requirements.......................................................................................................9
Cost and pricing strategy......................................................................................................10
Financial forecasting............................................................................................................11
Contingency plan/exit strategy.............................................................................................12
References................................................................................................................................14

TASK 1
Business name and owners
As Spicy Treat restaurant is at the initial stage, it will be continued as a sole proprietorship in
which owner will be the manager of the restaurant. Further, the owner has efficient skills in
management as well as previous experience of running a small café. Further, the decision of
investment has been taken after analyzing the market conditions in detail manner. As the
owner is having previous experience of running a successful café, he is capable enough to
take an appropriate decision relating to the restaurant.

Executive summary
The main aim of Spicy Treat restaurant is to serve the customers delicious food without
making any compromise in taste as well as quality. Further, both vegetarian and non-
vegetarian variety of cuisines will be included in the menu so that maximum choices can be
provided to customers by the restaurant. The experience of the owner which has been
attained by running the previous café will be implemented while taking important decisions
so that the possibility of failure in decision making can be avoided to a major extent. In order
to finance, the commercial investment loan will be taken from the bank. Moreover, personal
investment will be made for financial assistance at the initial stage of business.

Owners experience and background
As Spicy Treat restaurant is at the initial stage, it will be continued as a sole proprietorship in
which owner will be the manager of the restaurant. As the owner has efficient skills in
management as well as previous experience of running a small café, the decision of
investments has been taken after analyzing the market conditions in detail manner. The owner
is having efficient skill in assessing the external environment as well as internal environment
so that
Product and services provided by new venture
The restaurant will provide offer breakfast along with lunch menu, fresh cold cuts, drinks and
take-out ready dishes. Further, the items which will be included are omelettes, cereal, eggs,
toast, yoghurt, coffee and as well as tea. In lunch the items which will be offered are cold cut
sandwiches that are turkey, ham, roast, beef and so on along with this salads will be offered
too such as Caesar salad, Greek salad, watercress and sesame salad, homemade potato salad,
Italian eggplant salad, Maury island cranberry arctic salad.
Menu of Restaurant
Breakfast
 Eggs, made to order.
 Toast: rye, wheat or white.
 Ham.
 Yoghurt.
 Fruit.
 Coffee and Orange Juice
Drinks
 Ocean Spray products.
 Soft drinks (Pepsi products).
 Coffee.
 Tea

Lunch
Entrees
 Turkey Sub
 Roast Chicken Club.
 Veggie Sandwich.
 Coos Bay Hot Crab Sandwiches.
 Columbia Salmon Rolls.
 Anacortes Seafood Burgers.
 Smoked Salmon Sourdough Bread.
 Washington Bruschetta Steak Sandwiches.
 Hood River Fresh Apple Cake.
 Chips.
 Homemade Organic Willamette Chili
Salads
 Watercress and Sesame Salad.
 Homemade Potato Salad.
 Italian Eggplant Salad.
 Maury Island Cranberry Arctic Salad
Market research
Marketplace: Old Street Station can be an appropriate marketplace for the Spicy Treat
Restaurant as individuals who work in the downtown area through the day or who will be
walking for walk-in good food and convenience for late breakfast and lunch. Moreover, in
this area usually, the street food is easily available thus the risk of competition is
comparatively less than other areas. If appropriate commercial accommodation is not
available, then any other main market can be searched so that more no of customers can be
influenced.

Market Segmentation: The main emphasis will be on other downtown traffic and local
workers. The reason behind focusing on them is that they usually prefer restaurant food in
comparison to other segments. Business people usually prefer a hotel rather than a restaurant
and local workers are interested in spending time in the restaurant rather than a hotel. Thus,
the targeted share has been emphasized mainly in order to attain the sustainability over a
longer period. Thus, the main emphasis will be on the choice of local worker and other down
traffic as they prefer food which is available at reasonable prices. Moreover, they are
interested in getting food packed so that they can enjoy the same at home with their family.
Thus, food delivery packages will be made available so that the quality and presence of food
is not compromised.
Market Segmentation
Local Business
Local Workers
Other downtown traffic
Figure 1: Pie chart representing market segment on which the main emphasis will be focused
Marketing Strategies: In the present online world, social media plays a significant role in
reaching to the targeted area. Thus, advertisement and promotion will be done on social sites
such as Facebook, Twitter etc. in order to attract maximum customers. Moreover, exciting
offers and a special discount will be provided at first service so that more no. of customers
get attracted. Interacting with the customer is believed as a successful marketing strategy. In
order to implement the same, a blog will be created for the restaurant. The purpose behind
making the blog is to have communicated with the customers in an effective manner (Tuten
and Solomon, 2017). The restaurant can employ a panel of content writers who can make the
blog attractive. With the help of this, the restaurant will not only draw the attention of more

customers but also it will help in enhancing the brand image of the organization. Cummings
and Angwin (2015) consider the blog as the best place where a restaurant can and share their
views with people at large scale. Moreover, it is the platform where consumers can give their
feedbacks and also it is the paramount significance for every organization to converse with
consumers.
Competitors: Competitors have to be analyzed in detail prior to establishing any type of
company or business (Medlin and Ellegaard, 2015). The company has to keep in mind
strategies of the competitors of business, in order to develop marketing strategies and for
taking other important decision relating to business. In London, there is intense of
competition. The same includes every eating establishment in the Europe/Springfield area.
Main competitors are Taco time, Taco Bell, McDonald's, Burger King, Burrito Boy, La Salsa
Taqueria, Subway Sandwiches, Cousins, Sun. Due to the immense competition, every local
competitor follows the loyal customer base (Kannan, 2017). The same will be followed by our
restaurant too by providing appropriate services and delicious food to the customers.
Operational requirements
 Tangible Requirements: As per the assertions of DiPietro and DiPietro (2017), for
running the business effectively the partners will be made, which are having adequate
funds. Moreover, appropriate commercial accommodation will be rented. The
manager will help in managing the restaurant and their knowledge as well as
experience will be beneficial for the restaurant. Apart from this in order to exercise
the activities, there is a need to employ workers who are educated and well-mannered.
Employees will be appointed after assessing each requirement in detail so that they
remain part of the restaurant for a long period. Experienced employees should be
preferred as the restaurant is new, thus experienced employees know the manner in
which they have to behave with the customers and same can be used as a base for
developing brand image of the restaurant.
 Intangible Requirements: In order to set up a restaurant computers are needed as in
present digital era, as it plays a very important role since the can be done fast through
the help of it and there are no chances of errors in work (Mullins, 2013). Further,
every worker will need its personal computer, working in the department where it is
necessary such as billing counter. Moreover to be available the mobile connectivity
for all workers will require. With the assistance of same, the services can be provided

speedily as well as information can be assessed easily, for example, tracing of the
location where the food has to be delivered (Boella, 2017).
 Legal Requirements: For launching a new restaurant in London is necessary for an
entrepreneur to register their restaurant before twenty-eight days of opening. If an
entrepreneur not registers its restaurant then it will be considered as an offence
according to the Article 6(2) of Regulation (EC) 852/2004 on the hygiene of
foodstuffs. Further, in case, it requires a license for operating restaurant than same
will also be attained before initiating business.
Cost and pricing strategy
The main objective of Spicy Treat restaurant is offering high quality as well as healthy food
which is fast in cooking and has exclusive fair pricing. Due to the same, the entrepreneur
will be anticipating of charging more for the items in comparison to other stores on condition
that the consumers understand that the food when is provided is better than average. Further,
in order to satisfy the customers, the discount will be given on bulk order, family meals and
combo provides in order to retain the average costing to sustain competition with famous
brands. In order to be competitive the quality of food will never be compromised, customer
will be provided the food with high quality and healthy. Moreover, it the more emphasis will
be done on satisfaction of customers there feedbacks will be taken and try to remove the
grievance if any. Reviews will be taken from customers in order to ascertain the extent to
which they are satisfied and details about future requirements. At initial stage restaurant will
require to compromise with profit to a small extent so that it can attain the sustainability.
However, once the restaurant has developed its brand image it will be able to enhance the
rate. As consumers will be sure about the concern of restaurant towards health of its
customers, they will be loyal to the restaurant.
Financial forecasting
Figures of income, cash flow statement and balance sheet has been determined by
considering London market and competitors values and invested amount. Further, growth %
is applied by considering performance of new restaurants in the nearby market. Further, with
the quality services business will be able to maintain the growth.
Table 1: Projected Income Statement
Projected income statement

For the initial three years
0th Year 1st year 2nd year 3rd year
Total inflow £ 1,91,236.40 £ 2,10,360.00 £ 2,29,483.00
Fixed cost £ 39,000.00 £ 1,91,975.00 £ 1,96,769.00 £ 1,98,607.00
Variable cost £ 14,023.95 £ 4,000.74 £ 13,413.62
Depreciation £ 2,700.00 £ 2,700.00 £ 2,700.00
Total cost £ 39,000.00 £ 2,08,698.95 £ 2,03,469.74 £ 2,14,720.62
Profit -£ 17,462.55 £ 6,890.26 £ 14,762.38
Taxes £ 5,238.76 £ 4,713.47 £ 4,428.92
Net profits -£ 12,223.79 £ 2,176.79 £ 10,333.46
The above statement depicts increasing trend in sales of Spicy Treat Restaurant. It is expected
that existing trends and preference of customer have been considered by the restaurant. Thus,
same will have positive impact on sales of restaurant. Profit has been earned in second year
and moreover increasing sales trend signifies bright future of the restaurant.
Table 2: Projected cash flow statement
Projected Cash flow statement
For the initial three years
0th Year 1st year 2nd year 3rd year
Total inflow 191236.4 210360 229483
Fixed cost £ 39,000.00 £ 191,975.00 £ 196,769.00 £ 198,607.00
Variable cost £ 14,023.95 £ 4,000.74 £ 13,413.62
Depreciation £ 2,700.00 £ 2,700.00 £ 2,700.00
Total cost £ 39,000.00 £ 208,698.95 £ 203,469.74 £ 214,720.62
Profit -£ 17,462.55 £ 6,890.26 £ 14,762.38
Taxes £ 5,238.76 £ 4,713.47 £ 4,428.92
Net profits -£ 12,223.78 £ 2,176.79 £ 10,334.15
Add: Depreciation £ 2,700.00 £ 2,700.00 £ 2,700.00
Cash flow at end -£ 39,000.00 -£ 9,523.78 £ 4,876.79 £ 13,034.15

Table 3: Projected Balance Sheet
Projected Balance sheet
For the initial three years
Assets 1st year 2nd year 3rd year
Current and non -current assets
Cash £ 4,876.79 £ 13,034.15
Inventory £ 15,000.00 £ 20,000.00 £ 30,000.00
Plant and Equipment £ 17,300.00 £ 14,600.00 £ 11,900.00
Furniture £ 9,200.00 £ 9,200.00
Total Assets £ 32,300.00 £ 48,676.79 £ 64,134.15
[42]
Liabilities and equity
Bank overdraft £ 9,523.78
Trade payables £ 5,000.00 £ 16,500.00 £ 23,800.00
Total Liabilities £ 14,523.78 £ 16,500.00 £ 23,800.00
Amount invested £ 30,000.00 £ 30,000.00 £ 30,000.00
Profit -£ 12,223.78 £ 2,176.79 £ 10,334.15
Total Equity £ 17,776.22 £ 32,176.79 £ 40,334.15
Total liability and equity £ 32,300.00 £ 48,676.79 £ 64,134.15
Statement of affairs represents that in initial year the restaurant is not having sufficient cash.
However, the situation has been improved in future years. Further, with an increase in sales
have also affected trade payables and receivables, i.e. same have been enhanced. Above
statement represent that in initial year the restaurant does not have sufficient cash. However,
in upcoming years as the company is operating with efficiency, it is able to manage its fund
in an appropriate manner and is also having liquidity in order to meet its day to day
expenditure. Profit has been assessed in year two, which represent that the food of the
restaurant is liked by the customers.
Source of financing for business is done from owner investment and bank loan. For business,
loans are very famous and common method of debt finance. Generally, businesses take loans
from commercial lenders like as banks by retaining some security against the loan. Taking
loans from commercial lender or banks are for a fixed span of time is convenient but
businesses have to pay interest on the loan. Loans are in the form of the short, medium or

long term; it depends on the economic requirement of business. Total required amount of
finance is GBP30000.
Contingency plan/exit strategy
 Short Term: As the restaurant is rented than in case a circumstance does not remain
in favour of business than the owner can shut down through vacating the office
through accomplishing legal requirements.
 Long Term: In long-term restaurant can be sold to existing competitor and in order to
attain maximum value financial and legal transparency should be proven so that
potential buyer can have ease in ascertaining appropriate purchase value.

REFERENCES
Boella, M. J. 2017. Human resource management in the hotel and catering industry. Taylor
& Francis.
Cummings, S. & Angwin, D., 2015. Strategy builder: How to create and communicate more effective
strategies. John Wiley & Sons.
DiPietro, R., & DiPietro, R. 2017. Restaurant and foodservice research: A critical reflection
behind and an optimistic look ahead. International Journal of Contemporary Hospitality
Management, 29(4), 1203-1234.
Kannan, P.K., 2017. Digital marketing: A framework, review and research agenda. International
Journal of Research in Marketing, 34(1), pp.22-45.
Medlin, C. J., & Ellegaard, C. 2015. Conceptualizing competition and rivalry in a networking
business market. Industrial Marketing Management, 51, 131-140.
Mullins, J. 2013. The New Business Road Test: What entrepreneurs and executives should do
before launching a lean start-up. Pearson UK.
Tuten, T.L. & Solomon, M.R., 2017. Social media marketing. Sage.