Al Habibi Shisha House: Detailed Business Plan for Entrepreneurship

The provided document presents a detailed business plan for Al Habibi Shisha House, a new hookah lounge concept targeting Middle Eastern and local London residents aged 20-45. The plan includes an executive summary outlining the company introduction, market opportunity, customer problem identification, proposed solution, product/service description, business model, marketing, sales strategy, competitive analysis, and operational considerations. The plan focuses on providing an authentic Arabic-themed hookah experience, offering flavored tobaccos, non-alcoholic beverages, and appetizers. The financial plan details financial needs, sales forecasts, salary structures, income statements, and cash flow statements. The business aims to capitalize on the growing hookah market in the UK, particularly the lack of Arabic-cultured lounges in Central London, by offering a unique ambiance and diverse menu. The plan also includes market segmentation, identifying target customers and addressing their needs. The financial projections assume a 20% annual sales increase, projecting profitability after the first year of operation. The plan also details operational aspects, including location, staffing, and marketing strategies.

ENTREPRENEURSHIP BUSINESS PLAN:
AL HABIBI SHISHA HOUSE

TABLE OF CONTENTS
PART 1: EXECUTIVE SUMMARY..............................................................................................1
Company Introduction.................................................................................................................1
Market Opportunity.....................................................................................................................1
Identification & evidence of the customer problem(s)................................................................2
Solution........................................................................................................................................2
Product and/or Service description..............................................................................................3
Business model............................................................................................................................4
Marketing.....................................................................................................................................5
Sales strategy...............................................................................................................................6
Competition.................................................................................................................................6
Operations....................................................................................................................................6
Financial requirements & forecasts.............................................................................................7
PART 2: FINANCIAL PLAN.........................................................................................................8
Financial needs............................................................................................................................8
REFERENCES..............................................................................................................................10
APPENDIX....................................................................................................................................11
Sales Forecast............................................................................................................................11
Salary Structure.........................................................................................................................11
Income statement.......................................................................................................................11
Cash flow statement...................................................................................................................12

LIST OF FIGURES
Figure 1: Ambiance and offerings at Al Habibi..............................................................................3
Figure 2: Google Maps....................................................................................................................6
LIST OF TABLES
Table 1: Sales Forecast..................................................................................................................11
Table 2: Salary Structure...............................................................................................................11
Table 3: Income Statement...........................................................................................................11
Table 4: Cash Flow Statement.......................................................................................................12

PART 1: EXECUTIVE SUMMARY
Al Habibi Shisha House is a new Hookah bar concept in the Central London which
mainly focuses on Middle East people and other local people of London of the age group of 20 to
45. The main purpose of opening this venture is to provide an Arabic Theme Hookah Parlour to
the society of London where people can enjoy the Middle Eastern culture (Meyer, 2014).
Further, business will generate revenue through the sale of flavoured tobaccos, non-alcoholic
drinks and appetizers. Owners of business will focus on both internal and external sources for
raising the funds.
Company Introduction
Al Habibi Shisha House is a new concept for hookah lounge in the Central London.
Owners of the company are expecting to enter into market within 6 months so that they can serve
youth with vibrant environment as well as new and attractive flavours of hookah. Looking at the
idea of business, owners are expecting to generate revenues through sale of hookah, drinks
(coffee, tea and juices) and food which consist of Middle Eastern and British Cuisine snacks and
appetizers requiring light preparation. Furthermore, customer expected by the owners will be
Middle Eastern people and local British people of the age of 20 to 45.
Mission:
The main purpose of owners of AL Habibi Shisha House is to provide leisure of services,
attractive hookah flavours, quality of food and drinks products. Further, the environment of
overall shisha house will consist of the combination of Middle Eastern and British culture.
Objectives:
 To provide quality of Hookah, food and drinks (Non-Alcoholic).
 To offer wide range of Hookah flavours to the wide expectations of the consumers.
 To become profitable in its second year through different modes of revenues.
Market Opportunity
Looking at the present market of hookah bars in UK, it has grown in significant manner
in the recent past. There are wide ranges of hookah parlours in different parts of the country that
are offering wide range of products and services with unique ideas. The market opportunity
available for owners is that there are very few Arabic cultured hookah bars in Central London
which is one of the major opportunities in terms of initiating and establishing new hookah
parlour venture in the target market. Furthermore, Shisha bars have risen from 179 in 2007 to
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556 in the year 2012 and it is the major opportunity available for the successful run of hookah
parlour (Kennedy, 2006).
Market Segmentation:
For the Al Habibi Shisha Parlour, market segmentation is determined on the basis of
potential customers which are as bifurcated:
 Middle Eastern British’s: These are the people who have migrated from Middle East or
having their family background from Middle East. However, the main purpose of
targeting these people is because, they value the connection that hookah bars provide
with their culture and traditional elements (Finch, 2013).
 College Age Inhabitants: In general, college students always seek an alternative to party
for different experiences. Thus, Al Habibi Shisha Parlour will provide good ambience,
joyful atmosphere and quality of food and drink commodities at affordable prices so that
they can they can easily attract the consumer.
 Young professionals: London is considered as the corporate hub, thus there are several
young professionals that can be good customer base for the owners to target. These
professional looks for the place where they can meet with colleagues talk and share
experience.
Identification & evidence of the customer problem(s)
Looking at the present modern era, every individual is making efforts to earn better and
live leisure life. Thus, considering this point, eating outside, enjoying with friends and spending
time is the major part of leisure life for the people (Hidukeand Ryan, 2013). In this regard, there
are several restaurants and parlours that are available in different location of London. The major
problem identified by the owners of Al Habibi Shisha parlour is that none of the other hookah
bars in London offers actual Middle Eastern feel and atmosphere.
Solution
Thus, opening of AL Habibi Shisha Parlour will enhance knowledge of local residents
about the actual Arabic culture and will attract them to enjoy the high quality of Shisha in the
Central London. Therefore, it is one of the major market opportunity available to the
entrepreneurs through the means of which they can easily establish their new venture and attract
large number of audience for generating high revenues. Along with this, providing exotic
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environment and creative ambiance for different drinks from both Middle Eastern and British
culture will provide better answers for the different expectations of the target audience.
Product and/or Service description
Al Habibi Shisha House will be specializing in different segments such as non-alcoholic,
organic drinks as well as hygienic and healthy appetizers and snacks by including taste of both
Middle Eastern and British Origin.
Figure 1: Ambiance and offerings at Al Habibi
(Source: Anderson and Khedair, 2009)
The menu will be bifurcated in two different segments which are as follows:
DRINKS
Organic teas
Organic coffees
Fresh juices
Mock tails
APPETIZERS
French Fires
Onion Rings
Burgers
Pizza’s
MIDDLE EASTERN APPETIZERS
Hummus
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Falafel
Umm Ali
HOOKAHFLAVOURS
Cherry Lebanese Blend Orange
Strawberry Pistachio Peach
Blackberry Lemon Vanilla
Mixed Fruit Cola Mango
Business model
Key Business Drivers
Core
Customers
Superior Value Proposition Channels Key
Activities
Value Chain Based
Resources
Competition/Competitive
Strategy
Relationship and
Network Alliances
Business
Structure
Costs and Cost Budget Revenue Streams & Cash flow
 Business Drivers: In general, business drivers are considered as group of stakeholders
which are associated with the entrepreneur to initiate the new venture. However, Al
Habibi Shisha Parlour is initiated under the sole proprietorship. Herein, owner is
responsible for taking all the decisions regarding functioning of the business. Along with
this, he/she will be responsible for handling liabilities and responsibilities of raising funds
and executing the activities (Myers, 2013). Along with this, professional Middle Eastern
and British Cuisine chef, service staff members.
 Key activities: The main purpose of this venture is to provide leisure and relaxing
environment to the targeted audience where they can enjoy the Arabic hookah flavours of
Middle East and eat quality of food and drinks of mixed cuisines.
 Value proposition: The Shisha House is of young people wherein they will get better
environment for spending time with their friends, colleagues and family. Furthermore, in
order to create value, owner of Al Habibi will ensure quality of each and every aspect
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such as food and drink hygiene, better environment for hookah and authentic Middle East
ambiance for the new experience of the people.
 Customer relationship: In order to develop and maintain customer relationship different
offers and combo packs will be provided. Along with this, on festive themes and other
special occasion the customers will be given suitable discounts (Business Model
Generation, 2014).
 Key Resources: Location, infrastructure and manpower are the major resources for the Al
Habibi Shisha House. Central London is feasible as the place consist of population from
different ethnic backgrounds so that hookah bar can easily target people and create
demand for its services.
 Channels: Different effective modes of marketing will be considered to promote and
market the offerings of AL Habibi so that awareness can be created at the large level.
Along with the, social media marketing will be used to promote the shisha house at large
level.
Marketing
 Product: Al Habibi Shisha House will deal in two different segments: food and drinks
and flavoured hookah.
 Price: In order to establish business in such a competitive market, owner of Al Habibi
hookah parlour can use penetration pricing strategy in which he/she can charge low at
the initial stage of the shisha house and after establishing itself in the market owner can
change the pricing strategy (Hidukeand Ryan, 2013).
 Place: Central London has been selected for the opening of new Hookah venture.
Rationale behind this is that, owner can acquire place for rent easily in the location as
well as he/she can target large number of people as segmented above in the segmentation
criteria at Central London.
 Promotion: Social media and traditional methods will be included in the promotional
strategy so that large number of audience can be reached as well as population can be
aware about the new hookah parlour in town.
Sales strategy
Owner of Al Habibi Shisha House will sell the products through the means of attentive
wait staff and bar counter staff members. Along with this, wait staff will make the use of
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wireless tablets to take the order which will be directly linked to the bar staff so that order can be
placed in the kitchen efficiently (Meyer, 2014). The main aim of doing this is that, help in
enhancing the customer service and convert potential customers into sales.
Competition
There is very high competition available for the owner of Al Habibi as there are various
hookah bars already existing in London and providing quality of services to its customers.
 Beirut Nights: It is rates as the 5 star shisha lounge.It offers authentic Lebanese cuisines
and with the most cutting edge shisha technology.
 The Banc: It offers good variety of food and shisha flavours. It offers the combination of
football and hookah at the same time (Finch, 2013).
 Zeyra lounge: It is located in Woodford and is an elegant lounge that offers premium
Shisha and services.
Operations
Location:
Figure 2: Google Maps
(Source: Google Maps, 2015)
Location of the lounge has been selected as the Central London because it is the place
wherethe market segmentation criteria of owner will be fulfilled in effective and efficient
manner.
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Personnel requirement:
Staff members Quantity
Lounge General Manager 1
Chef 2
Wait staff 4
Kitchen staff 2
Financial requirements & forecasts
The start-up capital for initiating new Hookah venture is £125000. However, in order to
raise this amount, owner of the lounge has indulged both internal and external sources of finance.
In this regard, £50000 owner’s capital and £75000 has been raised through bank loan at three
years repayment terms at 7.63% rate of interest. The main purpose of using both these method is
that, owner’s capital will not raise the liability as it is a sole proprietor business, owner has to
invest in. while on the other hand, repayment of bank loan is based on monthly instalment of
interest which is feasible for the individual as it will not increase great amount of liability. Along
with this, the total costs of pre-operating year is estimated at £130000 thus, business will start its
new year with negative opening balance of -£5000. But with increasing demand, Al Habibi
Shisha House will generate profit after the functioning one year as its sales will attain the growth
of 20% every year.
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PART 2: FINANCIAL PLAN
In general financial projections are based on different scenario as well as on the present
condition of the industry in which entrepreneur wants to enter. Herein, sole proprietor is planning
to enter into hospitality industry by opening a new hookah lounge at Central London. Thus,
financial plan consist of income, cash flow, balance sheet and breakeven point.
Assumption:
 Increased sales by 20% per annum.
 Lounge will work for 25 day in a month.
 Monthly rent is fixed for two years at 5% of total revenue.
 Service fee for the use of lounge system is 5%.
 COGS assumed at 25%.
 Legal and permit fee £20000.
 Salary increment 10% per annum.
 Utilities increased by 10% per annum.
 Stationary increased by 20% per annum.
 Miscellaneous expenditure assumed to be decreased by 5%.
 Promotional and marketing expenditure for initial year is considered to be high. Thus, it
increases with 10% after every year.
 Bank loan of 75000 at three years instalments will be taken at 7.63% rate of interest
according to corporate loan rate of financial institutions.
 5% of cash sales will be deducted as the tax payment every year.
 Depreciation on fixed assets of £28000 at 10% with straight line method is £2800.
Financial needs
Sources of finance:
There are several sources of financeavailable to the entrepreneur in order to carry out the
activities of new venture. According to the requirements of new venture, owners capital, bank
loan, angel investors etc. however, these are some of the sources available to the owner of Al
Habibi Shisha House to raise the funds. Being the owner it is the duty of individual to invest in
the functioning and get the activities started. While, bank loan is considered as the most reliable
source of finance for small scale businesses as it can be raised at affordable rate of interest and
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repayment of borrowing is also based on monthly instalments. Lastly, owner can influence its
family members to invest in the business.
Appropriate source of finance for the firm:
The best suitable source of fund available for owner of Al Habibi Shisha House is
owner’s capital and bank loan.Considering the restaurant industry it is feasible for the owner to
take corporate loan at feasible interest rates. While looking at the size of venture which is small
sized lounge as well as the growth plans, owner’s capital and bank loan is considered as the most
feasible sources of finance.
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REFERENCES
Books and journal
Anderson, M. and Khedair, J., 2009. Successful Business Plans: Get Brilliant Results Fast.
Crimson Publishing, Limited.
Business Model Generation, 2014. [Online]. Available through:
<http://businessmodelgeneration.com/toolbox> [Accessed on 22nd December 2015].
Finch, B., 2013. How to Write a Business Plan. 4th ed. Kogan Page Publishers.
Hiduke, G. and Ryan, J., 2013. Small Business: An Entrepreneur's Business Plan. 3rd ed.
Cengage Learning.
Kennedy, S. D., 2006. The Ultimate Marketing Plan: Find Your Hook. Communicate Your
Message. Make Your Mark. Adams Media.
Meyer, M., 2014. The Business Model Canvas Playbook: Design and Advance Your Personal
Business Model on 100 Blank Canvases to Evolve Your Lean Start-up Into a Successful
Company. Create space Independent Pub.
Myers, M. D., 2013. Qualitative research in business and management. Sage.
Online
Google Maps, 2015. [Online]. Available through: <https://www.google.co.in/search?
q=uk+food&oq=uk+food+&aqs=chrome..69i57.2455j0j7&sourceid=chrome&es_sm=93&
ie=UTF8#q=hookah+bars+in+London&rflfq=1&tbm=lcl&tbs=lf:1,lf_ui:1&oll=51.498948
158774475,0.0972082999999202&ospn=0.29024303092064811,0.81024169921875&oz=
11&fll=51.51753873427261,0.08090046918937777&fspn=0.2901249055714601,0.81024
169921875&fz=11&qop=&rlfi=hd:;si:>. [Accessed on 22nd December 2015].
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APPENDIX
Sales Forecast
Table 1: Sales Forecast
Sales Forecast Year 1 Year 2
Average customers per day 50 60
Average spending 20 20
Working days in a month 25 25
Sales 300000 360000
Salary Structure
Table 2: Salary Structure
Salary structure Quantity Amount/ Month (£) Annual Salary (£)
Lounge General Manager 1 1500 18000
Chef 2 1100 26400
Wait staff 4 800 38400
Kitchen staff 2 500 12000
Total 94800
Income statement
Table 3: Income Statement
Income statement Year 1 Year 2
Particulars
Revenue
Sales from Products and services 300000 360000
Less: COGS (15%) 45000 54000
Gross Profit 255000 306000
Operating Expenses
Market Research 5000
Utilities (Electricity/water/telephone) 20000 22000
Stationary 5000 6000
Promotion and advertisement 16500 18150
Working Capital 20000 0
Rent on premises 15000 18000
Insurance 25000 0
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Salary 94800 104280
Miscellaneous Expenses 10000 9500
Depreciation 2800 2800
Less: Total operating expenses 214100 180730
Operating Profit 40900 125270
Less: Interest 5722.5 5722.5
PBT 35177.5 119547.5
Less: Tax 15000 18000
Net Profit 20177.5 101547.5
Cash flow statement
Table 4: Cash Flow Statement
Cash flow statement Pre-Operating year (£) Year 1 (£) Year 2 (£)
Opening Balance -5000 112977.5
Cash Sales 300000 360000
Owner's capital 50000
Bank Loan 75000
Total Cash Inflow 125000 295000 472977.5
Cash Outflow
Fixed Assets 28000
Market Research 5000
Utilities (Electricity/water/telephone) 20000 22000
Legal help and permits 20000
Stationary 2000 5000 6000
Promotion and advertisement 15000 16500 18150
Working Capital 20000
Rent on premises 15000 18000
Interest 5722.5 5722.5
Insurance 25000
Tax 15000 18000
Salary 94800 104280
Miscellaneous Expenses 15000 10000 9500
Loan Repayment 50000 25000
Total Cash Outflow 130000 182022.5 201652.5
Closing Balance -5000 112977.5 271325
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