Icy Eating Place: Business Plan and Financial Feasibility Report

This report provides a detailed business plan for the Icy Eating Place, a proposed restaurant in London with a unique waterfall theme. The plan includes an executive summary, a description of the restaurant's concept, products and services, target market, and special attributes. It also assesses the industry, market, and organizational aspects using tools like Porter's Five Forces and SWOT analysis. Furthermore, the report presents a financial feasibility study with projected revenue, cost of goods sold, expenses, and profitability from 2016 to 2020. The business canvas model and risk management strategies are also discussed to ensure the successful operation of the business. The report concludes with references to support the analysis and findings.

Management Skills
and Entrepreneurship
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Executive Summary
Starting a new business is the most effective idea which require active attention of buyers
and other related parties. The major idea behind operating a business is related to accessing cost
effective sources of finance and its direct relevance with operation of the same. Present business
idea is based upon opening new restaurant with theme of waterfall concept. It will offer variety
of products and it will be considered as multi-cuisine restaurant. Furthermore, financial
feasibility has been assessed by preparing income statements. In the same manner, other tools to
assess performance of company are also applied through which marketing situation can be
known. It would be effective to ensure successful operation of business with increased rate of
return. It can be suggested to business to ensure consistent innovation and creation in the existing
products and services. This proves to be effective to create competitive edge in the marketplace.
In addition to this company can focus upon retaining buyers by focusing upon strategies to
reduce potential risk.
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Icy Eating Place concept..............................................................................................................4
Assessment of industry, market and organization.......................................................................6
Financial feasibility......................................................................................................................8
Business Canvas Model...............................................................................................................9
Managing potential risks............................................................................................................12
REFERENCES..............................................................................................................................15
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INTRODUCTION
Entrepreneurship is the most important aspect under which people focuses upon starting
their Icy Eating Place in order to cater need of different types of buyers. It assists company to
approach potential buyers and accordingly expand the business activities effectively. The present
business report is based on opening new restaurant in London which will offer variety of
products and services to large number of buyers. This new concept business idea is related to
waterfall restaurant which provides unique experience to consumers. However, the main focus
on restaurant will be on ambiance and variety of food for cater need of visitors. In addition to
this, key components of concept statements covering product & services and target market and
value as well as scale of newly proposed business. In addition to this, potential risk arrived n the
business will also be explained along with financial feasibility.
MAIN BODY
Icy Eating Place concept
The concepts of Icy Eating Place consists of following aspects. These are explained as
follows-
Products and services
It can be stated that at present the competition among businesses operating in hospitality
industry has become very intense. This means it is no longer for companies to gain higher
market share and attract customers easily. One needs to focus upon products, services and make
them effective in order to gain competitive advantage over other market players. In terms of new
services offered, it can be stated that the proposed business will be offering food and drinks to
customers. Furthermore, intense market research will be carried out at regular intervals in order
to make modifications in products/services on the basis of changing customer needs. Here, the
innovation in product is that the restaurant will be entirely based on a theme selected which is
waterfall theme. Here, people will be allowed to sit in floating water and have their respective
meals in the same. However, product will include variety dishes such as Chinese, English and
Indian as well as Italian food. It would be effective for corporation to deliver good quality of
services to large number of buyers. It enables new business to increase attention of local
residents and offer them good in relatively less prices.
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Target market
Target market can be defined as the group of people from overall population which has
been specially targeted by companies for their products and services. In the modern era,
selection of right target market is very essential for companies as it helps in carrying out more
effective marketing and business practices. Here, the target market for the proposed business is
going to be people which belong to middle and higher income group. Along with this,
individuals which fall under age group of 20- 35 years will be mainly targeted. In addition to
this, three segments such as couple, family and professionals is made. This would be effective
for business to prepare market plan in the same manner and accomplish long as well as short
term objectives. The rationale behind selecting the above mentioned target market is that it will
help in achieving adequate sales and profits as mostly youngsters lies in this age group. The
creativity and innovation in new services introduced by proposed business will help in attracting
people from this age group and will also results in getting competitive over other market players
operating in south London.
Special attributes
In simper terms, special attributes can be defined as the characteristic of a particular
product or service which makes them different from other products which are available in the
market place. Here, the waterfall theme adopted by the proposed business will be considered as
special attributes that will support in attracting more and more customer. However, it can be
argued that the product and services will not remain fixed to the above mentioned concept and
changes will be carried out in them at regular intervals. This will support in creating sense of
satisfaction among customers and will also play a very important role in long term success of
the proposed business enterprise.
Apart from this, the services delivered can be also considered as special attributes as
customers will be delivered with food and drink under floating water. The concept is little bit
risky but will be successful as intense research has been carried out and it has been introduced
after the same only. In addition to this, water will be flowing from the bottom of chairs and
tables. It will give natural feeling to buyers through which they can take frequent buying
decision. Therefore, special attributes related to availability of variety of dishes and waterfall is
going to give amazing feeling among customers.
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Value and scale of the newly proposed business
The newly proposed business will be operated at small scale as sole trader. The value of
of business is proposal to offer variety of dishes for potential buyers along with special concept.
This theme would create amazing feeling among consumers and sense of satisfaction will be
seen among then. It reflects that corporation to represent unique identify in the marketplace with
increased rate of return (Bryman and Bell, 2015).
Location
The location of restaurant will be in London where large number of visitors come to visit
the attractive destination. In this regard selection location is Mandrin Oriented Hyde Park,
London has been selected. It would be effective to cater need of potential buyers and provide
amazing environment. However, there are number of restaurant in selected location but Icy
Eating will not face any kind of competition. In fact it will be easier for company to approach
buyers. Therefore, selection location is appropriate in attracting more and more buyers and
meeting expectations of customers. Thus, selected location will be effective to meet demand of
demand of customers and long as well as short term objectives of the business.
Assessment of industry, market and organization
There are different types of model used for analysis of business under which management
can easily carry out analysis of market, industry as well as organization. In this regard, restaurant
will follow effective aspect to deliver good quality of services to large number of buyers.
Following tools are applied to conduct in-depth analysis of business.
Porter's five force
It is the most important aspect to conduct analysis of overall industry under which
company focuses upon conducting detail analysis. It covers following detail aspects- Threat of new entrants-It is the most important aspect which must be assessed by
business in order to assess the impact on current business. However, threat of new
entrants is higher for restaurant sector because of higher growth and changing demand of
buyers. It can be critically evaluated threat of new entrants will not be high as
competitors will not be able to copy the concept easily (Collis and Hussey, 2013). Owing
to this, proposed business can easily create its unique identity in the marketplace.
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 Threat of substitutes-Threat of substitutes is higher in the restaurant sector of UK.
However, proposed restaurant is being opened with new concept where it becomes
impossible for business competitors to copy the themes. It would be effective for
proposed business to cater need of personnel and provide them good quality of services
so as to meet their expectation in an effectual manner (Pub-and-restaurants-groups-see-
sales-growth-slowing-down, 2016). Bargaining power of suppliers-The establishment of waterfall restaurant generate need
of high investment in pumping and other sector through which they can easily enhance
overall rate of return. Owing to this, it becomes crucial to contact suppliers to heavy
investment in pumping and other waterfall facilities. Therefore, bargaining power of
suppliers will be higher which in turn proposed business may need to pay higher amount. Bargaining power of buyers-Under this Icy Eating Place will have value proposition
because no any waterfall restaurant is operating in London. It would be effective for
customers to access good quality of service. Though, bargaining power of buyers will not
be considered as they do not have any other operation to switch upon. Industry rivalry-The current situation reflects that at present business will not have any
kind of competition in the marketplace because there is not any waterfall restaurant in
London. Owing to this, as per the current scenario business will be leading in the
marketplace and charge higher prices from customers to enhance its overall rate of return.
Market analysis
Market analysis can be done with the help pf collection of primary information from
customers for the new concept of restaurant. In this regard, views and suggestions provided by
the customers can be applied in the study so as ensure long run survival of business with
increased rate of return. The recent trend of restaurant reflects that value will be reached to 52
billion pound till 2017 (Value of restaurant market to reach 52 billion by 2017, 2016). It can be
critically evaluated that pubs and bars are not performing good in comparison to restaurant. It
depicts that during 2015 sales of restaurants went to 4.9% high. It depicts that selected business
will grow in the market with higher demand and greater scope.
Organizational analysis
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In order to conduct organizational analysis, Icy Eating Place will conduct SWOT
analysis. This aids to assess internal environment of business an accordingly formulate
appropriate strategies. It has been done as follows-
Strength
The concept of Icy Eating Place is related to
opening restaurant in London with waterfall.
It would give great experience to consumers
and promote sales turnover.
Weaknesses
The major weakness of firm is related to
higher cost of production this is because
natural theme has been incorporated in
order to influence buyers.
Opportunities
The proposed business is being launched
with new concept as waterfall. It facilitates
to increase customer base and accordingly
business has opportunity to create its unique
identity and increase overall rate of return.
Threats
Competitors in future can copy this themes
by adopting or learning ideas of the
existing one.
It will affect customer base and
profitability of the business
Financial feasibility
Financial feasibility of company has been done as follows-
Particular 2016 2017 2018 2019 2020
Revenue 298616 477785 783567 1332064 2331113
Less: Cost of goods sold 103271 36123 59242 100711 176244
Gross profit 195344 441662 724326 1231354 2154869
Expenses
Marketing expenses 1200 2167 3554 6043 10575
Administration expenses 6000 10837 17772 30213 52873
Finance cost 3000 5418 8886 15107 26437
Insurance 2400 4335 7109 12085 21149
Rent 1800 3251 5332 9064 15862
Salary and wages 240000 276000 317400 365010 419762
Depreciation 10000 18061 29621 50355 88122
Other operating expenses 12000 71668 117535 199810 349667
Sum of expenses 276400 391738 507210 687687 984446
PBIT -81056 49924 217116 543667 1170423
Tax 0 9985 43423 108733 234085
Net profit -81056 39939 173693 434933 936338
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The aforementioned report reflects that sales turnover of business will be drastically in
each year. This is because of new concept and its direct impact on increasing buyers. However,
in the second year business will have good growth because customers will be aware of products
and services. It proves to be effective to recover cost of production and meet expectations of all
related parties. However, in the first year loss worth 81056 was charged from the firm which was
then increasing in each year.
Assumptions
 The sales revenue of company will be increased by .7 in second year and then it will be
increased by .5% in each year.
 The rent of premises will be increased by 5% in every year
 Tax rate is assumed to be 30%
 Depreciation on fixed assets will be charged on the basis of 10% per annum
 Insurance of business will be 24000 per annum
Business Canvas Model
Business Canvas model is considered as the most important aspect to prepare overall
business plan in an effectual manner. This model consists of several aspects such as key partners,
key activities and value proposition as well as customer relationships. Along with that, customer
segments, key resources and channels, revenue streams and cost structure are also included in the
same (Osterwalder and Pigneur, 2010). This model will be applied in Icy Eating Place for the
purpose of prepare appropriate aspect of cost and related activities. This has been explained as
follows- Key partners-There are different key partners who will support business to move head. It
consists of logistic companies, suppliers and media. For example, Tesco, Sainsbury will
be contracted to get raw material like vegetable, dry spices and milk as well as butter.
These stock will be purchased in bulk. On the other hand, some local farmers will also be
contacted to supply milk, coffee and vegetables. In addition to this, company will contact
to media for advertising its products and services in the marketplace. In this regard,
online mode and print media will be accessed. The reason behind selecting retail store is
easy availability of raw material and relatively less time is taken to access good quality of
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sources of funds. It enables business to approach right source and ensure better quality of
food products. In this regard, suppliers will be contacted on the basis of long term
contract so that firm can effectively ensure production of good quality of dishes. Key activities-There are different types of key activities will be involved in the current
business through which customers will be attracted and sales turnover of the business will
also be enhanced. It reflects that cultural activities and production aspect will be covered.
For example, different types of dishes will be produced along with other activities like
playing music and serving as well as providing training to staff. Furthermore, production
activities is considered as the most important aspect with assurance of appropriate flow of
water in restaurant (Shah, 2012). Though, personnel will be appointed to check the flow
of water and its appropriate temperature. However, music will be selected in accordance
with preferences of buyers. This proves to be effective to persuade more buyers and
ensure good return for new eating house. In addition to this, personnel engaged with
production, cleaning will go through training program as per the suggestions of
management. Not only this, but current practices will also be improved by taking into
account suggestions and views of consumers. Value proposition-It is the most important activity of business under which Icy Eating
Place's value proposition is making available different type of dishes. Furthermore, it will
be ensured that temperature of water is set according to the weather condition. Moreover,
furniture will be set near to waterfall so as to give natural feelings to customers and
influence them to take purchase decision. However, focus will be laid on set the furniture
near waterfall. It would be effective in meeting their expectations in an effectual manner.
In addition to this, different type of meals influencing Chinese, Indian, Italian and
English food will be offered so as to attract more visitors or local residents. Apart from
this, drink services are also offered whereby respective buyers can have their perfect meal
with great ambiance. Apart from this, water will be floated from the surface of floor that
gives amazing feeling to consumers. It enables them to be ready to pay higher prices for
the services taken. Customer relationship-This is the most important aspect under which business focuses
upon building customer relationship by taking feedback from. However, waitress will opt
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very positive attitude and accordingly customers will be served. Moreover, online
contacts will be established with buyers so newsletter and other important information
can be sent to them. It can be critically evaluated that current strategies of business to
focus more upon social media marketing. This would be effective in approaching more
and more buyers in relatively less time span. For this purpose, it becomes easy for
business to easily increase sales turnover and deliver good quality of services to buyers.
In addition to this, internet based marketing proves to be effective for Icy Eating food to
create competitive edge in the marketplace. Apart from this, by using social media
customers will be asked to provide their reviews on services and products offered by
firm. However, any kind of negative comment and personal advise of customers will also
be entertained initially through which company can modify its current business activities
accordingly (Trompenaars and Hampden-Turner, 2011). Customer segments-It is another important aspect of Canvas model which reflect that
how customers are divided. Here, Icy Eating place segregate buyers in three segments;
couple, family and professional. This would be effective for Icy Eating place to approach
buyers effectively and provide them services accordingly. Here, couple will be provided
facility to book or reserve their table at first whereas same kind of facilities will be
availed for two other segments. Owing to this, romantic dinner can be organized by
availing different facilities such as candle light dinner an other related activities. Apart
from this, professional will be provided peaceful environment where any small meeting
can be organized as per the demanded facilities. It enables firm to focus upon
requirement of respective customer segment and accordingly generate higher revenue. In
addition to this, all customers segments will be promoted through different kind of
marketing techniques via social media. This in turn customers can be retained for longer
time span and important information can be provided to them. Key resources-Under this, key resources consists of physical, human financial resources.
In this regard, chef and waitress and other key personnel involved in cleaning services
will also be included. It would be effective to render good quality of services to large
number of buyers. On the other hand, other resources like raw material, drink etc will
also be needed to ensure smooth flow of production in the marketplace. However, cost
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effective sources of finance are accessed in order to reduce cost of production. It can be
critically evaluated that along with cost time taken to acquire fund will also be
considered. It assists business to start operation on right time and offer available product
and services to target market. On the other hand, skilled and competent personnel will be
hired. It facilitates to boost sales turnover at very beginning of the business. It can be
critically evaluated that poor skilled personnel will create issue for the business to
achieve desired objectives as they need training at first and then they can work as per the
demand of business (Zikmund and et.al., 2013). Channels-It is considered as mode of communication which play important role in
contacting buyers and providing them good quality of services. Here, different channels
such social media and newspaper will be involved. This aspect make it possible to
contact potential buyers and influence their purchase decision to purchase good quality of
products and services. Cost structure-Cost structure is the most important aspect which consists of different
activities such as advertising, investment in fixed assets and market research. These key
activities related to different aspects will be considered for making cost structure. It
enables company to cater need of management because appropriate margin can be set on
products and services. However, legal and registration charges will also be included
through which it becomes possible to set cost of each business activity in an effectual
manner.
 Revenue streams-The revenue stream will be focused as per different segments. For
example, professionals will be charged little different from those of families and couple.
This will be effective for corporation to increase overall rate of return and accordingly set
price of food and services. This proves to be effective to cover cost of production and
cater need of different parties associated with business.
Managing potential risks
There are different types of risk occurred in the market which must be resolved by
business with adopting appropriate strategies. It assists management to ensure successful
operation of business without ill impact on profitability and overall rate of return. These risks are
explained as follows-
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