Entrepreneurial Challenges: Indian Restaurants in the UK Case Study

This assignment is a comprehensive case study examining the challenges encountered by an entrepreneur in establishing a new Indian restaurant in the UK. The study delves into various critical aspects, including the impact of rising labor costs and shortages of skilled labor on profitability, the influence of customer awareness and preferences, and the effects of economic factors on the restaurant's performance. The research employs a quantitative methodology to gather data and analyze findings, aiming to identify the key obstacles and propose effective strategies for overcoming them. The case study covers the background of the research, the aim and objectives, the rationale and significance of the study, and the structure of the research. It includes an extensive literature review, a detailed description of the research methodology, presentation of findings, a thorough discussion of the results, and concludes with recommendations for addressing the identified challenges. The study's findings and recommendations are valuable for entrepreneurs looking to navigate the complexities of the UK restaurant market and enhance their chances of success.

CHALLENGES FACED BY AN
ENTREPRENEUR ON OPENING A NEW
INDIAN RESTAURANTS IN UK – A CASE
STUDY OF BUSINESS
PLAN AND MARKETING CHALLENGING

Acknowledgement
On the very outset of this dissertation, I would like to extend my sincere and heartfelt obligation
towards all the personage who have helped me in this endeavour. Without their active guidance,
help and cooperation, I would not have made headway in this project.
I would like to express my special thanks to my Principal who give me a golden opportunity to
do this wonderful project and then I would like to thank my teacher for their guidance and
encouragement to accomplish the dissertation in well manner.
I am extremely thankful and pay my gratitude to my mentor for their valuable guidance and
support for completion of this project. Lastly, I also acknowledge with a deep sense of reverence,
my gratitude towards my parents and members of my family, who has always supported me
morally as well as economically.
At last but not least, gratitude goes to all of my friends who directly and indirectly helped me to
complete this project.
Thanking you.

Executive summary
Tourism industry is one of the most fastest growing industry in UK and by introducing
new restaurant with innovative concept is also helpful for the business to attract wide range of
tourist towards it. In the same way, current report also highlights the new concept of restaurant
which helps the draw attention of many customers towards it. Such that the entire report is based
upon to introduce new Indian restaurant in UK and describe the key challenges faced by an
entrepreneur while implementing the same. Therefore, the current dissertation describe the
impact of elevation in labour cost and shortage of labour skills on profit in restaurant business
and impact that consciousness of customers has on profit of Indian restaurants. Further, study
also investigate impact of economic factors on Indian restaurants in UK. Moreover, this is
supported by using appropriate research methodologies and for this research, researcher uses
quantitative research methods that will help to determine the exact results so that it will assist to
attain the defined aim and objectives. Lastly, researcher provide effective ways through which an
entrepreneur may easily overcome the challenges faced while implementing the new Indian
restaurant in UK market.

TABLE OF CONTENTS
Acknowledgement...........................................................................................................................2
Executive summary..........................................................................................................................3
INTRODUCTION...........................................................................................................................1
Background of research ..............................................................................................................1
Aim and objective.......................................................................................................................2
Rationale of study.......................................................................................................................2
Significances of research ............................................................................................................3
Structure of research ..................................................................................................................3
CHAPTER 2: Literature review.......................................................................................................5
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................13
CHAPTER 3: FINDINGS............................................................................................................24
CHAPTER 4: DISCUSSION.........................................................................................................48
CHAPTER 5: CONCLUSION AND RECOMMENDATION.....................................................50
REFERENCE.................................................................................................................................54

INTRODUCTION
Background of research
Tourism is the one of the fastest growing industry in UK and with increase in its growth
rate other industry also grow like hospitality and restaurant business. In past couple of years
restaurants number increase at fast rate in UK specially in London. Interesting fact is that in
London multiple nations people live that have different taste. Hence, there are multiple cuisine
medium and small size restaurants in capital of the UK. Chinese, Indian and Mexican cuisine are
common in the UK. In the present research work an attempt is made to find out factors that
create problem for an individual to open and operate Indian cuisine restaurant in the UK. Apart
from this, attempt is made to investigate factors that make marketing of restaurant very
challenging in the UK (Jogaratnam, 2017). It is observed that UK import most of vegetables. In
other words, it can be said that mentioned nation produce less quantity of vegetables and import
more to fulfil its needs. Thus, currency exchange rate heavily affects import of vegetables.
However, UK import most of vegetables from EU nations but there are few one that it imports
from other countries of the world. Important point to note is that in upcoming time period UK
will exit from EU and in that case import cost of vegetable will increase. Thus, maintaining cost
of purchase is one of big challenge for restaurant owner. Other main challenge is to retain
customers because now a day’s customers become more sensitive and aware and rationally make
decisions. They read reviews, on basis of past experience take decisions and heavily visit varied
FB pages and view advertisements (Ramanathan, Di and Ramanathan, 2016).
As per the secondary research, it is analysed that the Indian restaurant industry is worth
Rs 75000 crores and it is further growing at the rate of 7% annually. Further, introducing Indian
restaurant in UK will help the customers to understand each other tradition. Therefore, it is
clearly analysed that there is a rapidly increase in the restaurant industry at 16 percent which
further helps to increase the economy of the country as well. Moreover, the concept of
developing new Indian restaurant is quite good because the industry is growing and that is why,
investing in this will help to generate better income source for an entrepreneur as well.
Therefore, in order to invest in to opening a new restaurant will help the business to raise its
brand image and though there are different challenges which will be faced by an entrepreneur but
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offering good quality of food and services will help the business to attract wide range of
customers.
All these things heavily affect customers decisions and such kind of thing make
marketing very tough task for a restaurant owner. Present study aims to identify impact of these
factors on business. Apart from all these factors availability of skilled labour and its acquisition
cost is also high. As less number of people have speciality in Indian cuisine and cost charged by
them is also high. Thus, these factors overall have huge impact on restaurant profitability on
initial days of inception.
Aim and objective
Aim: To identify challenges associated with opening of Indian restaurant in UK.
Objectives
 To identify impact of elevation in labour cost and shortage of labour skills on profit in
restaurant business.
 To find out impact that consciousness of customers has on profit of Indian restaurants.
 To investigate impact of economic factors on Indian restaurants in UK. To recommend strategies which can be adopted to troubleshoot problem.
Research question
 What is the impact of elevation in labour cost and labour skills on profit in restaurant
business?
 What is the impact that consciousness of customers has on profit of Indian restaurants?
 What is the impact of economic factors on Indian restaurants in UK?
Rationale of study
While conducting any research study it is very important to ensure that it is addressing any
specific problem of the general public. It was necessary to conduct research work on restaurant
business because now a day’s number of restaurants are increasing in UK at rapid rate especially
Indian restaurants. Opening of restaurant require huge capital and efforts to establish its name
among people. To ensure that business will operate smoothly in its initial days it is necessary to
have information about factors that impede growth of Indian restaurants in the UK. After
identification of factors strategies can be formulated to solve the problem. In the present study
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same thing will be done so that people may find it easy to some extent to operate their restaurant
business in its initial days. Thus, present research study will assist people to solve problems that
faced while operating restaurant business. It can be said that existence of problems makes it
inevitable to conduct present research study.
Significances of research
There is huge significance of the present research study. As it is one of the well-known fact
that while opening and operating restaurant business one face a number of problems. It become
hard for one to fight with multiple problems in single time period. In the present research study
focus is on multiple factors that have impact on the restaurant business. On basis of analysis of
these factors at granular level recommendations will be prepared which can be used by those
operating restaurant businesses. This make current research study relevant for the audience and
lead to huge significance of research study for them.
In addition to this, through the research, researcher also determine different factor which
affect the system when developing new business in the Indian Market such that shortage of
labour, price fluctuation, economic factor, legal factor etc. therefore, there is a need to have a
proper planning while developing new restaurant so that it will not affect the overall system in
negative way.
Structure of research Introduction: In this section brief introduction of the present research work is given. This
section is divided in multiple sub sections like background, aims and objectives, research
questions, significance of research and rationale of study. Thus, it can be said that on
viewing this section one can easily estimate direction in which research work will be
gone. Literature review: In this section varied authors literature will be reviewed and whatever
they state will be discussed in detail. In respect to particular issue comments that are
made by the authors in support and against will be discussed in detail. Further, in this
section critically analysis is also done which helps to determine the views of different
authors so that the aim and objectives are attain in specific manner. In this way entire
section will be done.
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 Research methodology: It is another important section of the research study and under
this way in which research will be carried out is determined. There are number of areas
that will be covered in the report like research design and for that researcher opt
descriptive research design, research type i.e. quantitative and research philosophy in
which researcher opt Interpretivism research philosophy. Based on all these factors final
outline of research study is determining which need to be followed to conduct entire
research. In the research methodology section sources from which data will be gathered is
also specified in detail. Basically, in dissertation both primary and secondary research is
conducted and due to this reason both names are specified under data collection section in
dissertation research methodology section . Lastly, thematic data analysis is done in
which researcher presents graphs, pie charts to look its more presentable and
understandable. Results: In this section of the report entire results that are generated are arranged in a
systematic way. In case SPSS is used for data analysis purpose then in that case its output
is placed in the results section and if thematic analysis is done then in that case response
given by the respondents on Likert scale is shown in table or chart form. After placing
charts their interpretation is also done to find out current trends in respect to the research
area. Discussion: In this section of the report obtained results are discussed in detail. In this
part of the report results obtained through SPSS or thematic analysis are discussed along
with literature review results. Thus, it can be said that overall current results obtained are
compared with past literature to obtain overall overview of the research subject. Conclusion: In this section of the report overall conclusion is prepared based on entire
discussion of results obtained and literature review details. Thus, it can be said that it is
very important part of the research study because it indicates overall direction of the
research subject.
 Recommendation: Finally, on basis of conclusion and discussion section
recommendation section is prepared and under this on basis of identification of areas
where work need to be done solutions are proposed by following which problem can be
solved.
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CHAPTER 2: Literature review
Literature review is the scholarly paper which mainly includes the existing knowledge as
well as theoretical and methodological contribution for the specific topic. Therefore, it is he
secondary sources and it do not report the new and original experimental work. Through this,
researcher generate views of the different author so that it will help to reach exact results and
also attain defined aim and objectives as well.
Theme 1: impact of elevation in labour cost and shortage of labour skills on profit in
restaurant business.
According to Ahmad, (2015) labour cost has huge impact on overall business cost. As per
estimation in most of business firm’s employee cost cover 30% of overall cost. Thus, this reflect
that it is very important for the business firms to maintain stiff control on direct expenses. If
employee cost is in control and more work is obtained from them then in that it is assumed that
human resources are best utilized for benefit of the business firm. On other hand, if labour cost is
high and some part remain idle then in that case it can be said that human resources are not
utilized in best way in the business. In the restaurant business labour play a very crucial role in
the business success. It is the labour that prepare excellent quality of food in the restaurant and
play vital role in customer satisfaction and its retention. Thus, restaurants have to pay higher
amount to the labours so that they can be retained in the business. Many time restaurants have
more chef but less number of customers are received then in that case cost burden increase on the
company. Thus, one of the main challenge in opening and operating Indian restaurant is to access
exact number of labour that must be in the business so that cost remain in control at the
workplace.
As per views of Krzikallová, (2016) labour cost must not be assumed as problem by the
restaurants. If any restaurant management think that more number of labours are there in the
business then it must consider them as asset not a burden on the firm. Manager of the restaurant
must focus on developing skills of labour whether they are chef or any other employee. If all
employees will be trained in their field then in that case they will be able to deliver better quality
of service to the customers. All these things will lead to better retention of customers in the
business. Moreover, if service quality is good then in that case restaurant will be able to easily
create new customers in the business. Thus, it is true that labour cost is high in the restaurant
business but at same time manager must treat these employees as one of the most important
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resource so that in better way their utilization can be done for business growth. Manager of
restaurant can contact with the training institute and can forward its employees in these training
institutes so that they can acquire skills to prepare wide variety of food whether they are Indian,
Chinese and Mexican etc. On single platform wide variety in respect to single cuisine or multiple
cuisine can be offered to the customers. In this every higher cost is paid to the employees much
higher return can be gained from them.
According to Lee, Hallak and Sardeshmukh, (2016) investment must be made on the
human resources because they are the growth engines of the business firm. More any company
have intellectual property it can compete with its rivals. It is innovation that become possible in
any company because of availability of sufficient intellectual property. Facts revealed that in the
past couple of years those firms that have higher number of intellectual capital grow at rapid
pace. Example are IBM, Infosys, Dell and analytics firms. So, even cost of employees or HR
expense is high in the business firm must not care about it. Instead training sessions must be
conducted so that new opportunity for better use of employees in the business can be identified.
In addition to this, Panigrahi (2019) stated that there are various reason of labour shortage
such that geographical shortage, which is the area within a booming economy. Such that in the
world, there are many countries who have a strong employment while, in India there is also a
strong employment demand but it also suffer from high rent cost and as a result, it leads to cause
the labour shortage. On the other side, the high skilled jobs and the occupation which is also
require the particular skills and qualification and it have a limited pool of workers who may
easily apply. Further, in India, there are some unattractive jobs in the service sector which are
hard to fill such that non- monetary cost and negative social perception about the job and as a
result, it also affect the overall industry in opposite way. Further, in the develop economy with
such a high expectation, farmers are also struggling in order to ill the low paid jobs which are
further undesirables.
Therefore, author stated that due to basic economic response to a labour shortage for the
firms in order to increase the pay so that different workers may easily attract. It is stated that sue
to high wages offering, the labour are easily attracted and as a result, the shortage may be
decreased and it helps the restaurant to make it more attract in front of customers. Thus, in order
to open a new restaurant of Indian market in UK, it is quite tough for the business to analyse the
number of labour so that it will help to lead a business towards positive way. On the other side,
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Houghtaling and et.al., (2018) stated that in restaurant, it is not easy for the manger to recruit the
best candidate for the company and also make decision fro the selection of a candidates.
Therefore, it is essential for the business to hire those employees who are able to perform the
work without any loopholes.
Theme 2: impact that consciousness of customers has on profit of Indian restaurants.
As per the view of Baktash and Talib (2019) Indian restaurant are mainly famous for its
ethnicity and they always measure the customer satisfaction so that it will not creates any
negative impact upon the profit margin of the restaurants. As customers needs and behaviour
changes and as a result, their state of mind also affect the overall market of the restaurant in
opposite way. While introducing any new Indian restaurant, it is quite essential for the business
to figure out the customer needs and their behaviour which is later helps to the manager of
restaurant to make it possible for the customer's expectation which should be fulfilled. Therefore,
this attitude is also helps the business to reach towards the success. It is also analysed that the
more customer's needs and expectations are nurtured, the more restaurant are going to be
successful in the near future. Therefore, if the customers are satisfied, then it will automatically
increases the restaurant's profit and though there are different kinds of customers who will come
to restaurant with the need of just having the mean and they will never come again. Thus, the
manager or an entrepreneur should have an ability to analyse their needs.
In addition to this, Gainsbury, Abarbanel and Blaszczynski (2019) stated that there are
customer who also come regularly and have expectations or concern about the quality of
products and services which they consume and experience. Therefore, they are the most
concerning clients who are actually fundamental influence in the terms of restaurant's success.
There is a correlation between the consciousness of customers and profitability such that it is
analysed that loyal customer has a great impact upon the higher sales and profit and it is true that
loyalty comes when the customers are satisfied with the offered products and services.
Moreover, author also stated that restaurant business has a huge impact upon the profitability
when it provides better customer satisfaction. Such that Kuhzady and Ghasemi (2019) stated
that when the new restaurant is open, make sure that the customer are satisfied and as a result, if
they are satisfied, then the profitability of the restaurant is automatically increases. Even several
studies shows that there is a need to keep retention of the customers such that every customer
have their own choice of shop, products and they always remain loyal towards it.
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On the other side, Hamukwala and et.al., (2019) stated that the mindset of customers are
influence by many ways such that marketing campaigns which plays a crucial role. If the new
restaurant is opens in Indian market then make sure that proper advertisement, should be there
which will creates positive impact upon the business. Proper promotion and advertisement plays
a greater role in influencing the purchasing decision that is made by consumer and if the
marketing campaign are done on regular basis which can influence the consumer purchasing
decision in such a wide extent then it will involve many customers to enjoy the services offered
by the restaurant as well.
Beside this, through an advertisement which may also help in influencing these factors up
to some extent, the purchase made by the consumer is also influence up to some end. Panigrahi
(2019) stated that cultural factor is also consider as a consciousness of customers. As India is
well known for its culture and culture is consider as a powerful and dominant determinant of
personal needs and wants, author also state that people also react as per the culture they belongs.
As every culture has their own values, customs, tradition and beliefs which affect the overall
environment of a restaurant. Further, every nation has its own unique culture which also shapes
and control the behaviour such that Indian culture is actually known for its tradition, values and
beliefs. That is why, if the restaurant presents all the culture in its working area, then it will
definitely influence the customers opinions and as a result, it will help the business by generating
best results that improve the financial services of the company.
Every person have their own needs and wants, therefore, it is necessary for the
entrepreneur to consider all the factors which includes age and stage in life cycle, occupation and
different economic circumstances. When opening a new restaurant, it is quite essential for the
business to keep meet the customer needs and wants such that people with same culture, social
class and occupations may differ in their life style. That is why, knowledge of life style of the
target market is also essential for the marketer in order to design better marketing program. This
also helps the restaurants to generate better leads for their future by improving the financial
performance. Further, the purchasing power of the customers Is also influenced by the several
psychological factors and the dominants among them is also includes the motivation, perception
and learning or beliefs. That is why, it is essential for the business to measure the impact of
psychological factor and they need to understand the probable role in order to make buying
decision better.
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