Financial Decision Making for Creative Projects and Events Report

This report provides a comprehensive overview of financial decision-making for a proposed quick-service restaurant (QSR) in Carlingford, New South Wales. It begins with an introduction to the food and beverage industry, specifically focusing on quick service restaurants, and highlights the advantages of this business model. The report analyzes the current state of the industry and the potential for a QSR in the selected suburban area. It then delves into menu selection, emphasizing healthy and natural food options tailored to the local market. A detailed financial analysis is presented, including a proposed budget with startup and operating costs, as well as cost allocation ratios. The report concludes with a discussion of supplier requirements and the importance of effective supplier management. The report references relevant literature to support its analysis and recommendations, offering valuable insights for business development and financial planning in the food and beverage sector.

1
By student name
Professor
University
Date: 26 November 2017.
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Contents
Overview of the Project.....……………………….………....……..……………………………………….3
Analysis.………………….…………..………………....……..………………………………………………..…..4
Selection of the menu…..………………....……..……………………………………………………….…..5
Financial Analysis.…….…………..………………....……..…………………………………………………….6
Supplier Required…….…………..………………....……..……………………………………………………..7
References………..…….…………..………………....……..……………………………………………………..8
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Overview of the Project
The food and beverage industry is one of the most prominent and fastly growing in
today’s world. Out of the many variations that this industry offers one of the most sought after is
the quick service restaurants that offer finger foods and snacks items. These are easy on the
pocket and people can consume the same on a go without having to spend much time. This is one
of the biggest advantageous that quick service restaurants offers that they are easy on pocket and
very consumer centric. There is no need to spend a large amount of money on creating great
ambience for the customers and they can operate from small kiosks (Harrington, Ottenbacher, &
Fauser, 2017). One such quick service restaurant is to be opened in the suburbs of Sydney, which
is the biggest city of Australia. The name of the suburban area is Carlingford, New South Wales.
It is a small area that is situated 22 kilometers from north western end of Sydney. The area is a
developing one and there are not much outlets that offers such quick food services. It will be
ideal to open such outlet in that part of the country. Thus briefly following points can be
highlighted from the introduction-
• The name of the operation will be quick food services restaurant in Carlingford.
• The location will be Carlingford, New South Wales.
• The major competition will include the few dine out restaurants that are there in that
region, also it has a huge plantation of fruits and is often known as the orchard city in that regard.
• The target market for the QSR will be students, college going people, office people.
Basically the company will target those groups that don’t have much time to spend in restaurants
and also wants good quality affordable food at easy availability.
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• The service style as mentioned through will be of a quick service restaurant that will offer
finger food, snacks and other delicacies at very nominal rates.
Analysis
The present state of the food and beverage industry is in alignment with the selected style
of service. People all around the world are looking for healthy hygienic food at affordable prices.
Dinning out is a thing that all people cannot afford, moreover they don’t have that much time
that they can wait and eat at a restaurant. Nowadays it is more of a luxury and less of a need.
When people have lot of free time, and they want to enjoy some good food and are ready to
spend some good money on the same, the go for dine out. Thus the need and the demand for
quick service restaurants have improved over the years, and that is very much apparent from the
high rate at which it is growing in today’s world. Most of the top countries now boast of a huge
percentage of their revenues from these quick service restaurants and there are many startups that
are operating in alignment with the same. So if the company goes forward with this proposed
idea of opening a quick service restaurant in a growing suburban area then that will be very
profitable for the same. The company will be to en-cash on the growing demand for tasty quick
bites at cheaper prices. They are similar to brands like MacDonald’s and dominos but will serve
comparatively more healthy food (Visinescu, Jones, & Sidorova, 2017).
Selection of the menu
The menu will be proposed based on the analysis done and on the basis of the target
market that has been selected. As it has been stated that Carlingford is a growing area, and there
are huge plantations of fruits and vegetables so people over there prefers to have their natural
healthy stuff and if the company is able to twist the same and present the same in a different
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form , then that will attract a lot of people. The main item thus on the menu can be fruit salad
combos that will consists of different fruits that have been garnished with special sauces. Other
items will all be based on fruits like fruit tarts, fruit cakes, fruit juices and also the company can
incorporate vegetable salads, vegetable chats etc. In beverages there can be fruits drinks at cheap
prices and natural ice creams can also be served. Overall the menu will cover the healthier option
of food that people can avail easily and for which they do not have to struggle too much. The rate
can be kept minimum and the plus point is that the company can procure these raw materials for
the food items from the local markets at very low prices (Elimam, 2017). There has been many
factors that has influenced the development of this menu, the main being the lack of good quick
service restaurants in the area, the growing demand for healthy food options as people have
become very health conscious and also the availability of natural products in that area. People in
this suburban area are very much habituated to have these natural products in their raw form, so
if the company is able to add some variations to it and provide them with new food items
incorporating these natural products, it will attract a lot of people. Also the fact that there was no
such quick service restaurant previously played an important role for the company (Laursen &
Thorlund, 2016). It is very much based on providing healthier option of authentic food items at
cheaper prices using the most readily available resources in the area. These are the few factors
have played an important role in influencing the overall menu. And depending on the initial sales
and response of the people the company can keep the menu changing and can incorporate new
items in the same. In this way people will not get bored of the same and this will be helpful for
the business also.
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Analysis of the proposed financials for the project:
The company needs to propose a particular financial plan for the project, so that it is able
to analyze how and when it can invest and what are the areas that might need special attention. It
helps in defining a proper path for the company as per which it should spend its money and
achieve maximum amount of revenue. An extract of the proposed budget for the given project is
given below:
$
Start up cost 100000
Operating costs: 60000
food costs 25000
beverage costs 15000
wage costs 20000
Proposed Annual Budget
In this budget it is proposed that the initial start up cost of the project is $100000, and then the
other operating costs that are incurred throughout are divided into three segments: Food costs,
beverage costs and wages cost. It is proposed that the ratio is calculated on the basis of the total
operating cost that is incurred in the initial year (Laursen & Thorlund, 2016). The maintained
ratio is 5:3:2. The cost of the food items is the maximum because it takes more raw materials to
get all the ingredients and food menu is comparatively high. The beverage menu is a little less in
comparison to the food menu and will incorporate lesser amount of raw materials. Also the cost
of wages will be high, because the company will require the same to prepare the food; staff will
be needed to maintain the desired level of cleanliness and also to serve the food item at the
kiosks. So keeping the start up cost different, all the other costs will be treated as operating costs
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and decisions will be taken accordingly. The prices for the products will be fixed in an order so
that break even is achieved and also in the initial few months the total amount of sales can be
anticipated so that a bench mark can be identified. The company will also spend some money on
advertising and promotion but that must be considered as a part of the initial start up cost, and
once the company break even the same can be equally deferred throughout the coming years
(Alexander, 2016).
Supplier Required
The main supplier that is required in this project is the supplier of the raw material for
preparation of the food and beverages. Other suppliers that would be required will be the one that
helps in formation of the kiosks and all supply some other products like furniture and utensils
that is needed. But most of these will be one time investment, the major cost will be of the
supplier of the food ingredients and the company should make sure that they are able to avail the
same at some discount (Bromwich & Scapens, 2016). Effective supplier management services
can help the company in reducing the total amount of cost that might be incurred. The company
must do a proper market research and then should select those suppliers that provides discount
on bulk orders. For one time investments the company can go for lease products that are very
easy on the pockets and can be used for a longer period. In this way the company will be able to
reduce the total cost effectively and break even early (Mayntz, 2017). The company can also hire
experts that can help them in doing such market research and help them procure data about the
various suppliers in the area.
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References
Alexander, F. (2016). The Changing Face of Accountability. The Journal of Higher Education, 71(4), 411-
431.
Bromwich, M., & Scapens, R. (2016). Management Accounting Research: 25 years on. Management
Accounting Research, 31, 1-9.
Elimam, H. (2017). The Role of Small Businesses (Small Scale Economic Projects) in Alleviating the Acuity
of Unemployment. International Business Research, 10(3).
Harrington, R., Ottenbacher, M., & Fauser, S. (2017). QSR brand value: Marketing mix dimensions among
McDonald’s, KFC, Burger King, Subway and Starbucks. International Journal of Contemporary
Hospitality Management, 29(1), 551-570.
Kohtamäki, M. (2017). Real-time Strategy and Business Intelligence: Digitizing Practices and Systems.
Finland: Palgrave Macmillan.
Laursen, G., & Thorlund, J. (2016). Business Analytics for Managers: Taking Business Intelligence Beyond
Reporting (Second ed.). CANADA: Wiley Publisher.
Mayntz, R. (2017). Networked Governance. Springer.
Visinescu, L., Jones, M., & Sidorova, A. (2017). Improving Decision Quality: The Role of Business
Intelligence. Journal of Computer Information Systems, 57(1), 58-66.
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