GSBS6012 - Entrepreneurship & Innovation: Steakhouse Delight Report

This report provides an analysis of Steakhouse Delight, a fine dining restaurant in New South Wales, Australia, owned by the Statham Family. The current owner, Nick Statham, aims to expand the business and enhance its reputation by introducing new rules, improving service quality, and focusing on high-quality food and beverages. The report explores the restaurant's innovation through molecular gastronomy, target customer base (20-45 age group), customer value proposition emphasizing food quality over price, customer relationship strategies including health awareness campaigns, and marketing channels utilizing both traditional and modern tools. It also details the revenue streams, key resources, strategic partners, and a financial analysis including a start-up summary, profit and loss statement, break-even point, balance sheet, and cash flow statement. The analysis concludes with longer-term prospects and a summary of the restaurant's strategic approach to sustaining and expanding its business.

Running head: ENTREPRENEURSHIP
Entrepreneurship
Name of the Student
Name of the University
Author Note

1ENTREPRENEURSHIP
Table of Contents
Introduction......................................................................................................................................3
Innovation........................................................................................................................................3
Customers and markets....................................................................................................................4
Customer Value Proposition............................................................................................................4
Customer Relationship.....................................................................................................................4
Channels..........................................................................................................................................5
Revenue Stream...............................................................................................................................5
Key Resources.................................................................................................................................6
Key Activities..................................................................................................................................6
Strategic partners.............................................................................................................................6
Financial analysis.............................................................................................................................7
Start-up summary.........................................................................................................................7
Profit and Loss Statement............................................................................................................7
Break-even point..........................................................................................................................8
Balance Sheet...............................................................................................................................9
Cash Flow Statement.................................................................................................................10
Longer term prospects...................................................................................................................11
Conclusion.....................................................................................................................................11
Reference List................................................................................................................................12

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Introduction
Steakhouse Delight is one of the most reputed fine dining restaurants that is located in
New South Wales Australia and the owner of the restaurant is Statham Family. Currently Nick
Statham is running the business being the representative of the family and is aiming to build a
huge reputation of the organization in all over Australia and also aiming to expand the business
in the market of New Zealand in near future. Nick Statham gained huge popularity in the market
of New South Wales as he introduced many new rules and regulations in the business
organization to enhance the service quality and the quality of the food and the beverages served
in the restaurant. He understood the fact that being a hospitality business organization, he should
stress on the quality of the service and the quality of the food products in order to sustain the
business in a market full of rivalries.
Innovation
In order to sustain the business in the market full of uncertainties due to rapidly changing
demands of the target customers and also due to fierce rivalry in the hospitality business, Nick
Statham decided to introduce the age old restaurant as a new molecular gastronomy pub in order
to retain the popularity of the organization in the tough times. Molecular gastronomy can be
looked at as a sub-discipline of food science that focuses on the chemical and the physical
transformations of the ingredients of the food while cooking. This sometimes enhances the
nutrition of the ingredients and majorly used to make the food more presentable along with
making it more artistic and technical.

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Customers and markets
Nick Statham before renovating the family business organization studied the market of
operation and decided that for achieving success the target customer base should be of the age
group of 20 to 45 as the type of services and the décor they will be providing to the customers is
best suited for that particular age group. Currently Nick is operating in the market of New South
Wales and wants to expand the business in the whole Australian market and in the market of
New Zealand.
Customer Value Proposition
In this context, the restaurant is going to put more emphasis on the quality of foods rather
than the price. As a result of that the food prices will be much higher but the company never
wants to compromise of its quality. In this regard, the restaurant is going to provide foods with
low fat so that it will be beneficial for reducing the high risk of obesity which becomes an
epidemic in Australia (Hayes et al. 2016). Moreover, there is an array of foods which are not
only delicious but also healthy and in good quality.
Customer Relationship
The target customers for the restaurants are mainly from 20 to 45 years of age. It means
the company encapsulates adult customers who are very conscious about their health. As a
matter of fact, the company is going to organize campaigns in the local community about the
detrimental impacts of obesity and other food oriented health problems. In course of taking these
measures it will be beneficial for the company to attract more customers. Besides this, the
company is willing to change its service procedure by conducting training for the employees. In

4ENTREPRENEURSHIP
return, it will help to render good services with professional outcome on behalf of creating a
good brand image of the restaurant.
Channels
The Company intends to follow both the traditional and the modern tools of marketing
strategies. In this regard, promoting through flyers and television are considered to be the
traditional marketing mechanisms for the company. In addition to this, the restaurant also uses
social media as a guiding tool for promoting its new products. Social media like Facebook and
twitter are the principal social media that can generate more customers for the company. In
addition to this, regular campaigns on health awareness against obesity are considered to be an
effective promotional tool for the restaurant (Sulaiman 2016).
Revenue Stream
In order to entice the customers to pay the prices the company can conduct creative
servicing plans. In order to give the customers, the conception that the restaurant uses farm fresh
ingredients, many of which are grown organically, extra consumables can be added to the
catering list. Lead customers generally care for the quality of food, and not much for the service
quality (Cole 2016). It is expected that take-up rate of this business strategy will be high, owing
to the fact that they would get assurance about the product quality from this. The company can
indulge in direct physical sales. Besides, the revenue stream can be directed through online sales
with PayPal as the payment option. However, retailers and distributors can also be used for
broadening the revenue stream.

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Key Resources
The management team for this venture will be comprising of the Supply Chain manager
along with Dieticians and Nutritionists who would be involved in relating the customers with the
ways in which the venture produces value for them. The restaurant staffs involved in the project,
should be trained regarding the various gastronomical issues prevailing in the society and how
their products generates value in that context (Stewart 2016). Along with the current crew,
additional 25 staff have to be incorporated by the company. The additional employees should be
employed under the criteria that they should have knowledge in gastronomy.
Key Activities
A market trademark have to be attained for the products and services that the company
wants to endorses through this venture. This would prevent other entrants from spreading
negative vibes about the utility of the services and products (Larsenand Jacobsen 2016). The
company can generate business value through this venture, alongside making the Australian
people more conscious about consuming food in restaurant.
Strategic partners
The company will be working based on different partners so that the supply chain can be
managed in a proper manner. This will help in the efficient operation of the company as well.
The major partners of the company will be the loyal customers who will help in increasing the
sales in a better manner, as the products need to be consumed by them. The suppliers of the
company will be the markets from where the raw materials need to be procured. The company
will make sure that the raw materials are fresh so that it can be stored and used for cooking as
well. The bank will provide the initial loan to the company so that the restaurant can be opened

6ENTREPRENEURSHIP
without any hassles. The amount of the loan will be returned to the bank along with the rate of
interest within a specific period of time (Stewart 2016).
Financial analysis
Start-up summary
Summary Statement
Sources of Capital
Owners' and Other Investments
$
10,000
Bank Loans 150,000
Other Loans -
Total Source of Funds
$
160,000
Startup Expenses
Buildings and R/E
$
22,000
Leasehold Improvements -
Capital Equipment 70,000
Location / Admin Expenses 12,000
Opening Inventory 22,000
Advertising / Promo Expenses 15,000
Other Expenses -
Total Startup Expenses
$
141,000
Profit and Loss Statement
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Gross revenue $487,500 $521,625 $573,788 $631,166 $694,283
Cost of goods sold $146,250 $149,175 $155,142 $164,451 $177,607

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Gross margin $341,250 $372,450 $418,646 $466,716 $516,676
Other revenue [source] $0 $0 $0 $0 $0
Interest income $0 $0 $0 $0 $0
Total revenue $341,250 $372,450 $418,646 $466,716 $516,676
Operating expenses
Sales and marketing $15,000 $15,300 $15,912 $16,867 $18,216
Payroll and payroll taxes $0 $0 $0 $0 $0
Depreciation $18,400 $18,768 $19,136 $19,504 $19,872
Maintenance, repair, and
overhaul $0 $0 $0 $0 $0
Total operating expenses $33,400 $34,068 $35,048 $36,371 $38,088
Operating income $307,850 $338,382 $383,598 $430,345 $478,588
Interest expense on long-term
debt $5,398 $4,290 $3,138 $1,940 $694
Operating income before other items $302,452 $334,092 $380,460 $428,405 $477,895
Loss (gain) on sale of assets $0 $0 $0 $0 $0
Other unusual expenses (income) $0 $0 $0 $0 $0
Earnings before taxes $302,452 $334,092 $380,460 $428,405 $477,895
Taxes on income 30% $90,736 $100,228 $114,138 $128,522 $143,368
Net income (loss) $211,717 $233,865 $266,322 $299,884 $334,526
Cumulative income $211,717 $445,581 $711,903
$1,011,78
7 $1,346,313
Break-even point
Net income (loss)
-
$142,395
.48 $211,716.67 $233,864.50 $266,321.80 $299,883.77 $334,526.30
Cumulative income $69,321.19 $303,185.70 $569,507.50 $869,391.27
$1,203,917.
57
Positive Cash Flow? TRUE TRUE TRUE TRUE TRUE
Undiscounted break
even year 1 years
Actual break even
period 0.67 years

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The company will have break-even sales in the first year itself and precisely by the mid-
year assuming that the accounts in being done in a financial year.
Balance Sheet
Assets Initial balance Year 1 Year 2 Year 3 Year 4 Year 5
Cash and short-term
investments $19,000
$114,30
7
$212,87
2
$326,69
6
$456,11
4
$634,7
46
Accounts receivable $0 $0 $0 $0 $0 $0
Total inventory $234,000.00
$250,38
0.00
$275,41
8.00
$302,95
9.80
$333,25
5.78
$333,2
56
Prepaid expenses 0 0 0 0 0 $0
Deferred income tax 0 0 0 0 0 $0
Other current assets 0 0 0 0 0 $0
Total current assets
$253,000
$364,68
7
$488,29
0
$629,65
6
$789,37
0
$968,0
02
Buildings $22,000 $22,000 $22,000 $22,000 $22,000
$22,00
0
Land 0 0 0 0 0 0
Capital improvements
$
- 0 0 0 0 0
Machinery and equipment
$
70,000 70,000 70,000 70,000 70,000 70,000
Less: Accumulated depreciation
expense
0 18,400 37,168 56,304 75,808 95,680
Net property/equipment
$92,000 $73,600 $54,832 $35,696 $16,192
($3,680
)
Goodwill $0 $0 $0 $0 $0 $0
Deferred income tax 0 0 0 0 0 0
Long-term investments 0 0 0 0 0 0
Deposits 0 0 0 0 0 0
Other long-term assets 0 0 0 0 0 0
Total assets
$345,000
$438,28
7
$543,12
2
$665,35
2
$805,56
2
$964,3
22
Liabilities Initial balance Year 1 Year 2 Year 3 Year 4 Year 5
Accounts payable $0 $0 $0 $0 $0 $0
Accrued expenses 0 0 0 0 0 0
Notes payable/short-term debt 0 0 0 0 0 0
Capital leases 0 0 0 0 0 0
Other current liabilities 233,475 420,389 629,756 872,064
1,148,7
84
1,461,4
21
Total current liabilities
$233,475
$420,38
9
$629,75
6
$872,06
4
$1,148,
784
$1,461,
421
Long-term debt from loan
payment calculator
1
50,000
$122,30
6 $93,504 $63,550 $32,398 ($0)

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Other long-term debt $0 $0 $0 $0 $0 $0
Total debt
$383,475
$542,69
5
$723,26
0
$935,61
4
$1,181,
182
$1,461,
421
Other liabilities 0 0 0 0 0 0
Total liabilities
$383,475
$542,69
5
$723,26
0
$935,61
4
$1,181,
182
$1,461,
421
Equi
ty Initial balance Year 1 Year 2 Year 3 Year 4 Year 5
Owner's equity (common)
$
10,000 $10,000 $10,000 $10,000 $10,000
$10,00
0
Paid-in capital 0 0 0 0 0 0
Preferred equity 0 0 0 0 0 0
Retained earnings 0
0
0
0
0 0
Total equity
$10,000 $10,000 $10,000 $10,000 $10,000
$10,00
0
Total liabilities and equity
$393,475
$552,69
5
$733,26
0
$945,61
4
$1,191,
182
$1,471,
421
Cash Flow Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Operating activities
Net income
$211,71
7 $233,865 $266,322 $299,884 $334,526
$1,346,31
3
Depreciation $18,400 $18,768 $19,136 $19,504 $19,872 $95,680
Accounts receivable $0 $0 $0 $0 $0 $0
Inventories
($16,380
) ($25,038) ($27,542) ($30,296) $0 ($99,256)
Accounts payable $0 $0 $0 $0 $0 $0
Amortization 0 0 $0 $0 $0 $0
Other liabilities 0 0 $0 $0 $0 $0
Other operating cash flow
items 0 0 $0 $0 $0 $0
Total operating activities
$213,73
7 $227,595 $257,916 $289,092 $354,398
$1,342,73
7
$0
Investing activities $0
Capital expenditures $0 $0 $0 $0 $0 $0
Acquisition of business 0 0 0 0 0 $0
Sale of fixed assets
($90,736
)
($100,228
)
($114,138
)
($128,522
)
($143,368
) ($576,991)
Other investing cash flow
items 0 0 0 0 0 $0

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Total investing activities
($90,736
)
($100,228
)
($114,138
)
($128,522
)
($143,368
) ($576,991)
Financing activities
Long-term debt/financing
($27,694
) ($28,802) ($29,954) ($31,152) ($32,398) ($150,000)
Preferred stock 0 0 0 0 0 0
Total cash dividends paid 0 0 0 0 0 0
Common stock 0 0 0 0 0 0
Other financing cash flow
items 0 0 0 0 0 0
Total financing activities
($27,694
) ($28,802) ($29,954) ($31,152) ($32,398) ($150,000)
Cumulative cash flow $95,307 $98,565 $113,824 $129,418 $178,632 $615,746
Beginning cash balance $19,000 $114,307 $212,872 $326,696 $456,114
Ending cash balance
$114,30
7 $212,872 $326,696 $456,114 $634,746
Longer term prospects
The company will be trying to open their branches in different cities of Australia as well
so that the restaurant can become famous and result in a higher profit as well. This will ensure
that the company will be running for a longer period as well.
Conclusion
Therefore it can be stated that the restaurant will be running in a proper manner in the
market, as the profits of the company will be high. Since gastronomy is a newer concept in the
food business, it will help in attracting more number of customers. This will also result in
increasing the popularity of the company as well.

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Reference List
Cole, S., 2016. Can Managed Services Help Your Firm's Revenue Stream. Legal Mgmt., 35,
p.19.
Hayes, A., Chevalier, A., D'Souza, M., Baur, L., Wen, L.M. and Simpson, J., 2016. Early
childhood obesity: Association with healthcare expenditure in Australia. Obesity, 24(8), pp.1752-
1758.
Larsen, S.B. and Jacobsen, P., 2016. Revenue in reverse? An examination of reverse supply
chain enabled revenue streams. International Journal of Physical Distribution & Logistics
Management, 46(8), pp.783-804
Stewart, S., 2016. Independent School Has Everything but a Large Tuition Revenue Stream:
Waterside School, Stamford, Connecticut. Independent School, 75(4), p.n4.
Sulaiman, M.Z., 2016. Translating Australian Urban Gastronomic Experiences for Malay
Tourists. Pertanika Journal of Social Sciences & Humanities, 24.