Restaurant Business Plan: Market Analysis, Strategies, and Budget

This report presents a comprehensive business plan for a new restaurant in London, targeting the student market. It begins with an introduction to the hospitality sector and emphasizes the importance of strategic planning. The report outlines the business idea, focusing on offering diverse food options, including Italian, Chinese, and Indo-Italian cuisine, along with beverages, to attract students. It identifies potential competitors and defines business objectives, such as providing innovative food products and adopting cost-effective technologies. The report includes a PESTLE analysis to assess the external factors influencing the business, covering political, economic, social, technological, and environmental aspects. It also discusses the organizational structure, specifically the choice of a sole trader ownership. The report covers marketing strategies, event launches, and a budget analysis to determine the overall profitability of the new firm. Finally, the report illustrates operational, tactical, and strategic decisions and discusses the distribution methods of the company to analyze the plan of the entity.

BUSINESS ESSENTIALS

TABLE OF CONTENTS
Introduction......................................................................................................................................1
TASK 1............................................................................................................................................1
PART A..................................................................................................................................1
PART B..................................................................................................................................3
TASK 2............................................................................................................................................4
Task 3...............................................................................................................................................6
Part A......................................................................................................................................6
Part B......................................................................................................................................7
TASK 4..........................................................................................................................................11
Task 5.............................................................................................................................................15
Task 6.............................................................................................................................................15
Conclusion.....................................................................................................................................16
REFERENCES..............................................................................................................................17

Introduction
Hospitality sector contributes well in the economic development of the country. People
like to go on restaurant and hotels to spend some time with friends and families. Business
planning is the crucial part for that management has to think logically and in structured way.
London is the potential market for opening a new restaurant business (Yaish, Peng and
Rothstein, 2014). It is necessary to plan the activities, target market and barriers effectively. By
this way any new firm can get established and can accomplish its objective. Present report is
based on the new restaurant business which is planning to open a branch in middle of the
London. Assignment will discuss the business idea of new restaurant business and it will
describe marketing strategies of the organization. In addition, it will launch the event and will
produce a budget that would help in identifying the overall profit of new firm (Yoneshiro and
et.al, 2013). Significance of operational, tactical and strategic decisions will be illustrated in this
study. At the end of the report distribution methods of the company will be discussed in order to
analyses the plan of the entity.
TASK 1
PART A
Commercial and economic activity which are done by a person or entrepreneur is
identified as a business. In the industry there are several types of businesses are established and
operated in various sectors to gain and earn sales and profit. In the current scenario a company
will be open by an entrepreneur for the purpose of provide services and products to the students.
For attracting students the best business idea will be related to the restaurant which offer several
types of food items and dishes to them (Savina and Kuzmina-Merlino 2015). Further, the idea of
restaurant will be good as well as profitable because students are always seeks towards the food
items. Along with food items new restaurant will offer beverages as well by which students will
attract more towards it.
In the current case, foods and beverage sector is selected because students are highly seek
towards the new and different kinds of food items. Apart from this, the students want various
types of beverages like as juice, shakes etc. In the food items the restaurant will offer Italian and
Chinese food items which are most liked by the students. Further, due to such reasons, the food
and beverage sector is to be selected. In context to the location, the restaurant will be established
and open nearby university. Reason for choosing the university is that students are available near
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to the educational institutes. Apart from this, students are always tried to take different types of
food items as well as beverages. In this context, the business such as restaurant will be operate
through online as well as offline. When the students are not able to come out from the lectures
and hostels then online services will be more beneficial for it. Further, for spending times at the
outside with the food then in this case offline services helps to increase sales (Uhl and Gollenia,
2016).
The students and customers are always wants to eat new and innovative food products
and when the restaurant will offer innovative dishes then it able to attract more number of
students. For increasing and meet with the wants and needs to the potential and new students the
restaurant come up with the various innovative food dishes as well as beverages. The restaurant
will offer Indo-Italian and Thai dishes such as red curry etc. along with the multi shakes and
beverages. It helps to meet various expectations and needs of the students and customers by
which it able to generate more amount of revenue and profit at the year ending. In context to this,
the new restaurant will be offer different new schemes and discounts by which it able to attract
existing and new consumers and students (Hair, 2015). In addition to this, with the help of
providing combo offer of two or more types of dishes and beverages such as coke and shakes it
able to meet with needs of the students.
Identification of competitors:
In the UK there are various number of restaurants are operating in the foods and beverage
industry which provide different food products as well as beverages. These all the restaurants are
competitor or rivalry firms of the new restaurant which will be open currently. Some competitors
are such as follows:
 Nama restaurant
 Typing Room
 Pizarro restaurant
 CoBo restaurant
 Escocesa restaurant
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PART B
The restaurant will be open near to the university in the London which has various
objectives. By using and having some purposes and objectives the entrepreneur will open new
restaurant which are given as below:
 To provide innovative food products.
 To use and adopt new and innovative technology for reducing costs
 To offer food products and beverages at the lower and affordable prices.
 To increase market share in food and beverage industry of UK.
The above mentioned objectives are interrelated because in short all helps to increase
level of profit and margin in the food and beverage industry of UK. With the help of using
effective and attractive marketing and promotional activities the restaurant will be able to attract
and enhance students and consumers which helps to increase sales and revenue. Apart from this,
when the restaurant adopt new as well as innovative techniques and technologies then able to
make effective, nutritional and hygienic food products and beverages (Wilson, 2014). Along
with this, it helps to reduce cost for producing and cooking different Italian and Chinese food
items. Due to this, it can easily offer products and beverages at the lower and affordable prices to
the potential and new students and consumers. By providing innovative food products at lower
prices compare to rivalry firms then more number of consumers will be attract. Ultimately,
market share of the restaurant will be increase in foods and beverage industry of UK.
Different form of ownership:
In the corporation world, there are various types of companies are operated and generate
income and profit which are such as sole trader, limited, partnership etc. The sole trader is the
firm in which there is only one owner who run as well as operate overall firm in the foods and
beverage industry. The firm which listed in the stock market and on which different types of
legal rules and legislations are imposes by authority body and government are known as limited
companies (Cobanoglu and et.al., 2011). Apart from this, when there are two or more
entrepreneurs establish and run business are called as partnership firm.
In the current case, restaurant will be open and establish as a sole trader company because
in this there is only one owner who have overall ownership as well as liability of the restaurant.
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When it exists in the foods and beverage industry with the sole trader types of firm then any kind
of legal terms and conditions are not imposes on it. With this, it able to run and operate overall
restaurant using its own rules and objectives without following rules of authority bodies. Hence,
in the current case, sole trader restaurant will be establish and open by the entrepreneur.
TASK 2
PESTLE analysis
The restaurant business is the most profitable business in UK. It is that place where food
is serves to people (Rachet, 2014). There are different types of business factors which mat effects
performance of the organization. To run business operations successful it is important to make
scanning its factors which may have created huge impact of the business and it operations. With
the help of the PESTLE analysis the firm can evaluation of its strategies and other factors which
may effected business and its operations. This is considered as the best strategic tool which helps
to organization for evaluating it external factors which directly or indirectly effects business
operations.
Following are PESTLE analysis of restaurant business.
Political factor
Political factor includes different types of polices which implemented by government on
business. It also includes country's political stability and their relation with other country. UK
government and its business polices have huge impact of restaurant business and it's operations.
There are different types of rules and regulation which is compulsory to follow (Mkude and
Wimmer, 2015). In order to run businesses operation successful restaurant need to maintain there
standard of cleanliness and lobar laws and along with this they need to also follow tax rules.
Government checks quality of food and ingredients which are used in preparation of food. In
many restaurants not use quality of food and people may suffer from health related problems
such as heart diseases, cholesterol and obesity problems. Organization need to maintain there
quality of food and kitchen as well.
Economical factor
It includes different types of economical factors such as economic polices, tax rate,
fluctuation in currency and impact of exchange rate. Government tax polices may effects
organization and its business. If UK government impose tax rate on the consumers items then,
restaurant also need to increase rate of their food. The change of inflation rate is also effects
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businesses as the prices of the ingredients may also increasing. Apart, from this other economic
changes may also effects restaurants such as slow economic growth and highly risky market.
Restaurant businesses is also considered as the most risky businesses as there are many factors
which may slow the growth of company. In UK, other economical factors such as low
purchasing power of consumers and low income of individual is creates huge impact of business.
Social factors
The restaurant business is considered the most highly risky business. For conducting any
business successful it is important to understand the social culture in which they are operating
their business. People are now becoming more educated and developing more healthy habits so
they can prevent from diseases. They are looking for the quality of food. In this the restaurant
need to offer healthy food items to their consumers. As increases in number of population,
number of restaurant is also increases. Now individuals becoming more aware regrading to their
food items and check their quality as well. Restaurant is offering there services to students which
like top consume more fast food. So the entity need to focus on this they have to create such
products which contain high quality at low prices along with healthy for their customers.
Technology factor
The impact of technology on business is very huge. There are different types of technology
factors such as use of internet and social media. There are various types of technological tools
which can be used by organization. In UK there are many restaurants which uses TV and It
technology for their publicity (Sicotte, Drouin and Delerue, 2012) Along with this organization
can also provide their food detail to their customers through their websites. In this organization
can also use different types of products and services for attracts more customers in its business.
For attracting college students they can also use mobile through which they can send SMS to
their customers regrading food items. Some restaurants also use automation technology in there
food chains. Restaurants can also use make delivery of products through mobile which helps to
them for increases profit.
Environmental factor
There are some ecological factors which may apply on the environment consumer food
company. The government made different types of rules and regulation on the health food and
nutritious. Restaurants need to adopt sustainable strategy to grow their business (Pagla and
Brennan, 2014) The environmental issues are now becoming growing issues it is great concern
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for atmosphere. The organization need to make sustainable contribution thorough their business.
Restaurants business should aware regrading to this business changes and adopt such strategics
which helps to them for building strong relationship with society and other people.
Legal factor
There are various type of government agencies which are working for regular supply and
quality of products. They have implemented some specific rules and regulations to control
supply of food products in market (Wilson, 2014) Restaurant need to follow this rules and
regulation so they can run their business operation smoothly. Apart, from the business have to
maintain laws related to wage and welfare to employees. Company need to create lawful
environment within organization along with this they have to maintain high quality products and
services for their customers.
Task 3
Part A
In the modern business world people are busy in their life so to get relaxed they go to
restaurant and clubs etc. In the London there are many restaurants are running and customers go
there frequently (Zhang and et.al, 2015). So opening a new restaurant is crucial for that cite d
firm will have to launch an event that can help in making people aware with the brand. New
restaurant business is having objective of increasing sales and satisfying needs of consumers. In
the launching event cited firm will circulate flyers, which have detail of food and other services.
Apart from this it will give discounts of 25% to its women customers (Buppert, 2014).
For students it will give offer of free drinks on order of over 500. this would be attractive
for all people and professional or official people will go there and many organizations will
organize in such restaurant because it would be cheaper for them. New restaurant business will
take support of social media market and it will advertise the variety of food of company on Face
book, Instagram and Twitter (Camaligan, 2016). By this way it will be able to make
communication with mass audience. It will attract many customers by this way company will be
able to accomplish its objective of increasing sales volume. In the event cited firm will give 20%
cash back offer by this way number of people will get increased. There will be package for
whole family in which sweet dish will be complementary (Epstein and et.al, 2016). Apart from
this new restaurant will organize a live event in which it will target women because ladies like to
do kitty parties so by targeting to them cited firm will be able to influence their mind and they
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will be positive towards the brand. By this way they will come here and will take the experience
of its food and services (Hassan, 2013).
Part B
Budget of restaurant business
Year 1 Year 2 Year 3
Revenue of the organization 505,600 557,419 670,350
Cost of sales of products and
services 151,192 158,752 169,335
-------------- -------------- --------------
354,408 398,667 501,015
Administrative expenditures 84,930 88,899 168,578
Selling expenses 58,200 72,360 163,934
-------------- -------------- --------------
Operating profit of
organization 211,278 237,408 168,503
Corporate tax 52,820 59,352 42,126
-------------- -------------- --------------
Net income 158,459 178,056 126,378
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Cash Flow statement of restaurant business
Year 1 Year 2 Year 3
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit before taxes 211,278 237,408 168,503
Depreciation 5,550 16,800 111,300
--------------- --------------- ---------------
216,828 254,208 279,803
Taxes paid - 52,820 59,352
--------------- --------------- ---------------
Net Cash Flows from Operating
Activities 519,250 531,406 459,601
--------------- --------------- ---------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of PPE 45,000 700,000
--------------- --------------- ---------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from share issue 10,000 - -
Dividends paid 39,615 44,514 31,594
--------------- --------------- ---------------
Net Cash Flows used in
Financing Activities 29,615 44,514 31,594
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--------------- --------------- ---------------
Net increase/ (decrease) in Cash
and cash equivalents 489,636 441,892 271,993
Cash and cash equivalents at
beginning - 489,636 931,528
--------------- --------------- ---------------
Cash and cash equivalents at end 489,636 931,528 659,535
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Balance sheet statement of restaurant business
Year 1 Year 2 Year 3
Non-current assets
Property and equipment 49,200 77,400
666,10
0
------------- ------------- -------------
Current assets
Cash and cash equivalents 489,636 931,528
659,53
5
------------- ------------- -------------
Total assets 538,836 1,008,928 1,325,635
========= ========= =========
Equity
Stated capital 107,750 107,750
107,75
0
Retained earnings 131,504 265,046
359,82
9
------------- ------------- -------------
239,254 372,796
467,57
9
------------- ------------- -------------
Non-current assets
Deferred tax 182,716 405,176
578,64
5
------------- ------------- -------------
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