Feasibility Study: Starting an Indian Curry House in Birmingham

This feasibility study outlines a business plan for an Indian Curry House in Birmingham, UK. It covers the business idea, marketing strategies, pricing and funding, and financial projections. The marketing plan includes online and offline promotion, targeting South Indian, North Indian, and Bengali cuisines. The financial section details investment costs, income statements, cash flow projections, and a balance sheet. The study highlights growth potential, the increasing demand for Indian cuisine, and the need for chefs from India. The conclusion emphasizes the higher demand for Indian cuisine and the need for detailed risk assessments. The study aims to provide a comprehensive analysis of the restaurant's viability, including key assumptions and deliverables, along with a call for primary data collection on customer preferences to optimize the menu.

FEASIBILITY STUDY: STARTING A
NEW INDIAN REATURANT
INDIAN CURRY HOUSE

Members of the group

Business idea
• Indian Curry House
• introduced in Birmingham, Alabama near the
Barclaycard arena
• owner needs to have significant experience on
a Indian restaurant
• business will be a sole trader
• serve the typical Indian foods

Marketing plan
• South Indian foods, north Indian cuisines, Bengali
dishes and traditional tastes
• Location of the restaurant is at the Barclaycard
Arena
• Promotion would follow both the online and
offline mode
• Introduce the restaurant through hoarding initially
• Email marketing, social media marketing and
mobile marketing would be potential

Pricing and funding strategy
• competitive pricing would be more potential
• value for money against the investments from
customers
• offer the Indian cuisines at comparatively
lower price
• significant external sources to acquire the
fund for initial investment
• loan is most convenient option of funding

Pricing and funding
strategy
• The total
investment in the
new venture of
opening a new
Indian restaurant
chain is £287620
Particulars Amount (in £)
Legal 5000
Office supplies 5000
Insurance 2000
Land and building 75000
Security deposit 15000
Furniture and fixture 38000
Bathroom 14600
Mechanical 5890
Plumbing cost 12000
Floor and wall décor 22000
Electrical equipments 15640
Food licensing 30000
Kitchen equipments 35480
Music and screens 4550
Cleaning 1500
Promotional cost 5960
Total 287620

Financial report
• Income statement
Particulars Year 1 Year 2 Year 3
Amount
(GBP)
Amount
(GBP)
Amount
(GBP)
1. Selling price per dish 7 9 10
Costs relating to the service
Variable costs
Direct materials per dish 3 3.15 3.31
Direct labour per dish 2 2.1 2.21
Variable production overhead 2 2.2 2.42
2. Total variable cost per unit 7 7.45 7.9325
3. Contribution (1-2) 0 1.55 2.0675
4. P/V ratio 0% 17% 21%
5. Number of dishes served 30000 33000 36300
6. Total contribution (3*4) 0 51150 75050.25
Fixed manufacturing costs
Production overhead 2000 2000 2000
Administration and office cost 700 700 700
7. Total fixed manufacturing overhead 2700 2700 2700
8. Fixed selling overhead
9. Total fixed costs (7+8) 2700 2700 2700
Profit / (Loss) -2700 48450 72350
Profit Margin -1.29% 16.31% 19.93%

Financial report
• Cash flow statement
Projected cash flow statement
Parrticulars Year 1 Year 2 Year 3
Amount
(GBP)
Amount
(GBP)
Amount
(GBP)
Cash flow from operating activity
Operating profit -2700 48450 72350
Add. Non cash and non operating expenses
Depreciation 1000 1000 1000
Amortisation 1000 1000 1000
Loss on sale of assets 500 600 700.00
Adjustment for changes in working capitral 22000 22000 22000
Cash generated from operating activity before tax 21800 73050 97050
Less. Tax paid 0 14535 21705
Net cash flow from operating activity 21800 58515 75345
Cash flow from investing activity
Purchase of land -75000 -6000 63000
Purchase of oven -25000 -5000 15000
Net cash used in investing activity -100000 -11000 78000
Cash flow from financing activity
Introduction of capital 287620 25000
Cash flow from financing activity 287620 0 25000
Net cash increased during the year 209420 47515 178345
Add. Opening cash balance 10000 219420 266935
Closing cash and cash equivalent 219420 266935 445280

Financial report
• Balance sheet
Projected balance sheet
LIABILITY
Capital 287620 287620 312620
Loan from bank 10000 10000 10000
Creditors for goods 5000 6000 5600
Creditors for expenses 380 380 480
Total 303000 304000 328700
ASSETS
Land 200000 200000 200000
Building 100000 95000 100000
Ovens 1500 1000 6000
Cash 1500 8000 22700
Total 303000 304000 328700

Growth potential
• British restaurant is now facing lack of sufficient
curry flavours to the target audience of the UK
residents
• Indian herbs and special spices has made the
Indian recipes comparatively more popular than
the local recipes and typical fast foods of the UK
• Owners of the Indian restaurants in the UK are
visiting India to find out potential chefs

Conclusions
• Indian cuisine has a comparatively higher demand and
preference due to the ingredients
• Indian restaurants in Britain are eager to hire the chefs
from the India
• Business plan needs detailed information on the
probable risk factors
• Plan needs clear descriptions on the key assumptions
and deliverables
• Owner of the venture needs to accumulate primary
data in terms of customers’ opinion to set the menu