Executive summary
The Monique Home style restaurant will be a forty-eight seat restaurant offering lunch service with fresh sandwiches and salads to clients and delivery services to office workers. The restaurant menu includes roasted chicken, pot roast, classic hamburgers, steaks and pork chops along with sandwiches, wraps and generous salads. The restaurant will be owned and operated by Monica and myself. Both of us have been in the industry of catering and restaurant for 10 years. The restaurant will be located in a 2800 square foot location situated at Business center West Roads. This area is a location where retail business is on the rise which makes it quite ideal for our business as well specifically Benbrook, Texas. The place was formerly used as a café, however the former occupant removed the furniture and fixtures and equipments which we will have be replaced. Also, the location will need additional renovation to upgrade the lavatories and the dining area (Mason, & Stark, 2004). Besides, it will need acquisition of a new motorbike or a van to perform office deliveries.
The interior decoration will characterize wood decorated chairs with black and brown checked counter cloths. The banquet tables will be surrounded by wooden chairs which have contented seating cushions. The projections on the sales assume the hotel will serve 1400 consumers weekly thereby creating weekly revenue of $24,200 or $824, 980 annually. This revenue is equivalent to approximately $268 per square foot in sales per year which positions Monique Home Style Restaurant a highly desirable concept for ownership in a service marketplace in which $220 to $375 for every square foot is deemed commercial advantageous and therefore a good investment. The initial cost will be $450,000, in which $ 160,000 will be sourced by the promoters and what’s left will be funded by the projected loan facility.
Business strategy
Introduction
General restaurant description
The Monique Home style café will be situated 782 Camp West, Texas. The restaurant will be owned by Monica and I in whole capacity. The restaurant will serve a variety of home style favorites to their customers. The restaurant will be offering services to its customers six days per week as follows; Monday to Friday; from 7.00Am to 8Pm and on Saturday from 7.30Am to 3.00Pm
Restaurant’s mission statement
Our mission is to offer our clients a distinct homely experience. By: Timely delivery of clients’ orders, Incorporating affordability and quality in our menu items and Focusing on corporate social responsibility and social welfare of both clients and staff
Restaurant’s goals and objectives
The primary goals and objective of the Monique restaurant would be as follows:
· To be the one leading home styled bistro within Texas and beyond
· To provide quality services and meals at affordable prices
· To provide timely deliveries in different offices as requested by the customers
· Achieve cover ratios of 1.00X at each lunch serving
· To attain a prime cost ratio below 65%
Guiding principles
- Being mindful of how we treat our customers and staff. Based on our family values, we will treat both our customers and staff in a manner in which we ourselves would want to be treated, coinciding with our family values (Mason, & Stark, 2004).
- We will always show gratitude to our customers, employees, vendors because they are the key pillars that can the restaurant operate. The restaurant success relies on the input, service, labor and times hence the need for attitude of gratefulness to the providers of these services.
- Our restaurant will provide the welcoming and gracious service anticipated from a social style café to the customers creating an relaxed comfortable setting which makes the customers contented and therefore want to continually get served by our restaurant (Karlsson, & Honig, 2009)
Keys to success
The success of the business would be as a result of a powerful word of mouth that will enable us to win many offices to be supplied with the restaurant services and even attract more customers to come in the restaurant
To hire highly qualified chefs and offer training to ensure the chefs are always on top and offer fair wages to ensure they stay
We need to be located near our market so that those who are not in offices can as well reach us without having to travel far distances.
Avail a variety of menu offerings which are reasonably priced to establish credibility and which are affordable and would not limit the customers.
Current position
The Monique restaurant is currently under development stage. It is the stage where the spirit of creativity and innovation is applied in the development of the generated ideas (Mason, & Stark, 2004). As the starters, we have successfully secured $ 160,000 from our personal savings and other sources. We are looking forward to getting the balance from the bank in form of a bank loan.
Legal form
The Monique home style restaurant will be controlled as a sole proprietorship entirely owned and managed by me. The restaurant is incorporated as community property state in Texas.
Start up summary
The initial cost to start up the business is $450,000. Amount totaling to $50,000 will be used to acquire a delivery van. The location will consume $40,000 to renovate and the majority of expenses will be on the furniture and fixtures. We will sub-contract the work ourselves. The sum of $ 160,000 will be funded by us; this will be a combination of liquid asset and marketable securities that we had been using in the previous catering business.
Location and facilities
The restaurant which is 2800 square feet will be situated in shopping center of West Roads in the Benbrook suburb, Texas. It is located in a business center where there are approximately 13600 offices and a population of about 46000 according to the census report of the U.S in the year 2010. The major employers include the Bank of America and the Union Pacific. The immediate population comprise of single families and college students with household income of $ 42,000.
The products and services offered
The Monique home style restaurant will offer the following services to its customers:
- Chopped potatoes
- Hamburgers and plenty of salad
- Roasted chicken, sandwiches and wraps
- Evening tea delivery to offices
- Lunch time office delivery services
Daily operation and production
The business will be open six days a week for lunch and evening tea supplied to different offices in the area (Karlsson, & Honig, 2009). Monica will schedule the work such that it will permit for the capability to enhancement or decrease the labor per hour according to the volume of sales to maintain a steady control of the cost of labor. She will also ensure that there is sufficient storage equipment to make sure that the high quality products are prepared in advance and stored to meet demand during peak hours. Besides, Monica will ensure that each staff is assigned a given number of office outlets and that they are timely with the deliveries. I will be in charge of ordering, maintaining and receiving sufficient stock to meet production market demands. In each order placed, it will by design be printed to a demand printer positioned in the grill spot. This will enable the grill cook to keep track of the orders. The kitchen groundwork line has been planned to be managed by at least 1 line cook and not exceeding of four cooks. This plan allows line conscription to be accustomed to the commerce volume reallocation changes for all employees will encompass restocking, cleanup, and preparation. All monies will be settled at the end of each shift (Karlsson, & Honig, 2009). The concluding shift will entail designated finishing duties that entail the cleaning and preparing the restaurant to be used for the next day.
Competitive advantage
There are existing competitors in the area such as:
Applebee’s – is a chain bistro providing its services at a standard tariff. The meal quality is standard and prices range similar to the Monique restaurant (Karlsson, & Honig, 2009)
Chili’s –this is a chain restaurant also offering standard fare Food choices are varied and prices are affordable
Barbeque Ben’s – is a sole proprietorship providing primarily items of barbeque. even though the foodstuff offering does not rival unswervingly with the matter, the eatery targets the same locality families and has been in service at the single position since the year 1981. The prices are very affordable.
The Monique restaurant being strategically located in the city has a competitive advantage over the other restaurants which are not easily accessible. Additionally, the restaurant has a unique idea of offering office deliveries which is more preferred by most clients as opposed to other competitors who offer fare to their customers. Our restaurant saves on the clients’ production time.
Suppliers
We are able to create a good relationship with quality suppliers due to our combined experience in our existing catering business. The merchants will provide realistically priced merchandises delivered according to the time schedule.
Controls of the management
The administration will practice sound management procedures to minimize the costs. The following systems will be applied by the management to ensure the business remains a going concern:
- There will be a specific order guide in the restaurant to keep the order history on track and to maintain the designated level of product in the inventory
- The administration will carry out a weekly stock take to determine valuation to be used in the preparation of a weekly statement of financial position
- There would be daily inventory tracking and the progression to be measured to the sales statistics to ensure proper accounting
Market analysis
The business of restaurant is large and diverse business and contributes to 4% of the U.S domestic growth product. The market analysis is based on the demand mode. The demand is influenced by the number of competitors in the targeted market area. The major competitors are the McDonald and Darden restaurants.
Industry analysis
Market size
It is important to understand the market size of the U.S which includes about 480,000 restaurants with combined revenue of $400 billion and the large restaurants only constitute to 20% of the total number of restaurants.
Participants of the industry
The main participants consist of major firms such as McDonald’s; Brands of YUM!
(Pizza Hut, KFC, Taco Bell); plus Darden Restaurants (Red Lobster, Olive Garden)
Main competitor
The major competitors we would face is the Hedarys Restaurant. This restaurant is a full service societal restaurant founded in 1977. The restaurant managed as a sole proprietorship, employs 17 staffs and makes $1.7 million in income yearly. Their pricing are higher than the Monique restaurant.
Market segments
The restaurant will appeal to a broad base of consumers in the business community (Chen, Yao, & Kotha, 2009). The location was selected to appeal tom the growing number of offices in the area. The major offices targeted are the Union Pacific railroad and the Bank of America.
Market tests
We have been catering part time for the past 10 years and our home style menu is very common with family reunions. We have also maintained constant online marketing program. We have already developed a good customer base through our catering business.
Target market strategy
We selected a target area for the restaurant so that we can be able to serve a number of offices within the area since they are easily accessible from our location. We can serve many customers who may be too tired or busy to move form office to the restaurant.
Market needs
The Benbrook is in need of a restaurant that can provide lunch services to the many offices that were recently built in the area. This is because the nearest restaurant that provides quality lunch meals is far away from the location.
Market growth
The market is expected to grow fast because many people prefer home style meals for lunch. They have a belief that the home style meals are of better quality than the snacks in most of the restaurants.
Strengths, Weaknesses, Opportunities and Threats Analysis (SWOT analysis)
Strengths
- The business is in a prime location with easy access of the targeted market niche.
- The experience and expertise we collectively acquired during the 10-year period in the industry experience
- The fact that we had already recognized a customer marketplace and accepted vendors for our business
- Owing to our diminutive size, we think we can provide outstanding quality by hand choosing our marketplace specials when measured to our larger commercial competitors. The similar concept is true in our employment requirements, by hand picking our workers we will endeavor to offer unrivaled service when measured to our larger rivals.
Weaknesses
- Employing and retaining excellent employees
- Tight profit margins will permit little wriggle room for mistake
Opportunities
- diminutive barriers to entrance allows for instantaneous business opportunities
- proffer additional cuisine services
Threats
- administration policies and guidelines, for example, (food safety, restaurant operation, and worker fortification at the national level and healthiness, sanitation, security, fire at the confined level)
- increasing operating costs
- Building or sustaining sales quantity
Exit strategy
When exiting the market, the business will dispose off its fixed and current assets through auction. The perishable goods such as food will be written off to the staff.
Human resource plan
Organization structure
The Monique restaurant expects to hire 14 employees. We have adopted an effective interview plan which will ensure that only qualified persons are recruited for the job. Background checks will also be taken into consideration to ensure competency (Chen, Yao, & Kotha, 2009).
Management team
I will own the restaurant because I have worked in a quick service food service operation since I was 14 years and earned my way into the college. After earning my degree, I worked for an independent fine dining as an assistant manager and then general manager
Monica will be employed as a kitchen manager. She was employed in a five-star hotel after her graduation from the Art institute in Dallas.
Management team gaps
Initially Monica and I will fill the management gaps but in future, we will hire a Director of sales, a kitchen manager and a general manager. We will also apply the point of sale system to meet the gaps associated in inventory management and payroll, and cost bookkeeping.
Personnel plan
| Annual sales forecast | First year ($) | Second Year ($) | Third Year ($) |
| G. manager – Owner | 28655 | 32625 | 35623 |
| Asst. manager/ cashier | 23421 | 23421 | 23421 |
| Line cooks | 33252 | 36352 | 38373 |
| Prep cooks | 51423 | 53413 | 55413 |
| Office suppliers | 42534 | 44514 | 48514 |
| Servers and cashiers | 20100 | 26151 | 21615 |
| Book keepers | 6500 | 6700 | 7200 |
| Dish washers | 21000 | 21500 | 22100 |
| Sales agent | 14112 | 18161 | 21725 |
| Catering employees | 16171 | 19191 | 22000 |
| Total | $223, 898 | $265,092 | $388,092 |
Financial plan
The financial plan outline includes the following:
- The required cost of capital which is projected to be $350,000 out of which $ 160,000 to be contributed by the owners and the remainder to be raised in form of a bank loan.
Start up expenses
| Start up expenses | Amount |
| name creation and Graphic logo | $1500 |
| lease deposit and Permits | $1500 |
| Emergency costs | $9,000 |
| Sign of the Outdoor | $2,500 |
| Improvements n buildings | $50500 |
| Capital employed | $163000 |
| Expenses of pre-opening | $15000 |
| Start-up Totals | $243000 |
Start up assets
| PARTICULARS | AMOUNT |
| Art Decoration costs | $800 |
| Cooler | $7000 |
| dishwasher (commercial) | $8000 |
| freezers (2) | $5000 |
| cold station | $4000 |
| food processor | $1000 |
| Van for delivery | $49000 |
| hood with exhaust | $900 |
| beverage cooler | $4000 |
| Six restaurant burners | $1500 |
| Chrome shelving systems | $600 |
| Reach in coolers | $5000 |
| work tables | $400 |
| steel table | $900 |
| fire protection system | $3900 |
| 3 bowl sink | $1500 |
| 10 round tables | $9000 |
| 48 wood café chairs | $19900 |
| track lighting (10) | $600 |
| Table cloths | $300 |
| Miscellaneous | $900 |
| safe | $300 |
| POS system and Cash register | $1900 |
| Office Computers | $2,200 |
| Total Initial assets | $125,000 |
| Total essential start up cost | $364,000 |
- The statement of comprehensive financial statement which explains the profit or losses incurred by the restaurant
| PROJECTED STAMENT OF INCOME | |||
| 2016 | 2017 | 2018 | |
| Sales revenue | $ 1,026,982.00 | $ 1,386,425.70 | $ 1,871,674.70 |
| cost of goods sold | $ 407,262.00 | $ 610,893.00 | $ 916,339.50 |
| Gross profit | $ 619,720.00 | $ 775,532.70 | $ 955,335.20 |
| Expenses | |||
| Salaries | $ 42,322.00 | $ 50,786.40 | $ 60,943.68 |
| Bad debts | $ 12,524.00 | $ 15,028.80 | $ 18,034.56 |
| Insurance | $ 62,522.00 | $ 75,026.40 | $ 90,031.68 |
| Wages | $ 165,220.00 | $ 198,264.00 | $ 237,916.80 |
| Rent | $ 27,363.00 | $ 32,835.60 | $ 39,402.72 |
| Shrinkage | $ 53,422.00 | $ 64,106.40 | $ 76,927.68 |
| Taxes | $ 24,521.00 | $ 29,425.20 | $ 35,310.24 |
| Credit Card fees | $ 26,518.00 | $ 31,821.60 | $ 38,185.92 |
| Legal and Accounting Fees | $ 37,262.00 | $ 44,714.40 | $ 53,657.28 |
| Permits Fees | $ 46,543.00 | $ 55,851.60 | $ 67,021.92 |
| Total Expenses | $ 498,217.00 | $ 597,860.40 | $ 717,432.48 |
| Net profit | $ 121,503.00 | $ 177,672.30 | $ 237,902.72 |
| Net profit margin | 11.83% | 12.82% | 12.71% |
- The projected cash flow statement which explains the cash movement in the business
| PROJECTED CASH FLOW STATEMENT | ||||||
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
| Cash inflow | ||||||
| From Operations Cash | $ 162,822.00 | $ 214,925.04 | $ 283,701.05 | $ 374,485.39 | $ 494,320.71 | $ 652,503.34 |
| sales | $ 643,602.00 | $ 901,042.80 | $ 1,261,459.92 | $ 1,766,043.89 | $ 2,472,461.44 | $ 3,461,446.02 |
| cash from Debtors | $ 14,231.00 | $ 19,923.40 | $ 27,892.76 | $ 39,049.86 | $ 54,669.81 | $ 76,537.73 |
| Totals From Operations | $ 820,655.00 | $ 1,135,891.24 | $ 1,573,053.73 | $ 2,179,579.14 | $ 3,021,451.97 | $ 4,190,487.10 |
| added cash received | $ 182,601.00 | $ 114,532.00 | $ 23,180.00 | $ 32,452.00 | $ 45,432.80 | $ 63,605.92 |
| Taxes (sales) | $ – | $ – | $ – | $ – | $ – | $ – |
| Investment | $ 82,872.00 | $ 107,733.60 | $ 140,053.68 | $ 182,069.78 | $ 236,690.72 | $ 307,697.93 |
| Total Cash inflow | $ 1,086,128.00 | $ 1,358,156.84 | $ 1,736,287.41 | $ 2,394,100.93 | $ 3,303,575.49 | $ 4,561,790.95 |
| EXPENDITURES | ||||||
| To operations | $ 673,633.00 | $ 842,041.25 | $ 1,052,551.56 | $ 1,315,689.45 | $ 1,644,611.82 | $ 2,055,764.77 |
| spent cash | $ 352,470.00 | $ 440,587.50 | $ 550,734.38 | $ 688,417.97 | $ 860,522.46 | $ 1,075,653.08 |
| Totals To Operations | $ 1,026,103.00 | $ 1,282,628.75 | $ 1,603,285.94 | $ 2,004,107.42 | $ 2,505,134.28 | $ 3,131,417.85 |
| Repayment of Loan | $ 35,234.00 | $ 35,234.00 | $ 35,234.00 | $ 35,234.00 | $ 35,234.00 | $ 35,234.00 |
| Total Cash Outflow | $ 1,061,337.00 | $ 1,317,862.75 | $ 1,638,519.94 | $ 2,039,341.42 | $ 2,540,368.28 | $ 3,166,651.85 |
| Annual Net Cashflow | $ 24,791.00 | $ 40,294.09 | $ 97,767.48 | $ 354,759.50 | $ 763,207.21 | $ 1,395,139.11 |
- The pro forma balance sheet statement to show the financial position of the restaurant
| PROJECTED STATEMENT OF FINANCIAL POSITION | |||
| 2016 | 2017 | 2018 | |
| Assets | |||
| Current Assets | |||
| Debtors | $ 73,000.00 | $ 87,600.00 | $ 105,120.00 |
| Cash at hand and bank | $ 35,433.00 | $ 42,519.60 | $ 51,023.52 |
| Stock | $ 15,627.00 | $ 18,752.40 | $ 22,502.88 |
| Other current assets | $ 11,029.00 | $ 13,234.80 | $ 15,881.76 |
| Total Current Assets | $ 135,089.00 | $162,106.80 | $ 194,528.16 |
| Long Term Assets | $ 271,620.00 | $325,944.00 | $ 391,132.80 |
| Accumulated depreciation | $ 13,581.00 | $ 27,162.00 | $ 54,324.00 |
| Total fixed assets | $ 258,039.00 | $298,782.00 | $ 336,808.80 |
| Total Assets | $ 393,128.00 | $460,888.80 | $ 531,336.96 |
| LIABILITIES AND CAPITAL | |||
| current liabilities | |||
| Creditors | $ 22,322.00 | $ 26,786.40 | $ 32,143.68 |
| short term loan | $ 12,324.00 | $ 14,788.80 | $ 17,746.56 |
| other short terms liabilities | $ 4,643.00 | $ 5,571.60 | $ 6,685.92 |
| Total Current Liabilities | $ 39,289.00 | $ 47,146.80 | $ 56,576.16 |
| Long Terms Liabilities | $ 198,755.00 | $238,506.00 | $ 286,207.20 |
| Total Liabilities | $ 238,044.00 | $285,652.80 | $ 342,783.36 |
| Capital contributed | $ 155,084.00 | $175,236.00 | $ 188,553.60 |
| Retained earnings | $ 60,751.50 | $ 88,836.15 | $ 118,951.36 |
| Total Capital | $ 215,835.50 | $264,072.15 | $ 307,504.96 |
| Total Liabilities and Capital | $ 393,128.00 | $460,888.80 | $ 531,336.96 |
- The financial ratios
- The hourly labor costs
Source and use of funds
The total amount of capital required too start the business is estimated at $ 350000. Most of the costs incurred are related to restaurant equipment, inventory and furniture and the delivery van of $50,000. Monica and I agreed to contribute $160,000 and the additional $190,000 to be requested in the form of a bank loan. The loan is expected to be amortized in four years (Chen, Yao, & Kotha, 2009).
Break even analysis
The fixed costs for the entire operations is calculated to be $ 725, 892
The variable cost per unit of each meal in the restaurant is $ 5.63
The average selling price for meals in the restaurant is $12.72
The contribution is per unit is therefore = $ (12.72 – 5.63) = $ 7.09
The contribution margin ratio = 7.09/12.72 = 55.73%
The break even sales = fixed costs / contribution margin ratio
= $ 725, 892 / 55.73%
= $ 1,302,305.54/=
From the above calculations, the break even sales are below the projected sales hence the company is deemed to make more profits at these prices and costs implied.
Appendices
List of assets owned by the restaurant
| DETAILS | AMOUNT |
| Art Decoration costs | $800 |
| Cooler | $7000 |
| dishwasher (commercial) | $8000 |
| freezers (2) | $5000 |
| cold station | $4000 |
| food processor | $1000 |
| Van for delivery | $49000 |
| hood with exhaust | $900 |
| beverage cooler | $4000 |
| Six restaurant burners | $1500 |
| Chrome shelving systems | $600 |
| Reach in coolers | $5000 |
| work tables | $400 |
| steel table | $900 |
| fire protection system | $3900 |
| 3 bowl sink | $1500 |
| 10 round tables | $9000 |
| 48 wood café chairs | $19900 |
| track lighting (10) | $600 |
| Table cloths | $300 |
| Miscellaneous | $900 |
| safe | $300 |
| POS system and Cash register | $1900 |
| Office Computers | $2,200 |
| Total Initial assets | $125,000 |
| Total essential start up cost | $364,000 |
References
Mason, C., & Stark, M. (2004). What do investors look for in a business plan? A comparison of the investment criteria of bankers, venture capitalists and business angels. International Small Business Journal, 22(3), 227-248.
Chen, X. P., Yao, X., & Kotha, S. (2009). Entrepreneur passion and preparedness in business plan presentations: a persuasion analysis of venture capitalists’ funding decisions. Academy of Management Journal, 52(1), 199-214.
Karlsson, T., & Honig, B. (2009). Judging a business by its cover: An institutional perspective on new ventures and the business plan. Journal of Business Venturing, 24(1), 27-45.