The Budget Restaurant Business Plan - Course Work Example

Paper Type:  Course work
Pages:  6
Wordcount:  1394 Words
Date:  2021-06-18

1.0 Executive Summary

The Budget Restaurant will be one kind of family styled restaurant offering a broad range of food stuff and drinks such as lighter flatbread pizza, chicken sandwiches, hamburgers, french fries, seafood, grilled chicken and a variety of appetizers at moderately fair prices. The restaurant will be a 60-seater capacity restaurant located in Northern Michigan in the Alpena Mall. Its location is driven by the estimation of about 12000 shoppers who flow through the mall weekly for shopping or other activities such as watching movies, eating. It will be a fun-filled environment with two television sets, a beautiful interior decor comprising of wood accented chairs, with white and purple table clothing. The budget restaurant will be a family owned business owned by two brothers; Eugine Clinton and Brian Bernard. Eugine Clinton will be the overall manager in charge of the restaurant owing to his experience in the hotel industry while Brian Bernard will be the assistant manager mainly in charge of the accounting section.

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The sales projection assume 1500 customers per week resulting in weekly sales of just over $15,444 or $999,453 annually. The total start-up cost was estimated to be $400, 000, of which $180,000 will come from the owners, and the rest will be sourced from a proposed bank loan.

1.1 Business Objectives

The primary goals of the budget restaurants are:

  • To provide first class meals at reasonable prices with exemplary service.
  • To be the premier family style restaurant in Alpena Mall.
  • To increase revenues to $17000 weekly or by 10% in the next two years.
  • To be the ultimate choice of restaurant in the next four years for prospective customers.

1.2 Mission Statement

The primary mission of the restaurant will be to provide quality family meals to customers while creating a stable environment for the business to thrive.

2.0 Company Description

The Budget Restaurant will be located in North Michigan and will be fully owned and operated by Eugene Clinton and Brian Bernard.The restaurant will diversify on quality family foods such as lighter flatbread pizza, chicken sandwiches, and hamburgers and french-fries. It will serve seven days a week throughout the year as follows.

Monday 9.00 a.m-9.00pm

Tuesday 9.00 a.m-9.00pm

Wednesday 9.00 a.m-9.00pm

Thursday 9.00 a.m-9.00pm

Friday 9.00 a.m-9.00pm

Saturday 9.00 a.m-7.00pm

Sunday 12.00 a.m-5.00pm

2.1 Legal form

Budget restaurant will be registered as partnership operated by Brian Bernard and Eugene Clinton

2.2 Start-up Summary

The opening cost of the restaurant is $400, 000, of which $180,000 will come from the owners and the rest will be sourced from a proposed bank loan

3.0 Market analysis

Budget restaurant has three primary target markets:

  • People who work in the mall during the day and will be looking for a walk in good food.
  • Families are visiting the mall for shopping and other activities.
  • Workers with families looking for take-out food to take home for family dinner at the end of the workday.
  • Families are living near the mall.

Each of these target markets is people who work in this area or flow through the area during the day; we expect excellent returns on weekends.

3.1 Market size

The USA restaurant includes about 520,000 restaurants with a combined annual revenue of $450 billion. Restaurant industry sales are estimated to total $704 billion in 2017 and equal 5 percent of USA Gross domestic market. On just a usual day in America, more than 140 million people will be food service patrons. (National Restaurant Association)

3.2 Industry Participants.

Major participants in the industry include McDonald's, YUM! Brands (KFC, Pizza Hut, Taco Bell) and Darden Restaurant (Olive Gorden, Red Lobster).

3.3 Main Competitors.

The following restaurants are located within a six-mile radius of Budget restaurant and pose the biggest competition.

Blue room restaurant- This is a fully serviced fast food restaurant established in 1977.it has the largest market share and generates an annual revenue of $1.7 million. It has 17 employees with their prices range being a little bit higher than that of the budget.

Collins kitchen this is a sole proprietorship offering mainly barbecue items. Although it offers a different type of food choice, the restaurants target the same market and have been existence since 1978.

Wimpy hotel-Their food quality is average, and their prices are also moderate with their prices ranging from $8-21, they complete on the similar market with budget and offer the greatest competition.

3.4 Market share.

We expect to have a 30% market share. However, we are optimistic about the business growth of the business and aim to double the market share in the next four years.

3.5 Market tests

Research has shown that Alpena Mall market is in dire need of a family restaurant, with many fast food chains already available.

3.6 Target Market Strategy.

The founders chose the location for the restaurant mainly because of the high traffic in Alpena Mall. This will encourage the family to support families coming to shop in Alpena Mall to stop in for a quality meal.

3.7 Market needs

The Alpena market does need a family style restaurant, the choice of fast food restaurant is vast compared making the area limited to family restaurant options. Budgets nearest competitor has located about six miles away from the location.

4.0 Market strategy and positioning

The Budget restaurant will position itself as the first family style restaurant in Alpena Mall. This will be achieved by providing the first-class service at very moderate prices. To realize the success of Budget restaurant, we will have to do more than providing helpful and friendly services; we will also devise an excellent marketing plan to build customer traffic.

4.1 Promotion and advertising strategy

Website- Budget restaurant intends to create an online presence by developing a simple website will inform its potential customers about the location, menu, and prices of food stuff.

Social media- the Budget restaurant will conduct social media advertisements through Facebook, Twitter, and Instagram.

Print advertising- the Budget restaurant will advertise on local magazines.

Word of mouth we will rely on word of mouth by our customers after offering them excellent service.

SWOT Analysis

SWOT analysis checks the restaurant strengths and weaknesses that need to be known

Strengths The fact that its still not a franchise and is limited in size. Its operating costs will be small combined with the owner's experience in the hotel industry; it will be very easy to manage.

Weaknesses- Due to limited capital the restaurant will not be able to compete effectively with other restaurants.

Opportunities - The North Michigan demographics around the Alpena Mall support the need for a family style restaurant considering the heavy traffic that comes into the mall on a daily basis. Threats -The market is still open, however, if another family restaurant nearby it will greatly affect the market share.

Sales Strategy

Good customer service will be our number one priority.

Our menu will also concentrate on the more profitable products.

The budget restaurant will also conduct training on its staff on superior customer service and how to deal with customers attitudes and complaints.

The budget restaurant would also gradually increase the prices to improve brand image.

Sales Forecast

The sales revenues are projected to increase by 5% by year 2 and 10% during year 3.The chart below shows the estimated sales revenue in the next three years.

Annual sales forecast year 1 year 2 year 3

Food and drinks $803 636 $843,819 $890000

Product $0 $92,000 $115000

Controllable costs

COGS $342,100 $352,200 $363,153

Payroll $242,000 $242,000 $252,000

Total prime cost $584100 $594,200 $615,153

Controllable profit $219536 $249,619 $274,847

5.0 Organizational Management.

5.1 Organizational structure

The budget restaurant will be owned by Eugene Clinton and Brian James. Eugene Clinton will be the overall manager and will be in charge of all operations. He has a bachelor's degree in the hotel industry and career experience spanning ten years in the hotel industry. Brian James will be the assistant manager; he will be in charge of accounting and human resource. Budget intend to hire ten permanent staff and hire more temporary staff on a need for need basis. Brian will personally designate his place of work according to his area of expertise.

5.2 Management team gaps

Eugene and Brian will initially fill the control gaps, but as the business prospers, they intend to hire a supply manager, kitchen manager, and human resource manager.To meet the gaps associated with cost accounting, inventory management, and payroll, the management will acquire a point of sale system.

6.0 Financial projections

The given sections are a summary of the financial plan.

Required cost of start-up, weekly sales projections.,

6.1 Important assumptions

Meal price ranges from $8-$20

Average lunch price $9.70

Average dinner price $14.50

6.2 Start-up costs

Start-up costs Expenses

Contingency $1000

Working capital $180,000

Insurance premium $4800

Building improvements $60,000

Permits + lease deposits $2450

Graphic logo and name creation $1700

Outdoor sign $3500

Total start-up expenses $252,700

Start-up asset Expense

Kitchen equipment $46,500

Furniture and fixture $95,000

Artwork $800

Cash registers +p .o .s system $5000

Tot...

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The Budget Restaurant Business Plan - Course Work Example. (2021, Jun 18). Retrieved from https://proessays.net/essays/the-budget-restaurant-business-plan-course-work-example

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