Competitive Analysis 5 Business Plan Sample
Business Plan: Small Restaurant
[Word Count: 2100]
Business Description 4
Marketing strategies 6
Operations and management plan 8
Human resource issues in a small restaurant 9
Financial plan 9
Reference list 11
The hospitality industry is a multi-billion industry that is slowly attracting the interest it deserves from various investors (Barrows, 2009). The industry is particularly concerned with offering of services to customers in exchange for cash. The services offered by the industry run from a restaurant, hotel or the parks that are used for amusement. The industry depends a lot on the disposal income and the leisure time available to a person (Webster, 2000). The introduction of hospitality unit like a hotel and its success will solely depend on the location of the unit and the target customers. The analysis of the two factors, leisure time and the disposable income are essential in determining the right locality to open a hospitality unit. The main issue that affects the hospitality industry especially the restaurants is the presence of the supermarkets which have introduced the catering sections hence intense competition.
African Rainbow is an African cuisine that will be located along the 10-16 St. Michael’s Road in Headingley. Headingley hosts a lot of sporting activities each year due to the presence of stadiums that are homes to Leeds Rhino Rugby Team and also Yorkshire County Cricket Club. African Rainbow will be strategically positioned in a corner of St. Michael's Road. The students and graduates make up the population in the area hence they make up the target customers. The presence of the stadiums and population which consists of students and graduates is a perfect sign of the growth that the area will achieve within a short period. The proximity of the restaurant, two miles North of Leeds City Center, will provide a perfect chance for the restaurant to attract more customers from the city center. The restaurant's primary focus is to provide African dishes that are not readily accessible in the area. The dishes are to be served to customers in three ways: First, the clients who come and eat from the restaurant. The Second way is a service that will cater to those customers who want dishes for take away. The Third way is the home deliveries that will not cover customers who are more than one mile radius from the restaurant (Hayes, 2009).
Competition within the Hospitality industry is one issue that cannot be eliminated entirely. Within Headingley, there are many restaurants that are operating, and this is the main source of competition. These restaurants are all aiming at attracting the students, graduates and other customers who come to Headingley to watch or participate in sporting activities. The main strength that African Rainbow has over the competitors is the dish that it intends to serve the customers. In the area, there is no restaurant that is serving African dishes and also offering home deliveries. The restaurant plans to utilize these two strengths plus the development of customer service. Weaknesses that the restaurant may face is the introduction of totally new dish hence the challenge of marketing. The weakness that the competitors have is the pricing strategy that hence loss of competitive edge over other businesses (Mahnken, 2012).
The opportunity that the restaurant shall be able to maximize on is the introduction of alcohol in the restaurant to cover customers who take alcohol. The presence of Skyrack pub shall not deter the business since customer service, and the prices reduction shall earn the business considerable number of customers from the pub. The target customers of all the business are mostly graduates and the students which mean they do not have enough cash to spend. The students rely on their parents’ hand-outs, and the graduates are not earning much to cater for their needs. In consideration of these facts, there is a need to introduce a pricing strategy that will ensure that target customers are considered (Naunheim, 2011). The threats that may come from the supermarkets can be eliminated by the use of customer service.
The market share that African Rainbow has is wide and can only be fully optimized if efficient marketing strategies are used. The marketing strategies that will help the restaurant are the Porter's Generic Strategies (Ranchhod, 2007). The porter's generic strategies are aimed at ensuring that a business achieves a competitive advantage through product differentiation, cost leadership or market segmentation. The product differentiation is attained by the restaurant by providing a service that none of the prospective customers is providing (Shankar, 2012). The provision of African Cuisine helps in making sure that the restaurant has a considerable advantage over other restaurants. Cost leadership can be achieved by decreasing the cost of foods served by African Rainbow. Drop in price will ensure that the customers can get the quality and affordable food within the restaurant. The customers, who are mostly students, will be attracted to the restaurant due to low prices offered. The referrals that may come from the students will be able to ensure that the restaurant has more customers than other restaurants in the area. Market segmentation is also a market strategy that will help the restaurant to achieve its desired goal (Ryan, 2012). The division of the customers according to the needs and the financial status will assist the restaurant in grow. A loyalty card will be issued to those customers who frequent the restaurant and also students. The loyalty card can be used to give discounts to customers and hence attract more customers to the restaurant.
The marketing methods that the restaurant will use to create awareness of the existence of the restaurant are billboards, social media, messaging services and telecasting (Paley, 2006). The billboards will advertize the restaurant to prospective customers especially who arrive in the area to participate in sporting activities. Social media will target the students and also the graduates who are fond of technology. The young generation has been using social media to interact and hence a chance for the African Rainbow to use this platform to market its services. It is approximated that 60% of the students use messaging services to communicate with each other (Kasabov, 2012). The platform can also be utilized by the restaurant to ensure that they attract more prospective customers. The restaurant can find the numbers of the students through organizing a special event that they can participate in through sending a text with the words African Rainbow Festival. Ones the phone numbers are received the person gets feedback confirming his qualification to come to the event. This will automatically attract many students, and their numbers are captured in the database for future use in promoting a particular dish. The numbers will be used to message students for special events and food that is on offer at a particular cost. Telecasting will help in advertising the restaurant hence attracting more customers.
Design and development plan
The restaurant will be providing African dishes, pizzas and also alcohol to its customers. The African dishes will mostly consist of dishes that are valued by the African society. The decision to provide African food is meant to attract more clients from the African continent and also customers who love African traditional dishes. The pizza section will serve customers who like it and also free deliveries for the pizzas. The pizza is commonly liked by those customers who want fast foods and do not have the time to wait for a particular dish to be prepared for them. The customers can include fans that come to the stadiums to watch cricket or any other sporting activities. The presence of students in the area is also a factor that can be used by the management to ensure that those students who love pizza have access to it. The alcohol section will provide a relief to customers who like to take their meals with alcohol. The restaurant will also have an open space with comfortable seats that will ensure that the clients who like privacy or would like a place discuss issues have a comfortable area to do so. With time, the section will be able to be extended to accommodate more customers and also a place for recreation activities but separate from the alcohol section.
Operations and management plan
African Rainbow restaurant will have two managers who monitor the operations of the restaurant. The managers will each have two roles and departments to deal with. Home deliveries and the takeaway will be coordinated by one manager while the other manager will coordinate the alcohol and the food that the customers eat while in the restaurant. The human resource manager will be established to take care of the valuable resource of human capital (Doyle, 2008). The restaurant will have a minimum of 20 employees excluding the managers. The employees will work together as a team despite the presence of the different areas they will be posted in. The working as a team will help in achieving the goals of the business. The two-storey building cannot be served by 20 employees if they are not able to work together as a team. The employees’ turnover can be minimized by offering rewards, better compensation than competitors and ensuring them of job security (Abrams, 2003). The chefs should coordinate with the employees who have direct contact with the customers to ensure that the dish required is provided quickly.
The management shall be responsible for the decisions made by the staff and also guarantee that supplies are available all the time (Walker, 2010). The inventory shall be handled by the two floor managers who are to ensure that each supply demanded is available, and it is used in the right way. The training of the employees and stipulation of their responsibility shall be left in the hands of the resource manager. The coordination with the floor manager will help in determining the number of employees who will work in various areas.
Human resource issues in a small restaurant
The primary issue that faces the human resource department is the determination of the right employees who have the capability of performing more than one task due to financial status (Hayes, 2009). The use of students who are within the area would help a lot in ensuring that the business has enough employees. The human resource management will attract students who are studying hospitality in various colleges through offering internships and attachment programs. When a small business concentrates on spending a significant amount on overhead costs then the business may end up failing due to the inability to meet these costs (Lee, 2011). In small business, the cost incurred should be as minimal as possible to ensure that the business gains profits from its operations. The recruitment of the staff can be done based on the abilities of each employee and the experience earned (Brown, 2007). Those without experience like the students will work under an internship or attachment program.
African Rainbow restaurant requires £220,000 to get started. The money will be used to buy property at the rateable of £27,250, leasehold of £79,950, an annual rent of £37,000 and the employees' salaries of £50,000 and the restaurant supplies of £25800. The source of the capital would be from personal savings of £15,000, the bank loan of £110,000 and an investor to provide £95,000 for 65% stake in the restaurant. The projected sales turnover of the restaurant is £250,000 since the sale of alcohol will helps achieve this target. In the first year of trading, the business will not be able to process the loan from the bank. In the second year of trading, the restaurant will be capable of paying back the loan from the bank and also offer better pay to its employees. The returns for investing in the company can be achieved within a period of four years. The investment returns shall have an interest. The valuation of the company projected to be £50,000 after the four years. The number of employees will be increased ones the business is in the position to cater their salaries based on the salary bracket established each year (Pinson, 2008). It is expected that after five years of trading, the investor will offer 20% of his stake to the public. The employees would be the number one investors who would be considered in the Initial Public offer (Abrams, 2003).
The hospitality industry is a multi-billion industry that is slowly attracting the interest it deserves from various investors. Competition within the Hospitality industry is one issue that cannot be eliminated entirely such as that from Skyrack pub and other restaurants within Headingley. The market share that African Rainbow has is wide and can only be fully optimized if efficient marketing strategies are used.
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