Feasibility Report On Opening A New Restaurant in Blue Area, Islamabad
Feasibility Report On Opening A New Restaurant in Blue Area, Islamabad
Feasibility Report On Opening A New Restaurant in Blue Area, Islamabad
Area, Islamabad.
A Project Submitted In Partial Fulfillment of the Requirements for the Degree of MBA
Bahria University
2009
Abstract
3
3.6.4 Sales Strategy..................................42
3.6.5 Sales Forecast..................................43
3.7 Management Summary..................................44
3.7.1 Personal Plan...................................45
3.8 Financial Plan......................................46
3.8.1 Projected profit and loss statement.............47
4.0 Risk Analysis........................................49
5.0 Contingency plans....................................50
Annexure.................................................51
Bibliography.............................................57
4
1. Introduction
When ever people talk about becoming an entrepreneur, usually most of them
have dreamy looks on their faces and express it by saying that: “oh I have always
wanted to be an entrepreneur” and then they would usually follow it with a line:
“wish I had enough capital to start up my own business”. Well to some extent it is
true and to a certain extents it is false. Usually when people think of setting up a
business, the first thing which comes to their minds is the business start up cost.
They often think that it is quite high and they never think of evaluating and
assessing the different sets of options and alternatives which are easily available
to them in which they can invest easily and become a business owner.
People think businesses can only be established with the availability of high
capital, where as there are many business opportunities, which require very less
capital requirements such as consultancy, contractual works, restaurants and many
other set of alternates. To be business man is simply not every one’s cup of tea;
one has to be very determined, strong and dynamic to be a successful
businessman to make his presence feel in the market.
Now, the question arises why to become a business owner when one can easily
get a job and earn money rather than taking high risk of investing a large sum of
money in the business and hoping it to perform well so that it can pay out benefits
in the future. The answer is quite simple; a person can earn good money from his
job but he will still not be able to compete with a businessman in terms of his
wealth. Business was also our Prophet’s (S.A.W.W) favorite profession because it
has several advantages related to it.
This is the reason why researchers have decided to do this business plan, as a final
project. As all three researchers have completed MBA and before that they did
BBA (Hons), which makes it round about five years of business academic studies.
1
Researchers felt that they would sincerely utilize their knowledge and skills which
they gained during academic studies by starting up their own business and make it
run successfully through pure professionalism.
After deciding the future direction, that is to establish their own business, it was
important for them to find out which is the best option available to them for
investing in current local and global economic circumstances.
2
affordable price to the customers accompanied by
excellent service.
II. As a local business owner, you get to meet a lot of people. If your
restaurant is in your hometown, you get to visit with friends and
neighbours. A restaurant is a community gathering spot, and that sense of
community can be very rewarding.
III. Depending on whom you speak to, people often think that all restaurant
owners are people of high society that also comes with a touch of glamour
so there is likelihood that you’re able to make good PR relations with
prominent personalities of the society which can help you in your business
carrier.
In the following pages researchers have discussed in detail the restaurant industry
trends, external environment analysis, strategy tools which they will use to
incorporate strategies for the restaurant and a detailed business plan will also be
discussed, which will cover all essential aspects of the business plan.
3
1.2 Problem Statement
“Feasibility of establishing a restaurant by preparing a business plan on the basis of
the target market and average capital while introducing innovative promotional
strategies to penetrate the market”
4
employees in the surrounding offices will also have a major portion of the target
audience.
1.4.3 Procedure
Keeping in mind the type of research and type of data required both quantitative
and qualitative research was preferred for this research report. In quantitative
research, questionnaire forms were used in collecting data from the sample groups
identified earlier. Many researchers have raised objections to the quantitative
research as it misses out the detailed information which is some times crucial for
the research, so in order to counter this problem, qualitative research was also
used to carry out detailed research.
I. Internet
5
The reason why the researchers opted to use both sources of data for research is
that restaurant industry is already well established and good practices are being
carried, so, the basic things to be relied on is the secondary data, as there is no
need to reinvent the wheel when it is already invented. But as far as introducing
an innovative service researchers have to go for primary data so that new
information can be retrieved from the market which will help them to introduce a
unique and different service.
6
1.6 Limitations of the Project
As this project is related to the restaurant industry, so, point of focus remains
around this particular industry and the factors relating to it. This project provides
a generalize idea of how to set up restaurant business as facts and figures
mentioned in this report might differ in reality. The reason why to say that the
facts and figures, which are mentioned in this report, might differ is that the
information which is gathered for this report through interviews, surveys,
questionnaires, and from different people, may have some distortion as some
people hesitate to give out information regarding their business as they have a risk
to give up their competitive advantage by disclosing confidential information and
they also try to discourage new entrants to enter the market as they will have a
risk of losing market share.
Yet, the researchers have tried their possible best to get realistic facts and figures
which are quite close to the realistic facts and figures.
The forecast in this report is based on the current market conditions which may
differ when the plan is actually implemented. There are some assumptions used in
this report, especially, in the financial analysis because true profits and costs can
only be recognized if they are incurred in reality.
7
2. Literature Review
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2.2 Evolution in Restaurant Industry
The evolution of the restaurant industry evolves
around the colonial period and as its origination was
from Europe, which later spread to America so most of
the industry got matured in European countries and
America. (http://www.zacks.com)
As time progressed, a genteel class emerged in the
colonies, and inns fashioned after those in England
were built to serve them. The inns would accommodate
guests who wished to dine only but required them to pay
for both food and lodging, as it was the custom in
England. (http://www.zacks.com)
Few changes occurred in the public hospitality field
after the colonies received their independence. By the
1820s, eating establishments were being opened for the
sole purpose of serving food and drink to the public.
The expansion of communication networks through out the
world lead to opening of cafes, lunchrooms, lunch
wagons, tearooms, cafeterias, coffee shops, diners and
full service restaurants. Some of the more important
changes, which impacted the restaurant industry,
happened in the 20th century, which included the
franchising of fast food establishments, which made
eating out more convenient and affordable. Also the
growth in the Airline industry impacted the restaurant
industry in a positive way by encouraging people to go
out of cities for vacations and have recreational
activities. Over the years as number of women workforce
increased rapidly so families with two working parents
made it common for them selves to dine out on regular
basis. (http://www.zacks.com)
9
By the 1980s there were restaurants for every
pocketbook, palate and work schedule and the restaurant
industry had reached its age of majority.
(http://www.zacks.com)
10
associated with younger adults, teens walk around with
wallets full of allowance money and young people with
first time credit cards are eager to exercise their
spending power. The marketing strategies and
advertising pitches that have been used to attract
these groups must be reassessed. In this regard the
challenge is to how a restaurant can keep up with the
products and services that these groups now seek and
expect. (http://www.fastupfront.com)
11
Going green is going strong. Green consciousness is affecting the restaurant
industry in two major ways. Restaurants are operating in a more environmentally-
friendly way by having equipment that saves water or energy or by offering
supplies and packaging made of eco-friendly materials. A small percentage of
restaurants are also offering organic or locally grown food, sustainable seafood
and meats. According to the Restaurant Industry Forecast, 62% of consumers say
they are likely to choose a restaurant based on how environmentally friendly it is.
(http://www.fastupfront.com)
Look for food on the go. With tight or hectic schedules, most consumers are
looking for ways to take the food they love with them. Popular takeout options
among restaurants include: curbside pickup, drive-thru, catering, and delivery.
Approximately half of the consumers surveyed said that they would use curbside
pickup or delivery if offered by their favorite table service restaurant.
(http://www.restaurantnewsresource.com)
3. Business Plan
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one restaurant concept from the other. Grace proposes
to achieve this by offering more variety in their menu
as compared to its competitors by serving Pakistani
food as well as the fast food items. It is believed
that Grace restaurant would have a competitive edge
over the competitors due to the varied menu. No other
restaurant in this area has been able to provide this
combination of features for their customers.
Grace restaurant is proposed to be located at Jinnah Avenue, Blue Area, next to
Mohammad Ali Jinnah University, which is the commercial and business hub of
Islamabad. It is called “Blue Area” because it was represented in a colour blue in
the original design of the planned city. A number of international companies and
local companies have their offices in Blue Area. Some buildings in Blue Area
have offices of different establishments and some buildings are occupied by
single company.
The service offered would be relaxed, efficient, friendly and courteous. The best
people would be hired, motivate and encourage them, and thereby retaining the
friendliest most efficient staff possible.
The capital structure will comprise of 36% debts and 64% equity. A mortgage
loan of 2.2 million rupees would be taken at the rate of 18%. Rest 3.8 million
would be the equity.
13
3.1.1 Mission Statement
“To be the first choice of people by exceeding the expectations of our customers
and to attain sustainable growth and maximize profit through our passion,
integrity and continuous development of our employees.”
3.1.2 Objectives
I. To provide best quality and innovative services to our customers.
II. To keep our cost low as compared to our competitors.
III. To keep our personnel motivated towards their work.
IV. To make the restaurant profitable with in one to two years.
V. To achieve high returns on investment.
VI. Commitment to environmental and social issues.
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restaurant there are multi national and local organizations and couple of
universities are also at a walking distance. Right in front of the restaurant there
are two buildings, Saudi Pak Tower and National Life Insurance building. Next to
the restaurant is Muhammad Ali Jinnah University, it is expected that a lot of
customers within the restaurant’s surroundings would be entertained. The prime
location sets the restaurant apart from the competitors. Most important is the
financial success and it is believed that this would be achieved by offering high-
quality service and good quality of food to the target market.
Jalal Rasheed
33% 34%
S.M. Mehdi Raza Zaidi
33%
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3.2.3 Start-up Summary
The founders of restaurant would be Syed Mehdi Raza, Jalal Rasheed and Sara
Sheikh. Our initial investment in the restaurant will be 3.8 million rupees, which
would be equally invested by each partner. The financial part of our restaurant
will be run by Jalal Rasheed, the management and strategy development would be
under the supervision of Syed Mehdi Raza and the human resource recruitment
and training would be looked after by Sara Sheikh. A long-term loan of 2.2
million rupees would be taken in order to start the restaurant, so that to keep the
tax payments low.
The location selected for the restaurant, has a monthly lease payment of Rs.
250,000. The area of our proposed location is around sixteen hundred to 1800
square feet. In the first year of the operations it is expected that the profits will be
low due to higher investment, which comprises mostly of fixed cost and some
variable cost. The pricing would also be very competitive in the first year in order
to attract as many customers as possible. This will give an opportunity to the
target market to make Grace Restaurant their first choice to dine out by providing
high quality of service options.
Start-up Costs
Rupees
Registration 10,000
(www.amlaw.pk)
License (www.amlaw.pk) 5,000
Rent 1,500,000
Security Deposit 500,000
Uniforms 50,000
Furniture 150,000
Electric Works 560,000
Interior Decoration & 300,000
Renovation
Sound System 35,000
Kitchen Appliances 130,000
Office Supplies 75,000
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Gas Connection 250,000
Generator 200,000
Phone Connection 5,000
Insurance 10,000
Advertising 20,000
Total Expenses 3,800,000
Start-up Cash 2,200,000
Total requirement 6,000,000
Registration
License
Rent
0% Security Deposit
0% Uniforms
25% Furniture
37% Electric Works
Interior Decoration & Renovation
Sound System
Kitchen Appliances
8%
0% Office Supplies
1%
4% 5% 9% Gas Connection
0%
3% Generator
1%
0%
Phone Connection
2%
3% Insurance
1%
Advertising
Startup Cash
Start-up Funding:
Expenses at start-up 3,800,000
Assets at start-up 2,200,000
Total funding required 6,000,000
Assets at start-up:
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Liabilities and Capital:
Start-up graph
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000 Start-up graph
1,500,000
1,000,000
500,000
0
Expenses Assets Investments Loan
3.3 Services
3.3.1 Products
The restaurant will provide good quality of food and high quality of services. The
menu has been divided in to two parts
I. Foods
II. Beverages
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In the foods section a wide variety of Pakistani food items would be offered,
which would include chicken, mutton beef, rice, vegetables and pulses. A good
variety of fast food items would be offered, which would include burgers,
sandwiches, French fries and other snacks. The food products will be prepared
keeping in mind all the hygienic standards so that the customers can have a
perfect dining out experience. All the necessity steps would be taken in order to
fully satisfy the customer’s needs and try to deliver such services to the
customers, which they really expect. During the busy summer months a special
summer menu would be offered which would include more variety in drinks.
Attractive offers would be introduced in order to promote the restaurant, such as
giving special discounts to those customers who dine in large numbers. This
would encourage people to come together in large numbers so that they can avail
the discounts and this will help to achieve economies of scale, and will help to
lower average fixed cost. Similarly in winter season when usually the business
gets down different deals would be offered, like buy two burgers get one free or
the prices of the food menu would be reduced by certain percentage in order to
attract the customers.
The kitchen staff will be hired according to the standards. Most importantly the
chefs will be hired according to the respective education in health and food.
Our detailed food menu is as follows:
Food Menu
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Bar B.Q
Chicken Boti Boneless 6 seikh Rs 350
Chicken Tikka Rs 90
Karhai
Chicken Karhai half/full Rs 210/400
Chicken Boneless half/full Rs 220/400
Qeema Karahi (Chicken) half/full Rs 220/400
Mutton Karhai half/full Rs 320/600
Qeema Karhai (Mutton) half/full Rs 360/700
Qeema Karahi (Beef) half/full Rs 220/400
Mutton Chomps half/full Rs 275/500
Mutton Boneless half/full Rs 450/850
Pakistani Handi
Chicken Qorma Rs 120
Chicken Jalfraizi Rs 160
Chicken Achar Gosht Rs 120
Mutton Qorma Rs 150
Mutton Achar Gosht Rs 150
Chicken Pasanday Rs 120
Beef pasanday Rs 120
Mutton Pasanday Rs 150
Chicken Koftay Rs 120
Mutton Koftay Rs 150
Beef Koftay Rs 120
Rice
Chicken biryani Rs 150
Mutton Biryani Rs 165
Chicken Fried Rice Rs 160
Vegetable Fried Rice Rs 130
Egg Fried Rice Rs 150
Mutton Pulao Rs 175
Chicken Pulao Rs 160
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Vegetables
Tori Rs 70
Tori Gosht Rs 100
Bhindi Rs 70
Bhindi Gosht Rs 100
Aaloo ke Bhujia Rs 70
Mixed Vegetable Rs 80
Arvi Gosht Rs 100
Daal Variety
Laal Masoor Gosht Rs 120
Kaali Masoor Rs 100
Moung Ke Daal Rs 100
Daal Channa Rs 100
Daal Channa Gosht Rs 120
Beverages
Soft Drink Rs 20
Lassi Rs 30
Apple Juice Rs 50
Grape Juice Rs 50
Guava Juice Rs 50
Carrot Juice Rs 50
Green Tea Rs 20
Black Tea Rs 20
Coffee Rs 60
Mineral Water Rs 30
Side Order
Raita Rs 30
Green Salad Rs 30
Kachumar Salad Rs 50
Russian Salad Rs 120
Roghni Naan Rs 10
Saada Naan Rs 5
Pateer Rs 5
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that profitability would be low due to competitive pricing but in the long run it is
expected that the profitability would increase as the number of customer
increases.
It is expected that the restaurant would have a steady growth after the 1 st year.
Further on many new office buildings are being constructed in Blue Area such as
Islamabad Stock Exchange Tower so we expect that there are good market
opportunities regarding the nature of our business. So it is a good opportunity to
open a restaurant in such a place where most of the companies are trying to open
their offices.
This place is also considered as one of the safest place in Pakistan. It’s because it
is in the capital city of Pakistan and it is near the Supreme Court and Prime
Minister’s secretariat, so the rate of crime in this area is relatively low as
compared to the other business areas of Pakistan.
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The Working Class: These are the people who spend half of their day away from
home as they work all day long in their offices and sometimes they have to stay
overnight so they look for a nice place to relax in their break times so that they
can have nice meal to eat. They are the people that spend the most on drinks, food
and tips.
The Students: As it was mentioned in the business idea that the target market also
includes the students of different universities, which are located, near the
restaurant. So during the lunchtime it is expected to have handsome sales from the
students of universities, as they will get their lunch at a cheaper price as compared
to other restaurants in the area.
The Families: The good place for a family dinner would be provided. Families
will come for the variety in menu and friendly services. The excellent value in
their meals will keep them loyal towards the restaurant.
3.4.2 Competition
The major competition would be with few international franchise restaurants e.g.
MacDonald, KFC and Subway, which are located within the two-mile radius of
the restaurant’s location and there are also some Pakistani restaurants near the
restaurant.
It is expected to have a strong competition from them and it will be a real
challenge to take their market share.
As MacDonald, KFC and Subway are the type of restaurants which only
specialize in the fast food products like chicken burgers, nuggets, sandwiches and
they have canned and bottled beverages so definitely Grace would be having an
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edge over them as its food menu offers a more wide range of food items which
gives people more options while dining out.
There are also some other restaurants in the area. There are disadvantages to have
a strong competition as well as advantages. Restaurants located near Grace
Location include Jehangir, Usmania, Lasania, Bar-BQ tonite, Haleem Ghar, Mr.
Cod, Dragon City, Savour Foods, Subway, Pizza hut and KFC. The number of
restaurants has made this area a well-known part of town for diners in the area.
But there are people who are tired of the franchise restaurants and would be glad
to see an alternative.
Unlike from the competition all of the food is made by the specialize chef. Grace
is proposed to have several Pakistani dishes, which separates the restaurant from
the major franchise competitors. The price remains slightly lower than the
primary competitors in order to attract more customers. Like all of the
competitors Grace will be opened seven days a week.
Following are the approximate number of restaurants and fast foods, which are
located within the 3 to 4 mile radius of our restaurant.
Name Type
Jehangir Dining
Usmania Dining
Lasania Dining
Bar-BQ Tonite Dining
Haleem Ghar Limited Dining
Mr. Cod Fast Food
Dragon City Fast Food
Savour Foods Limited Dining
Subway Fast Food
Pizza hut Fast Food
KFC Fast Food
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3.4.3 Market Analysis Information
One percent of sales cost would be allocated to advertising which comes out to
be Rs. 160,600 for first year of the operations. For the first month Rs. 20,000
would be allocated which has already been stated in the start-up cost table earlier
because more advertising would be required at the opening stage of the restaurant.
It is believed that strong advertising would create awareness among the target
market and by telling them about the different offers and variety, they would be
attracted more towards the restaurant.
After first month, the advertising expense will relatively remain same for the
remaining months of the year which will be Rs. 14,600.
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different locations for the restaurant and then selecting the most suitable one.
Then next step was to determine that what are the lease rates in the area and
whether will it be worth enough to invest in that particular location. Major
information, which was gathered through these stages, was about the following
facts:
VIII. Approximate number of students in the universities which are located with
in the nearby area.
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3.4.5 Opening day of restaurant
It is planned that the grand opening of the restaurant would be in the evening time
so that when people are off from their daily routine work they can easily
participate in the restaurant’s opening ceremony. On the opening day of the
restaurant it is expected that a large number of customers would come due to the
marketing which would be extensively done one week before the opening. At the
opening different attractive ways would be used to attract the customers to the
restaurant. The marketing sales plan is discussed in detail later in the report.
For the initial period of six months of the restaurant the prices would be very
competitive. In order to charge competitive price all the menus of the competitors
were thoroughly studies and after that, the prices were stated in the menu. The
same rates for lunch and dinner time that is Rs. 220 per person and afterwards the
rates of dinnertime will be expected to increase.
75% discounts would be offered on first day, on the second day 50% discount,
and on the third day 35% discounts would be offered.
The reason for the use of such strategy is to attract as many people as possible so
that they can get to know about the quality of the service and it is expected to give
them higher value in return to what they will pay in the first three days.
This strategy will help to cut the market share of the competitors and people will
be attracted to the restaurant. When high quality service would be provided to the
customers then they would definitely like to come again for a visit and they will
also carry a positive word of mouth for us.
The expected sales for the first day would be approximately Rs. 45,000 and after a
discount of seventy five percent, net sales would be approximately Rs. 12,000.
Similarly the same amount of sales is expected for the second day but the net
sales would be little better as the discount for the day will be 50%.
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The earning outlook for the first week doesn’t look very bright at first sight but
this strategy will help to make new customers and the things will quickly change
in the future. It is expected to get good response from the people working and
studying nearby because Grace Restaurant will be providing them with a wide
variety of menu and good quality of food.
Interest Rates: Due to the economic slow down worldwide the world economies
are in deep depression and its affects are also being felt on the Pakistani economy.
For the past one and a half year Pakistan’s economy has been severely hit by high
oil prices resulting in rampant inflation with overall inflation of 22% and core
inflation of 18%. So in order to control the high inflation rates State Bank of
Pakistan has taken strict measures by tightening the monetary policy. As a result
discount rates have risen to 14% which has significantly increased the cost of
doing business in Pakistan and due to this business activities all over Pakistan
have been severely affected.
28
Credit Availability: Due to the high interest it is becoming difficult for public
limited companies and small and medium enterprises to take further loans at such
a high cost of borrowing. Banks in Pakistan are also facing extreme challenges in
maintaining their key capital ratios due to which they have very limited credit
available to them. As the business is in the SME category, so the only option is of
debt financing. It will be a great challenge to keep the sales high and cost low. It’s
also needed to be very care full about the financial progress for the years to come
because banks in Pakistan are becoming very conservative in providing advances
due to bad debts which they are realizing now a day due to the economic crisis.
So it is very important for us have to have good financial stability so that banks do
not hesitate to provide funds to us which we will require for future expansions and
current needs.
Inflation: Pakistan has severely hit by very high inflation rates for the past few
years. Inflation increases the overall prices of good which include raw material,
fuel, commodity goods etc. So when the prices of the raw material will increase
so eventually the prices of the services will also increase. Such effect would
produce a reduction in the sales as the purchasing power of the customer decrease
when there is a rise in inflation. So it is important to look for such ways, which
will help to reduce the costs and enables to compete in the market strongly.
Political Scenario: Political stability in Pakistan has been a great issue over the
years now. Political stability is one of the very important factors, which investors
look forward in a country before investing. Political stability provides trust to the
investors regarding the policies which include tax rates; subsidies etc. so if there
is consistency in the country’s political system then it has stable policies. So the
investor does not have the fear of uncertain future. Last year was quite turbulent
in Pakistan regarding the political system but things have improved now and
future looks relatively better.
Law and order Situation: Unfortunately the law and order situation in Pakistan
has significantly deteriorated due to the ongoing war against the extremist
29
elements in the country. Many of the foreign investors have left the country and
locals are also being affected by the terrorism threats. People now-a- days are
avoiding to go out with out any purpose so it is expected to provide a safe and
secured place to the customers so that they do not feel unsecured when they are at
our restaurant.
3.5.2 SWOT
Following are the main strengths, weaknesses, opportunities and threats for our
restaurant.
Strengths
I. High quality of food offering and variety in the menu that exceeds
competitors’ offerings in quality and lower price.
III. Good relationship with the suppliers who provide high quality ingredients
on time.
Weaknesses
I. No brand awareness.
30
III. Low parking space.
Opportunities
I. Market for restaurants is growing at a very fast rate.
Threats
I. Competition is highly intense.
III. A slump in the economy of the country due to which less people are
spending money.
All menu items are moderately priced for the area. Initially low price would be
charged for the services so that people can get attracted. In this way customer
loyalty would be established. Gradually the prices would be increased while
31
constantly studying the sales pattern that how people response to the change in
price. It would be observe that if still people value the service or not and then
accordingly the process would be adjusted. It is aimed that Grace restaurant to be
the value leader and will not compromise on the quality of the service by
continuously keeping the prices on the lower side.
I. Differentiation
II. Product Identity.
III. High employee motivation.
The menu would include both fast food items and Pakistani food, which will be
made with the freshest ingredients. The management and servers will handle
every detail to make the customers special evening even more special. Great
atmosphere would be provided which would make the customers to come back
again and again.
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offered in order to promote the restaurant. After the opening, newspaper
advertisement would be done on regular basis for a certain period of time in order
to attract local residents of the area. Brochures, pamphlets, fliers and menus
would be distributed to the local businesses and in all the surrounding offices of
the area.
It is also planned to offer a free dinner to someone celebrating a birthday with the
purchase of another dinner of equal or greater value. Special discounts would be
offered on gatherings and parties where large number of people would be
encouraged to come together. It is believed that by doing such promotion
activities awareness of the restaurant among the customers would increase and
will help to generate more returns on the business.
Another promotion activity that would be used is to arrange the seminars in the
premises of the universities in order to create awareness among the students of the
universities about the new restaurant opening their area. Fliers will be distributed
among the universities. Awareness regarding how important is the hygienic food
would be created and let them know how food is prepared through camera
briefing and video clips so that they can know that whatever said is also put in
practice.
I. Direct mail.
33
II. Electronic media.
III. Brochures.
IV. Pamphlets
V. Newspapers.
34
Feed back method would be used in order to check customer’s preferences. Such
feedback helps to analyse that whether customers are satisfied or not and what
changes they would like to have. So this method is effective for the continuous
improvement of the restaurant
Monthly Sales
1,400,000
1,200,000
1,000,000
800,000
400,000
200,000
-
January March May July September November
35
Yearly Sales
20,000,000
15,000,000
-
Year 1 Year 2 Year 3
The Front Staff: The main purpose of the front manager is to take care of
advertising, waiters and ordering for service. He will also take care of the service
and will make sure that the customers should not have any complain about the
service of our restaurant and make sure the restaurant is in excellent shape. Ten
waiters will also be working under the front manager.
Kitchen Staff: The head chef will supervise the kitchen staff. Under the head chef
eight cooks, two workers for cleaning and washing will be working. The main
purpose of the head chef is to check that the food should be of good quality and
also to ensure that health and safety measures are in accordance for the restaurant
standards.
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3.7.1 Personal Plan
Management Salary
205,000 2,460,000
37
Breakeven Analysis:
Annual Fixed costs are:
Rent 1,500,000
Licences cost (Ministry of tourism) 15,000
Insurance (EFU General Insurance) 120,000
Phone, Gas and Electricity bills (Industry Average)
2,400,000
Management salaries 2,460,000
Expenses
Management Salaries 2,460,000 2,583,000 2,712,150
Rent 1,500,000 1,500,000 1,500,000
Insurnace 120,000 120,000 120,000
Advertising 160,600 176,660 194,326
License 15,000 5,000 5,000
Gas and Electricity Bill 2,160,000 2,376,000 2,613,600
Phone Bill 240,000 240,000 240,000
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Total Operating Expenses 6,655,600 7,000,660 7,385,076
Yearly Sales
20,000,000
15,000,000
10,000,000 Yearly Sales
5,000,000
-
Year 1 Year 2 Year 3
Yearly Profit
3,000,000
2,000,000
Yearly Profit
1,000,000
0
1 2 3
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4.0 Risk Analysis
There are a number of risks involved in running a restaurant and which can
influence the restaurant in many ways. The expected potential risk for the
restaurant is from the organization and the risk which already exists in the
environment.
Internal Risk: The risk within the restaurant could be the turnover of the
employees and the risk that customer might not like the food.
40
position to do so as they have established brand names
and loyal customers. Good financial strength of the
competitors will help them to compete strongly in the
pricing strategy, which might affect the business.
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restaurant to face a high level of competition. so as a
counter strategy membership cards would be offered to
the customers and more discounts would be offered to
the customers.
Annexure
Survey Questionnaires
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c. 35k – 45k
d. 45k+
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b. No
c. I don’t know
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For Employees
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7. How much would you prefer to spend on a meal / person?
a. Rs. 150
b. Rs. 250
c. Rs. 350
d. Above 350
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12. If you’re offered meal as hygienic as your home
made meal, would you buy our services on regular basis?
a. Yes
b. No
c. I don’t know
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Bibliography
category-category-Trends.html
Resource_Center/Restaurant_Tips/restaurant_trends/
of-pakistan/pakistan-hotels-restaurants-law-hotel-management-chinese-italian-list-
course-guid/
peningarestaurant/a/own_restaurant.htm
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5. Searching for: Restaurant Industry
articles/restaurantsfoodservice/restaurant-industry-trends-for-2008
49
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