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Planning for Opportunity: Arabic Restaurant in Swansea - Essay Example

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The author of this paper "Planning for Opportunity: Arabic Restaurant in Swansea" will make an earnest attempt to evaluate the management and staff needs of the business entity in order to ensure professional and effective performance of all duties involved…
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Planning for Opportunity: Arabic Restaurant in Swansea
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Running Head: ARABIC RESTAURANT IN SWANSEA: BUSINESS PLAN Contents Page Summary 3 2. Business overview 4 Introduction Current position Growth plan 3. Business strategy 5 Business tactics Strategic issues 4. Marketing 7 SWOT analysis Market research E-commerce and technology Products and Pricing Distribution channels Credibility and risk reduction 5. Team and management structure 11 Staff experience and Training Advisors Management systems 6. Financial budgets and forecasts 14 Profit and loss forecast Cash flow forecast Capital expenditure budget Summary In the recent past, there is an increase in problems associated with economic and financial predicaments among members of the society. As a result, I have decided to form a team aimed at rolling out an entrepreneurial project. This paper introduces the preferred project and appropriate marketing and business strategies employed to ensure accomplishment of its objectives. It also evaluates the management and staff needs of the business entity in order to ensure professional and effective performance of all duties involved. According to Thomas (2010), a detailed marketing plans indicates mechanisms used in executing the sales practices of products and services. In order to acquire reliable information, a marketing research coupled with SWOT analysis was conducted. The plan also contains various financial forecasts that support the financial and economic feasibility of the selected project. Introduction Wojciech and Stefan (2011) say that the most appropriate way of addressing the issue of economic insecurity is to encourage development of entrepreneurship attitudes among members of the society. Consequently, I have made up my mind to initiate an entrepreneurship program comprising of efforts provided by five members of my group. This program seeks to establish an Arabic restaurant within the England’s city of Swansea. Russels and Andreas (2011) insinuate that this business plan serves as an indication of the business’ feasibility level. The restaurant, which will be named Almajles, will be a traditional center for Arabic cuisine in the city. In his regard, I will serve Arabian food and other typical Arabian products like sheesha bars. The restaurant will be selling several dishes including jerrak, Arabic coffee and soft drinks. It will be located in Marina, Swansea. This neighborhood proved suitable since it hosts many students. In this case, we will be able to bring Arabic dishes close to student population, which is the targeted market for the restaurant. Current Position The current position of Arabic dishes and services market remains at an unexploited stage within Swansea. The city comprise of a cosmopolitan population with a significant proportion of Arab-related people. These people remains interested in purchasing and consuming Arabic dishes served from traditional styled settings. According to Riley (2007, actual state of affairs shows that Swansea has few restaurants serving traditionally made Arabic dishes. Therefore, investment in this section of hotel industry may prove economically viable. On the other hand, most students across academic institutions comprise of youth within the age bracket of 18-32. This demographic segment prefers consumption of fast food characterized by low cholesterol levels. In this context, the large student population will provide a ready market for the restaurant’s products. Therefore, current business environment in the city presents numerous entrepreneurial opportunities. Growth Plan With the observed number of potential customers among the student population, the restaurant seeks to create and maintain high but sustainable product sales. In this case, the restaurant targets annual sales amounting to $25,000. In order to achieve this projected growth, the management and hotel staff will devise mechanisms meant to convert new customers into loyal ones. In addition, restaurant strives to attract a minimum 300 customers monthly. This strategy will allow regaining of starting capital within a period of three years. In the process, product sales will increase by 10% annually because of increasing cash inflows. Subsequently, additional inflows from sales present opportunities for growth and expansion of the restaurant. Business Strategy Business Tactics In order to ensure effective inception and implementation of the business plan, the team will adopt various business tactics. These tactics involve professional and expert information that ensures coordination of all sectors involved in production and delivery of Arabic products and services within the restaurant. In this context, the team will adopt procedural steps through the development process. According to Ulwick (2005), appropriate tactics include carrying out a detailed and objective quest into the virtues and challenges that stands on the way. One challenge on establishing the restaurant includes competition from firms offering similar services. In order to tackle competition, we will locate the restaurant close to academic buildings. This brings products and services close to students. In addition, I will employ tactics like take away food packages and entertaining service provision within the premise. This will serve the purpose of influencing purchase decision to the restaurant’s advantage Strategic Issues All these stages of gaining a competitive advantage will be realized through strategic execution of individual job sections. Some of the strategies meant to ensure success of the project include expansion measures, contingency measures, and strategies to shield the restaurant from external market forces. In this case, we resolved to expand the employees’ base in the next one year to increase production volume and to increase sales through marketing activities. Truitt (2002) insinuate that the most appropriate contingency strategy for the next one year includes acquisition of sophisticated cooking systems for the kitchen. Such systems will serve the purpose of producing quality food in a timely manner and at the same time saving energy and kitchen space. Contingency measures adopted include timely stocking and replenishment of food store. This strategy will shield the restaurant from fluctuation in raw material prices within the supply chain. Marketing SWOT Analysis As a team, we acknowledge the fact that cooking Arabic dishes and setting up sheesha bars may not encounter problems that will influence the expected returns of the project. The aspect that determines whether the project succeeds will be the marketing steps employed for advertisement and provision of these services to consumers. In this context, we appraised the restaurant’s success level by conducting a SWOT analysis. Among the project’s strengths include availability of sustainable supply of raw materials for food recipes, shortage of Arabic cuisine restaurants in the city and the entrepreneurial skills of team members (Riley, 2007). Opportunities include potential for expansion attributed to the expected increase in sales and loyal customer base. In addition, another possible opportunity might be gaps left by competing firms in an event of failed commercial strategies in e-marketing. Kay (2009) insinuates that failure of other firms in marketing strategies will shift consumers’ attention towards other alternative restaurants. On the other hand, the project has weaknesses in the aspects of start-up capital. Lack of enough capital may hinder purchase of hotel logistics and appropriate business premise. Imminent threats include entrance of other enthusiasts into the Arabic food market. This will lead to a concentrated market within the segment; hence stiff competition to the business. Upon appraisal of the project through SWOT analysis, we can ascertain that the business has a high success factor. In this regard, the positive elements of strengths and opportunities outdo the negative factors of weaknesses and threats. Market Research In order to establish an objective and reliable assumption regarding the level of success on the business, we conducted a scientific research on the potential consumer markets. This research facilitated acquisition of information on the probability of finding a ready market for the restaurant. The research exercise adopted a quantitative methodology involving data collection from primary sources through survey exercises. The survey process employed questionnaires directed towards acquiring the knowledge and preference of Arabic cuisine in residential areas of Swansea. As a research team, we visited social functions and residential estates to establish the appropriate segment for the business. In order to obtain data, the survey required respondents to answer questions contained in a questionnaire. A copy of questionnaire used is provided at the end of the paper. Kolb (2008) says that in order to ensure acquisition of quantitative data type, the survey method maintained the use of Likert scale in the questionnaires. In this case, a respondent was supposed to provide a response in accordance to a five-score system of the Likert scale. Upon completion of the data collection exercise, the team analyzed the information and gained insight in the level of preference of Arabic cuisine within the selected segment. Data analysis on the major questions yielded statistical figures that predict the relationship between the relevant variables under consideration. In one question, residents of Swansea’s estates were required to respond as to whether they acknowledge that Arabic dishes contain no cholesterol. The scale was established as follows; (1: Strongly Agree), (2: Agree), (3: Neutral), (4: Disagree), (5: Strongly Disagree). This question received an average score of 1.57. This mean score falls between agree and the strongly agree scales. This means that most potential customers acknowledge the fact that Arabic dishes are typically low in cholesterol. On the other hand, we conducted a Pearson correlation coefficient to establish the relationship between preference of low cholesterol food and the age bracket of residents. As a result, we obtained a value of 0.46. Kolb (2008) assert that the value means there is a significant positive relationship between the two variables. As age increases from teenage bracket, students develop elevated preference to low cholesterol diet. Based on this, we concluded that there is a ready market for the Arabic restaurant within the town’s academic settings comprising of college and university students. Technology and E-marketing The research exercise facilitated the team’s understanding on the presence of actual methane market in the society. At that juncture, we considered thinking about channels that can allow us reach a considerable number of consumers through advertisements. In this case, use of internet marketing was the most convenient and affordable mode of sending the message to other potential customers. Social networks especially Twitter and Facebook could enhance significant advertisement progress. In addition, the idea of opening the restaurant’s website would serve the purpose of improving the use of electronic marketing. The website will provide mechanisms through which we can respond to customers’ frequently asked questions. Howard (2010) says this will ensure creation of a sustainable relational marketing for the restaurant’s food products. This technology will be convenient since authorized team members could access it from any place through a computer or an internet enabled mobile phone. E-commerce will reduce advertisement costs spent on TV and increase chances of accessing new markets. In this regard, adoption of appropriate technological tools will facilitate growth and improvement of the business. Products and Pricing Key products sold within the restaurant will include typical Arabic dishes ranging from desserts to soft and hot beverages. All dishes will be prepared from a strict adherence to traditional Arabic recipes. Strict recipe guidelines will ensure authenticity of meals; hence promoting the originality of the restaurant. In addition, all meals within the restaurant’s premise will be prepared and served in a clean and excellent manner. According to Riley (2007), main dinner plates will include Kabsah, mandy and haneeth. The menu will also include detailed descriptions of improved and customized services like hookah, sheesha and jeerak. On the other hand, the beverage page on the menu will have Arabic tea, Arabic coffee, soft drinks and other preferred traditional drinks from Arabic descent. Product prices will range from $3-15 on major dishes and $1-7 on hot drinks and other beverages. The most price-friendly but economically viable product will be sheeesha. In the restaurant, the product will go for $10.50, which makes it the cheapest sheesha around Swansea. Delivery Channels Product delivery will be major factor within the project’s marketing process. This aspect goes hand-in-hand with the elements of credibility and risk management. Delivery of Arabic dishes to personal residence will be the sole responsibility of the company. Specialized packaging equipment will be adopted to ensure hot food stuffs reach a customer as it was served. This will facilitate product mobility and increase chances of venturing into a new market segment within residential estates. With respect to the aspect of marketing, relationship with the customers will remain the main objective of the restaurant. This means that Almajles marketing practices will strive to boost credibility and ethical conduct in all its undertakings. In this context, we will ensure timely serving of dishes at the hotel tables. In so doing, we will avoid situations where customers wait longer to be served than they expected. Timeliness in delivery translate to a positive reputation for the restaurant; hence acquisition of a loyal customer base. Credibility and Risk Reduction In order to affect this, we will ensure regular contact with customer to learn when they would like to experience different types of products and services from the hotel. In this context, management will conduct regular collection and analysis of complaint and complement responses dropped by customers in designated and confidential boxes near exits. With respect to risk prevention, the management will ensure regular maintenance and checks on the restaurant’s furniture. Moreover, it would be appropriate to replace rusty and broken utensils to prevent possible injuries to customers. In this case, customers will be free from risks; hence holds a positive reputation towards the restaurant’s customer relationship practices. This will automatically translate to increased sales and sustainability of the hotel’s customer base. Team and Management Structure Staff experience and Training The five-member team will act as the restaurant’s central management structure. In this case, other employees and staff members will be hired to perform various specialized duties within the business premise. The staff team will include one full-time restaurant manager with coherent knowledge and skills in hotel and hospitality management. The business also adopts one full-time accountant and one casher for management of financial and monetary proceedings. In addition, the staff will comprise of two sheesha artists, two full-time kitchen chefs and three full-time waiters. Management will organize relevant training sessions for the staff members, especially the chefs on matters to do with Arabic recipes. Additional part-time employees will include security officers and electrical technicians in case necessity arise. At this juncture, each employee will have specific duties and responsibilities, all aimed towards realizing the business goals of the restaurant. This technique of setting predetermined responsinilities for the workforce will ensure accountability and professional execution of services. According to McCann and Margerison (2005), academic skills possessed by these individuals will ensure efficient and professional service delivery within the business environment. Advisors In an event that management deems fit to source additional expertise assistance, we will contact a team of professionals. Typical expert assistance includes lawyers in case of legal processes and business mentors in case of requisite seminars and supplementary training sessions. Requisite training sessions will focus on improving skill-set of employees, especially chefs and waiters. Burns (2013) say that experts will provide the required professional services that will serve the purpose of facilitating smooth execution of business and management services by the workforce. In order to maintain a consistent professional service delivery, we will acquire assistance from a joined professional body comprising of lawyers, accountants, and chemical engineers. This will enable uniform and optimal payment of service fee because employees of a single body will provide professional services. Management Systems Service efficiency and competence will be realized through integration of appropriate technological systems. Within the kitchen department, chefs will read instructions from printed manuals posted next to kitchen counters. Riley (2007) agree that procedural execution of cooking undertakings will ensure producing of authentic delicious Arabic meals. Therefore, provision of instruction manuals will ensure that workers follow all cooking steps in order to acquire dishes fitting the desired market standards. Accountants and marketing departments will utilize suitable software. According to McCann and Margerison (2005), software use will ensure timely and accurate production of financial reports for stakeholders including capital providers and other financing bodies. On the other hand, marketing systems will ensure optimal utilization of e-commerce. All these systems will translate to better service delivery. Financial Forecasts Almajles Restaurant profit and loss forecasts for the first two years Year 1 Year 2 Total expected sales $25,000 $27,500 Less variable cost $6,000 $6,500 Gross Profit $19,000 $21,000 Gross profit margin 76% 76% Annual fixed costs Employees salary $1,000 $1,000 Advertising $200 $200 Professiona fees $700 $700 Interest charges $500 $500 Kitchen materials leasing $1,200 $1,200 Cost of food stock $2,000 $2,000 Depreciation of kitchen ware $100 $100 Cost of restaurant rent $2,000 $2,000 Total fixed cost $7,000 $7,000 Net Profit $12,000 $14,000 The table above reflects the projected restaurant’s profit and loss accounts for the first two years of its operations. From the table, both years reflect a large gross profit margin. According to Crosson and Powers (2010), the margin is a representative of the variable cost with respect to the total sales made within the specified period. This means that the process variable cost comprises of a small percentage of the total cost of the business. In this context, variable cost includes expenses on daily food stock purchases and labor hours. The figures obtained means that production managers are at a better control of variable costs. On the other hand, fixed costs remained constant in the two periods. From the statement, fixed cost remains less than the gross profit. This leads to realization of profits in every given fiscal year. In fact, the statement shows a substantial increase in net profits between the two years. In this regard, the restaurant will realize significant net profits increase in its operations. Almajles Restaurant capital expenditure budget for the first three years Year 1 Year 2 Year 3 Total Item Kitchen equipment purchase $12,000 $3,000 $200 Purchase of hotel furniture $8,000 $6,000 0 Table utensils $800 $400 0 Purchase of energy sources $5,000 0 0 Total $25,800 $9,400 $200 $35,400 Stone (2003) says that the capital expenditure budget indicates the manner and magnitude in which restaurant managers will spend the available capital resources. Statement above indicates that the project will spend more than $25,000 in purchase and installation of requisite infrastructure. This means that the restaurant needs a total capital exceeding $35,400 for inception and commencement. Within the second year, capital expenditure reduces to $9,400. This is because management and capital expenditure team bought all major cooking and room equipment. Additional capital will be required to purchase more furniture and kitchen equipment due to expanding production and food delivery services. In this regard, the restaurant will require a total of $35,400 for the first two years. However, additional capital for expenditure may be sourced from sales. In this regard, the capital expenditure budget indicates the amount of capital to be provided by financing institutions as a loan or grant for the project. Almajles Restaurant cash flow forecast for the first two years Cash Inflows Year 1 Year 2 Cash Receipts (sales) $25,000 $27,500 Accounts receivable 0 $300 Total Cash receipts $25,000 $27,800 Estimated outflows Food cooking cost $4,000 $4,000 Delivery and administrative $2,000 $2,300 Interest expense $400 $400 Income taxes $1,000 $1,200 Purchase additions $21,000 $200 Total cash outflows $28,400 $8,300 cash increase(decrease) ($3,400) $19,500 balance at year beginning $0 $300 balance at the end of year $400 $600 Minimum cash balance $900 $900 Total payments ($2,100) $21,300 The cash flow forecast statement highlight the expected amount of transactions that will involve payment and receipt of cash. The first year has a negative total cash inflow of $2,100. This means that the company will not realize a profit or any net cash inflow within the first year. Hodgetts and Kuratko (2008) say that the main reason for this trend is because of small sale volume and absence of any closing balance in the cash flow account. In this case, the restaurant will not realize a cash inflow within the first year because huge capital was spent on purchasing kitchen equipment and furniture. However, the second year realized a cash inflow of $21,300. Within this period, sales increase and there was an opening balance in the account proceeding as account receivable from the previous year. The statement means that the restaurant will start to realize a positive cash flow in a span of two years. In this regard, members of the team can start paying for loan interests immediately after the second year. This explains why capita borrowed will be cleared by sales profits within the first three years. A copy of the Questionnaire i. Do you acknowledge that Arabic dishes contain low cholesterol (1: Strongly Agree), (2: Agree), (3: Neutral), (4: Disagree), (5: Strongly Disagree) ii. Use of Arabic sheesha has health benefits. (1: Strongly Agree), (2: Agree), (3: Neutral), (4: Disagree), (5: Strongly Disagree) iii. Consumption of fast foods and Arabic dishes utilizes time in academic settings (1: Strongly Agree), (2: Agree), (3: Neutral), (4: Disagree), (5: Strongly Disagree) iv. One should be willing to try out dishes from other cultural background across the world (1: Strongly Agree), (2: Agree), (3: Neutral), (4: Disagree), (5: Strongly Disagree) Reference List Burns, J. (2013). CRS and good business: Challenges and Opportunities. Swansea: Swansea University Press. Thomas, C. (2004). Entrepreneurial Skills. Indianapolis: John Wiley & Sons Publishing. Thomas, C. (2010). Recognizing Opportunities and Generating Ideas. Indianapolis: John Wiley & Sons Publishing. Thomas, C. (2007). Key Enterprise Themes. Indianapolis: John Wiley & Sons Publishing. Russels, G. & Andreas, M. (2011). A Simple Path to Sustainability: Green Business Strategies for Small and Medium-sized Businesses. Pittsburgh: ABC-CLIO, Ltd. Ulwick, W. (2005). Business Strategy Formulation: Theory, Process and the Intellectual Revolution. Washington DC: IAP. Nigel, B. (2007). Marketing Research: Tools & Techniques. London: Oxford University Press. Thomas, C. (2010). Business Plan Essentials. Indianapolis: John Wiley & Sons Publishing. Riley, G. (2007). The Oxford companion to Arabic cuisine. London: Oxford University Press. Rhonda, M. A. (2003). Successful Business Plan: Secrets & Strategies. Berlin: Eugene Kleiner Publishing. Truitt, W. B. (2002). Business Planning: A Comprehensive Framework and Process. Vancouver: Quorun Books, Ltd. Crosson, V. S. & Powers, M. (2010). Financial and Managerial Accounting. New York: Cengage Learning Publishing. Stone, P. (2003). Understanding Financial Accounts: Understand the Principles and Practice of Accounting. Montreal: How to Books Ltd. Hodgetts, M. R. & Kuratko, F. (2008). Entrepreneurship: Theory, Process, Practice. New York: Cengage Learning Publishing. Kolb, B. (2008). Marketing Research: A Practical Approach. Pittsburgh: SAGE Publishing. Kay, J. (2009). Foundations of Corporate Success: How Business Strategies Add Value. London: OUP Oxford. Stefan, M. & Wojciech, W. (2011). Entrepreneurship: Values and Responsibility. Toronto: Transaction Publishers. McCann, J. D. & Margerison, C. (2005). Team Management: Practical New Approaches. Chicago: Management Books 2000. Thomas, C. (2012). Creative Thinking. Indianapolis: John Wiley & Sons Publishing. Summers, R. & Hobson, P. N. (2001). Methane production from agricultural and domestic wastes. Austin. University of Michigan Press. Howard, F. G. (2010). Industrial Training and Technological Innovation: A Comparative and Historical Study. New York: Taylor & Francis. Petty, W. & Moore, C. M. (2006). Small Business Management: An Entrepreneurial Emphasis. New York: Cengage Learning Publishing. Read More
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