Business Plan African Second Kitchen Free Essays

1Executive Summary 1.1 Description of Business This restaurant/ethnic food business plan is a candid disclosure of African Second Kitchen business proposal. Our intent is to set realistic business expectations, and eliminate any questions about the profitability of this business venture. We will write a custom essay sample on Business Plan: African Second Kitchen or any similar topic only for you Order Now Entrepreneurs have a tendency to paint the restaurant business plan with a very optimistic brush, highlighting strengths and camouflaging the risks. We, as business owners, have a vested stake and financial commitment in the success of this restaurant. Our intent is to have a definitive business, financial, and marketing plan that not only serves our need for capital financing, but is utilised as our daily business roadmap. We have taken all precautions to validate our business and financial models, focusing on realistic projections. 1.2 Finance Required The total capital requirement to launch African Second Kitchen is ?40,000 of which ?35,000 is allocated to start-up capital, and ?5,000 as business operations cash reserve. This Plan is being submitted in order to secure a Business loan for ?25,000. The loan will be used towards Equipment purchase, Design, Construction, and Operational Start-Up expenses. Owners, Mr. Ajetunmobi Ajayi and Mr. Paul Sangosanya are investing ?6,000 in personal capital. Private Investors, who will be part owners with a non-managerial interest in the business, will contribute the remaining ?9,000. As owners, our commitment is to take personal accountability for all financial debt. We have taken the necessary precautions to ensure the business is fully capitalized, and have addressed all financial shortfalls to ensure a successful business start-up. Under a realistic scenario, the company should have over ?5,000 in cash balance the third year. Even with the worst-case sales scenario, we reach a Net Worth break even at the end of Year 5. On a linear projection, the entire financial debt will be retired by Year 7. 1.3 Business Differentiation Our concept combines variety, ambiance, entertainment and a superior staff to create a sense of ‘place’ in order to reach our goal of overall value in the dining/entertainment experience. We offer fair profits for the owners and investors, and a rewarding place to work for the employees. Our unique mode of business operations which we value as keys to Success are: Unique, Innovative Contemporary: The creation of a unique and innovative fine dining atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design and decor. We will offer a fine dining experience in an electric atmosphere. Product quality: great food, great service and atmosphere. ‘Spice of Life’ Menu: The menu will appeal to a wide and varied clientele. Our eclectic menu features regional specialties in African dishes from Ikokore-Ijebu, Asharo, Pounded Yam, Eba, Lafu-isu, Lafu-Elubo, Bokoto, Abodi, Gbegiri, Egusi-Ijebu, Efo-riro, Efo-Elegusi, Roasted Meat, Suya, Fresh Fish, Crabs, to Rice, Beans and Fried Plantain . Employee Retention Focus: Employee retention and development programs will be a primary focus and success platform for this business. Through these programs, we will be able to draw seasoned and elite professionals and build a committed work force. We have budgeted for a stock option program for Chef and Management positions to subsidize a lower salary base. This lowers our immediate overhead and attracts quality staff. Cost Control Focus: We will control costs at all times, without exception. Cost Control will be an integrated function of the restaurant from the onset. Cost control is about managing the numbers – interpreting and comparing the numbers that impact the bottom line. 80 percent of the success of a restaurant is determined before it opens. Our focus is to reduce the cost of goods sold to meet our profit margin goals by managing the following crucial elements of cost: Purchasing, Receiving, Storage, Issuing Inventory, Rough Preparation, Service Preparation, Portioning, Order Taking, Cash Receipts, Bank Deposits and Accounts Payable. We will use of this restaurant/ethnic food business plan to track actual costs against our forecasts in managing the business. Due to intense competition, restaurateurs must look for ways to differentiate their business to achieve and maintain a competitive advantage. Barking Dagenham redevelopment requires a place that will fit into the ‘new look’ of the community, one that is contemporary and entertaining. African Second Kitchen will fill that niche. 1.4 Business Credibility Entrepreneurs have a tendency to paint the restaurant business plan with a very optimistic brush, highlighting strengths and camouflaging the risks. We, as business owners, have a vested stake and financial commitment in the success of this restaurant. Our intent is to have a definitive business, financial, and marketing plan that not only serves our need for capital financing, but is utilised as our daily business roadmap. We have taken all precautions to validate our business and financial models, focusing on realistic projections. We have accomplished this as follows: Our financial model is rooted in industry facts, not optimism. We have based costs on our vast industry and practical experience with similar ventures, validation against National Restaurant industry cost averages, and analysis against local Barking Dagenham market averages. We have taken a collective look at all figures to make solid business estimates. Our business concept was derived from detailed Market Analyses. Instead of building a business around a preconceived concept, we analysed the market findings and built a concept around our consumers. In other words, our business is built to service an unmet consumer ‘want’. A buffered financial plan that ensures adequate capitalization. A contingency buffer is included in the start-up cost to ensure the business is not under financed, as well as giving the business adequate funding to sustain it in the first six months of start-up. Our industry experience confirms a longer ramp-up stage for restaurants over other retail/service businesses. A common mistake for new entrepreneurs, but fully addressed in this business plan. A solid Risk Mitigation Plan. We have evaluated traditional and non-traditional risks associated with Restaurant failure and accounted for them directly in the business plan. Instead of dismissing the risks, we have identified valid mitigation strategies for each. Deep Management Experience. Our management team has 20 years combined experience, involved with over 86 restaurant openings, and deep involvement with the Barking Dagenham restaurant industry. 2The Company and its Industry 2.1 Purpose of the Company 2.1.1 Mission African Second Kitchen will be an inspiring restaurant, combining an eclectic atmosphere with excellent and interesting food. The mission is to have not only a great food selection, but also efficient and superior service – customer satisfaction is our paramount objective. African Second Kitchen will be the restaurant of choice for a mature and adult crowd, couples and singles, young and old, male or female. 2.1.2 Objectives African Second Kitchen’s objectives for the first three years of operation include: Keeping food costs at less than 35% of revenue Improving our Gross Margin from 65.41% in Year 1 to 67.10 in Year 2 These are attainable targets; our ‘stretch’ is to attain 70.73% by Year Keeping employee labour cost between 25-27% of total sales Remaining a small, unique restaurant with eclectic food and service Averaging sales between ?525,000 – ?630,000 per year Promoting and expanding the African Second Kitchen concept as a unique Midtown destination restaurant. Expanding our marketing and advertising in Barking Dagenham and in the neighbouring Boroughs to increase our customer base Achieving a profitable investment return for investors for Years 2 – 6. 2.2 Company founders and Skills sets The restaurant will start out as African Second Kitchen Limited, owned by its founders, Ajetunmobi Ajayi and Paul Sangosanyaa. Mr. Sagosanya will function as the General Manager and Executive Chef, and Mr. Ajayi as Managing Partner. Mr. Ajayi and Mr. Sangosanya have a long-standing professional relationship in the restaurant industry, stemming back to Nigeria. Mr. Sangosanya is an accomplished restaurateur, having owned several full-service restaurants. He currently owns Currys Restaurant in Ijebu-Ode, and Mr Biggs in Lagos. Mr. Sangosanya is also an international Restaurant Consultant for top organizations such as Chicken Republic and Pizza hut. Mr. Ajayi has a background in International Business Management, and is certified in Restaurant and Hotel Management. Under the management of Mr Ajayi, Mcdonalds was a feature restaurant in London, and distinguished as a top 10 restaurant while under his management from 2002 – 2010. 2.3 Competitive Differentials Unique, Innovative Contemporary: The creation of a unique and innovative fine dining atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design and decor. We will offer a fine dining experience in an electric atmosphere. Product quality: great food, great service and atmosphere. Employee Retention Focus: Employee retention and development programs will be a primary focus and success platform for this business. Through these programs, we will be able to draw seasoned and elite professionals and build a committed work force. We have budgeted for a stock option program for Chef and Management positions to subsidize a lower salary base. This lowers our immediate overhead and attracts quality staff. 3Products / Services 3.1 Distinctive Qualities 3.1.1 Services Our food will be of the finest quality and prepared with exotic flare. Customer satisfaction is the driving force behind our success. We will change our menu every 4 months, but maintain the ‘favourites’ for loyal patrons. Portions will be modestly sized, garnished with stunning presentation. The kitchen staff will have the best in culinary education and work experience. Their creative talents will compliment one another. The lounge and restaurant staff will offer the finest service in an electric atmosphere and offer customers an extraordinary dining experience. 3.1.2 African Second Kitchen Menus The menu flows together to create complementary elements. Normal dining will have a reduced Appetizer and Entree selection, while the Fusion Dim Sum menu will have special items featured only for after-hours dining. The final menu will be defined by the Executive Chef and paired with the wine menu. We have carefully selected a premium wine, beer, and alcohol listing, from which we will choose a modest rotating selection. The menu will appeal to a wide and varied clientele. Our eclectic menu features regional specialties in African dishes. The list below offers a small selection of our opening menu offerings: Ikokore-Ijebu, Asharo, Pounded Yam, Eba, Lafu-isu, Lafu-Elubo, Bokoto, Abodi, Gbegiri, Egusi-Ijebu, Efo-riro, Efo-Elegusi, Roasted Meat, Suya, Fresh Fish, Crabs, to Rice, Beans and Fried Plantain. 3.1.3 Main Dish Amala Gbegiri with roasted Meat or Fresh Fish; Pounded yam Efo-riro with roasted Meat or Fresh Fish; Pounded yam Efo-elegusi with roasted Meat or Fresh Fish; Pounded yam Egusi-Ijebu with roasted Meat or Fresh Fish; Rice with Roasted Meat or Fresh Fish; Rice Beans with Fresh Fish or Roasted Meat; Rice Fried Plantain with Fresh Fish or Roasted Meat Bamboo Chicken Satay w/ kaffir lime and Sesame marmalade 3.1.4 African Second Kitchen Appetizers Suya, Crab, Pepper soup with fresh fish; Bread basket served with Olive oil, Black Pepper, and Goat Cheese dip; Blue Crab Fritters with Mango-Tamarind sauce; Crab Cake medallions w/ Shrimp Lobster; Mixed Seafood served with couscous siding 3.1.5 Salads Mixed Greens with Spanish sherry wine vinaigrette; Asian pear and Endive Salad with Blue Cheese Walnuts and Banana Leaf; Herb Roasted Chicken with Coo-Chee (House) spices 3.1.6 Desserts Chocolate Chunk Bread Pudding w/ Bourbon Cherry sauce; Second Kitchen Chocolate Explosion – Milk, Dark and White chocolate; Second Kitchen Fruit Plate; Specialty Drinks Coffees (?2.5 – 6.5) A key source of revenue for the restaurant will be alcohol and bar sales. The restaurant will feature exotic drinks on a separate menu. Alcoholic drink specials will be featured, as well as a large non-alcoholic selection. After-hours bar service will feature selections of non-alcoholic drinks to increase bar sales during lunch and after regulatory hours. Bar pricing is competitive; prices range from ?2.50 to 4.85. Non-alcoholic drinks will be in the higher price bracket due to preparation requirements. Prices will range from ?3.25 to 6.50. 3.2 Market Analysis Summary Instead of building a business around a preconceived concept, we conducted market research and built a concept around our consumers. Our market analysis identified the following key drivers as areas of opportunity to service Barking and Dagenham’s restaurant customers: 3.2.1 Menu Variety Ethnic restaurants are increasing in Barking and Dagenham. The proliferation of international cookbooks, food magazines, TV cooking shows and imported goods offers ample evidence that London and greater London, as a whole, is currently on an international tasting spree. In fact, eating places that identify themselves as ethnic establishments numbered nearly 78,000 in 2009 and recorded sales of ?20.5 billion. Our research results do not identify any single ethnic style of restaurant as desired, but rather suggest that incorporating strong multi-ethnic influences in the menu selection will be popular. Again, variety is the underlying element for this concept. 3.2.2 The Dining Experience Customer satisfaction with food and service has been and continues to be of utmost importance, but our findings indicate that the decor, lighting, bar, and other options to improve the dining experience are also factors in customer decisions. African Second Kitchen takes all these factors in consideration for the design of this cosmopolitan restaurant. 3.2.3 Reasonable Prices This was no surprise given the economic tide. Although the restaurant industry as a whole has seen growth in 2008/2009, customers are demanding value for their dining Sterling. African Second Kitchen’s menu is priced at a mid-tier level, with no Main Dish over ?15. In addition we have an extended Appetizer selection priced between ?2.50 – ?6.50, allowing budget dining in a full-service restaurant. 4Markets 4.1 Target Market Segment Strategy African Second Kitchen intends to cater for a wide customer base. We want everyone to feel welcome and entertained. We have defined the following groups as targeted segments that contribute to our growth projections: 4.1.1 Tourists Barking Dagenham attracts many vacationers during the summer months of May through September. African Second Kitchen will be a destination dining locale, with its attractive atmosphere, international menu, and lounge. A large percentage of the tourist population are vacationing singles, here to socialize and be entertained. This is especially true for the tourist population that visit for sporting and social events – they are not interested in family establishments. These particular market segments are 25-45 years old, have disposable income, and are seeking upscale, trendy, and comfortable restaurant options. These are the types of people who frequent other restaurants and bars in the area. They are likely to spend more on experiences they perceive as unique, cosmopolitan, and sophisticated. They are also the most open to trying something new, foodwise, and will embrace our international fusion cuisine 4.1.2 The Business Person They work hard all day and often stay overnight in a strange city. They need a competent establishment that helps impress clients and prospects. Afterward, they want to relax and use the money they are making (or are expensed by their company). They spend the most on drinks, food and tips. African Second Kitchen’s cosmopolitan flair and comfortable atmosphere will be perfect for sophisticated business people, whether they live in and around Barking Dagenham or are here for work. 4.1.3 Downtown Barking Dagenham’s Couples The restaurant will have an intimate, romantic, enticing adult atmosphere that suggests â€Å"date.† African Second Kitchen will be the best date location in town. These young Midtown couples are generally very successful working professionals. In most cases they are budgeting to eat out on a regular basis, as they don’t have the time to prepare food nightly. 4.1.4 The Destination Customer Barking and Dagenham is a very ‘sectioned’ city, and consumers often look only in their own neighbourhoods for restaurant options. African Second Kitchen will break these habits, using marketing to draw customers from outside the main city limits. African Second Kitchen will be a destination restaurant. Our Destination Clients tend to be new suburbanites that miss the excitement of the inner city. They have disposable income, and will spend quite a bit on such outings. African Second Kitchen will be especially appealing to married suburban couples indulging themselves with a â€Å"date night† downtown, away from the kids. Many of these consumers are new to Barking Dagenham from larger cities, accustomed to dining within the city and at non-franchised restaurants 4.1.5 High-end Singles We will attract them with our eclectic atmosphere and layout. Our international menu, striking decor, entertainment and events, excellent service and engaging clientele will confirm the feeling of being in â€Å"the in place† in Barking Dagenham. These are the individuals that pride themselves on socializing and dining at the premier locations – The Image Seekers. 4.2 Service Business Analysis The restaurant industry is highly competitive and risky. The owners know this through their many years of experience opening, running, and improving restaurants across Nigeria and at the International Scene. Most new restaurants opened by inexperienced owners struggle or fail. However, those based on solid understandings of the market needs, and management of inventory and staff have a much higher chance of success, especially when combined with prior experience in the restaurant industry. Restaurants make money by taking inexpensive ingredients, combining them in creative ways, cooking them properly, and selling them at a much higher price. Any ingredients wasted in the kitchen are money thrown out. Any time wasted in seating customers, taking orders or preparing food is money walking away. While some entrepreneurs think that success is as simple as a good location and a trendy concept, we know the truth: To succeed in the restaurant industry, you need an understanding of the risks and financial conditions, the ability to handle enormous pressure, and the organizational skills to bring off what is essentially a giant catered party, two to three times a day. 4.3 Strategy and Implementation Summary Our strategy is simple. We intend to succeed by giving people a combination of excellent and interesting food in an environment that appeals to a wide and varied group of successful adults. We will focus on establishing a strong identity in our community with a grand opening. Our main focus in marketing thereafter will be to increase customer awareness in the surrounding communities. We will direct all of our tactics and programs toward the goal of explaining who we are and what we do. We will keep our standards high and execute the concept flawlessly, so that word-of-mouth will be our main marketing force. We will create an appealing and entertaining environment with unbeatable quality at an exceptional price. As an exciting and eclectic restaurant, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan. All menu items are moderately priced for the area. While we are not striving to be the lowest-priced restaurant, we are aiming to offer exceptional food at reasonable prices for the average restaurant diner. 4.4 Possibilities for Growth within Market Segmentation 4.5 Competition and Buying Patterns In 2009, the top ten African restaurants shared two things: cosy, hip interiors and reasonably priced, regionally specialized menus. Only one of them offered traditional â€Å"British† cooking. And half of them were located in Midtown. Our competitors are heading in the right direction, but only African Second Kitchen is based on sound market research in the local market. Barking Dagenham consumers are seeking variety and new experiences. Location is clearly important, but so is atmosphere and distinctiveness. Our marketing challenge is thus to stand out from our competitors, not only as the â€Å"new† restaurant, but as one that offers consistently high quality food, menu variety, and a unique atmosphere. Maintaining our edge will depend partly on marketing ourselves as an adult-only destination, and not a family restaurant. 4.6 Failed Restaurant Analysis: Mumbo Jumbo Mumbo Jumbo was a strong competitor that was severely impacted by the patronage demise during the Financial Crisis. I also completed an analysis of this restaurant back in 2009. Several factors led to closing of this restaurant: 4.6.1 Location: This was a very cosmopolitan restaurant located in a core business community. The restaurant was hidden in cross streets and away from the general street traffic. This was a destination restaurant and a secondary selection for the general customer base in this area. Lesson Learned: As part of this analysis, we have determined that the downtown core is not a good fit for the African Second Kitchen concept. We will limit our site selection to Barking Town Centre. Barking Town Centre is major growth area and is developing the residential infrastructure in pace with the business infrastructure. 4.6.2 Customer Segment: The primary customer base is the business person and tourist. The largest percentage of this customer segment will be looking for a restaurant in which to conduct business or a family establishment; Mumbo Jumbo would not be a primary selection in either case. Lesson Learned: African Second Kitchen target market demographics are perfectly in alignment with the Barking Town Centre’s profile. Barking Town Centre has a business core as well as a residential core. We will look to the business core for our primary daytime business, but to our residential core for our dinner and after-hours patronage. In addition, the business core will look to African Second Kitchen as a place of socialization for dinner and after-hours unwinding. Mumbo Jumbo depended on the business segment for their lunch and dinner profits, and customers who would travel from outside the Borough to eat at the restaurant – there was no static dinner segment. 4.6.3 Visibility: Mumbo Jumbo was situated on a cross street behind the main street. Lesson Learned: Although being situated on a main street is not a key in the Town centre, we will ensure that visibility is part of our site selection criteria. In addition, we will use signage and exterior decor as means to attract customers and get noticed. 4.7 Competitors At the end of the day, everyone that sells prepared meals in this Barking is African Second Kitchen’s competitor, because we all compete for the same home meal replacement sterling. However, there are two segments of the restaurant industry that are our main competition: the casual dining restaurant and the fine dining value restaurant. So, if the food and service is better at a fine dining restaurant than a casual restaurant, but price has become a factor as a result of the economic turns, where is a customer more likely to goThere is no absolute answer to the question, but the solution is to deliver the best food at the best price with the highest level of service in one establishment. This is the very definition of value and the concept at the heart of African Second Kitchen’s business model. 5 Marketing 5.1 Promotion and Sales 5.1.1 Building and Signage The most important Marketing tool that we have is the exterior of our building, and our new sign. We budgeted a great deal into the renovations and decor to generate the aesthetic appeal of African Second Kitchen. 5.1.2 Customer Service: In our years within the restaurant industry, customer service has always been the major draw for the dining clientele. Food and atmosphere is far out-shadowed by superior customer service that turns a new customer into a repeat customer. Management will demand the wait-staff provide the very best in quality services to the customer, making certain that they are content and satisfied with their dining experience. Wait-staff are thoroughly trained, and every 90 days they undergo a performance appraisal. This is part of our Employee Manual, and Operations Manual guide. 5.1.3 Advertising and Promotion: Our Advertising Plan and media schedule call for targeting customers directly through local publications aimed at, respectively, singles, couples, and destination customers. Management recognizes the key to success at this time of initial opening is extensive media promotion. This must be done aggressively in order to accomplish our service goals. A healthy budget is allocated for the first year. A primary part of the budget is allocated to create the media and customer buzz for the month prior to opening and the next three months after the grand opening. The full Marketing program is as follows: 5.1.4 Media Objectives and Strategy: Establish our image as a unique Midtown restaurant with great service, value, and great food served in an eclectic atmosphere. We will maximize efficiency in the selection and scheduling of advertisements by: Selecting primary business publications with high specific market penetration, which all reach our targeted demographics Scheduling adequate frequency of ads to impact market with menu items and promotions. Where possible, positioning advertisements in or near entertainment/food related editorial. Redirecting customers to our website to register for upcoming functions, VIP lists, reservations, and flash media promotions. Maximizing ad life with monthly and weekly publications Additionally, we will develop a consistent reach and frequency throughout the year, targeting each specific customer segment within a five-mile radius, and new ‘suburbanites,’ who still appreciate in-town dining. 5.1.5 Promotional Campaign The best way to reach our potential customers is to develop an intense advertising campaign promoting our African Second Kitchen concept of â€Å"Spice of Life.† In addition to standard advertising practices, we will gain considerable recognition through newspapers, newsletters and public announcements. Consumers will be encouraged to visit our website to be greeted with a flash media intro that highlights the restaurant, past happenings, upcoming attractions and our dynamic menu. Our periodic customer surveys and weekly menu item sales evaluations will help us to understand what advertising is working and what is not; basically, who we are reaching. Our goal is to understand our customer, measure the success of our direct marketing and media activities, and redirect advertising as effectively as possible. 5.1.5.1 Publicity Strategy: African Second Kitchen will focus on the following publicity strategies: Develop a sustained public relations effort, with ongoing contact between key editors and top-level personnel at local dining publications. Develop a regular and consistent package update program for the major target media, keeping key editors abreast of all new promotions, and menu introductions. Establish contact with editorial staff for the purpose of being included in entertainment â€Å"round-ups†Ã¢â‚¬â€œproduct comparisons in dining publications and the local papers. Produce a complete African Second Kitchen Restaurant history and menu offering piece to be used as the primary public relations tool for all target media editorial contact. This will also be effective for inclusion in press kits. 5.1.5.2 Press Release/Grand Opening: African Second Kitchen Restaurant will release a series of press releases on the Grand opening. Editorial Visitation: Leading up to the Grand Opening, and over the first 6 months of operations, we will invite the most influential reporters and editors from all local publications to African Second Kitchen Restaurant in order to evaluate our menu, service, and atmosphere. Publicity Revenues: We anticipate at least 10% of our annual sales will be generated directly from our publicity. A full media kit will be sent to all local publications, and releases on new menu items will be made monthly. Community: African Second Kitchen will look for key opportunities to pair with local community development organizations and radio stations to interface with our customers. We will continually look for local community programs in which we can participate, in order to better our community, and give something back. Marketing Program In line with our Marketing strategy, we will employ three different marketing tactics to increase customer awareness of African Second Kitchen: In-Restaurant Marketing, Public Relations Marketing, and Media Marketing. Our most important tactic will be word-of-mouth/in-restaurant marketing. This will be by far the cheapest and most effective of our marketing programs. Word-of-mouth/In-Restaurant Marketing Restaurant Night: Every first Monday of the quarter, we will have a special evening for restaurant people. This will be a perfect night for the local area restaurant’s owners, chefs and staff to get together to discuss the market and food trends and possible Co-operative efforts to promote the Barking Town Centre. This is not a conflict of interest; it is an effort to increase visibility and patronage across the Town. Monthly Dating Connection: With the increasing appeal of Internet and speed dating, the restaurant will offer a monthly dating night. In addition to food and beverages, customers can choose from an array of dating packages up for auction. Wait Area Marketing: Wait staff will service appetizers to customers waiting to be seated or on the wait list. Special Events: Live Entertainment parties Valentine’s Day African Second Kitchen Halloween Masquerade party Wine tasting weekend New Year’s Eve party 5.1.6 Public Relations Marketing Barking Hospitality Tourism V.I.P. Party: We will host a V.I.P. Dinner before the ‘Grand Opening.’ This will serve the dual purpose of training our staff and introducing ourselves to the community. The list of individuals we will invite comes from the Chamber of Commerce, Barking and Dagenham Hospitality Tourism, and Barking Town centre Development group. We want their full commitment to the restaurant to draw the tourist sterling’s. Critics’ Choice: Prior to the Grand Opening there will be two preliminary parties catering to the Media and Critics community. We will encourage the media and restaurant critics to meet at the restaurant and review the decor, service and food. This will be a preliminary review, where we will consider constructive input to make minor revisions prior to the true Grand Opening. This initial review and input will give critics and media commentary a stake in African Second Kitchen’s success, through their contributions to the final design. Brochures: We will make a brochure for the in-town hotels and business establishments to provide to their guests and staff, containing interior pictures of our restaurant, menus and prices. Government Relations: There are several Government offices in the Barking and Dagenhan area. We will approach them to cater business luncheons and private functions. This will offer us higher visibility for future functions and community events. Word-of-mouth referral is very powerful and particularly amongst the business community. Private Functions: Target marketing to businesses for regular business lunch and dinner entertaining, and private functions. 5.1.7 Media Marketing Newspaper campaign: A much targeted media campaign to obtain featured articles about the restaurant in their Living, Entertainment and Dining segments. Notices of all live entertainment segments and special features will be posted to local newspapers’ calendar announcements. Restaurant and Special Events Website: We have contracted with local design teams to deliver a high-quality, navigable, constantly updated website. Billboard Advertisement: One month prior to the opening, distinct billboard ads will advertise the launch of the Restaurant. Inner Outer City Marketing: We will budget to attract customers from the suburbs. Sales Strategy We intend to succeed by giving our customers a combination of delicious and interesting food in an appealing environment, with excellent customer service, whether on their first visit or their hundredth. Our marketing strategies are designed to get critics and initial customers into our doors. Our sales strategies must take the next step and encourage customers to become repeat customers, and to tell all their friends and acquaintances about the great experiences they just had at African Second Kitchen. New restaurants often make one of two mistakes: they are unprepared or under prepared for opening, and initial poor service, speed, or quality discourages customers from returning, or they spend all of their efforts at opening, and are unable to maintain the initial quality customers expect on return visits, decreasing word of mouth advertising and leading to poor revenues. African Second Kitchen’s sales strategy requires consistently high quality food, service, speed, and atmosphere. We can accomplish this by: Hiring employees who genuinely enjoy their jobs and appreciate African Second Kitchen’s unique offerings Continually assessing the quality of all aspects mentioned above, and immediately addressing any problems Interacting with our customers personally, so they know that their feedback goes directly to the owners Evaluating food choices for popularity, and keeping favourites on the menu as we rotate seasonal foods and specials Sales Forecast 6 Design and Development 6.1 Service Development Stages 6.1.1 Milestones The following Milestones table lists important business milestones, with dates and managers in charge of each deliverable. The milestone schedule indicates our emphasis on planning and managing the details. 6.1.2 Web Plan Summary African Second Kitchen (ASK) will have a dedicated website. It will be the virtual business card and portfolio for the company, simple, contemporary and well designed. Our site will offer our menus, prices, reviews and happenings at ASK. We will also have a monthly Paparazzi Review about what did happen at ASK to get new customers interested in our restaurant. Our website will be used to try out new offers, starting with an on-line order feature for the Sunday Market Brunch, and expanding if the concept gains favour with our customers. A customer will be able to order a selection for pickup using a credit card. Selections will be based on our pre-packaged meals available during the Sunday Market Brunch. This is also a potential for customers needing catering. The website will include email capabilities and online reservations and special events scheduling. 7 Management and Operations 7.1 Management Summary The strength of our management staff positions us for success. We have assembled a team that embraces different disciplines, accomplished professionals with expertise in all areas of the business, including marketing and restaurant management. The owners, Ajetunmobi Ajayi (Managing Partner) and Paul Sangosanya (Executive Chef), have considerable experience in the restaurant industry. In Year 2, we will hire a General Manager to handle the day-to-day Restaurant management. This will assist African Second Kitchen to grow even further. You can’t build investor confidence based on what you will do, but you can inspire confidence based on what you have done. Attached is the portfolio of past success. This African Second Kitchen’s Management team has deep roots in the restaurant segment, and have the practical experience to make this venture another great success. 7.1.1 Management Team African Second Kitchen, with more than 48 years of experience between the key officers, understands the importance of a strong management team. The strength of our management staff positions us for success. Day to day operational management will be conducted by Ajetunmobi Ajayi and Paul Sangosanya, as hands on managers. They will be advice and supported by their Advisory Board. 7.1.2 African Second Kitchen’s Advisory Board Stephen Hollier of Hollier Collier Loewenthal: Corporate Attorney John Katz of SSG Financial Services: CPA Robert Shaefer of Shafer Hospitality Services: Restaurant Consultant Mary Zela of the Zela Group: Media Public Relations consultant 7.1.3 Ownership Management Together, Ajetunmobi Ajayi and Paul Sangosanya bring over 20 years of experience in the restaurant industry to their new joint venture. Ajetunmobi Ajayi: Managing Partner (Operations, Marketing, Financial and Business Development) Mr. Ajayi brings to African Second Kitchen an accomplished restaurant background, exceptional business acumen, and a lifetime passion for the restaurant experience. Ajayi has over 17 years of business management in the Information Technology industry. Like IT, successful ventures in the restaurant industry must balance capitalizing on new trends with continual quality assessment. Ajayi’s understanding of day-to-day cash flow planning and staff management will be critical to African Second Kitchen financial success. Mr. Ajayi has a background in International Business Management and Business Start-ups, and is certified in Restaurant and Hotel Management. As co-owner, Ajetunmobi Ajayi is responsible for overall direction and operational management. Mr. Ajayi is a strong business leader responsible for strategic planning and continued growth of restaurant services and business development. In addition, Ajayi will be the management lead for all public relations, financial and investor services. Degrees, Certifications, and Professional Affiliations: MBA in International Business Management B.S. in Computer Science Certified in Restaurant Hotel Management from Ryerson University PMP (Project Management Professional) certification Member of the Midtown Alliance Business partner member of the National Restaurant Association Paul Sangosanya: Managing Partner (Executive Chef and Restaurant Operations) Mr. Paul Sangosanya is an accomplished restaurateur, having owned several full-service restaurants. Mr. Sangosanya is responsible for the concept and the daily operations management, with yearly sales targets of ?5 million. In addition, Paul is the owner of Bauhaus Bar and Nightclub, and former owner of Myth Restaurant, Ouzeri, and Kapilyo Restaurant, all financial and critical successes. Mr. Sangosanya is also an international restaurant consultant for top international organizations. Mr. Sangosanya’s contracting responsibilities for African Second Kitchen included logistics, Site and Lease Negotiations, Concept Definition, Start-Up and Financial forecast, Menu and Operations Management, as well as Implementation and Launch Management. With a degree in Economics and an accomplished career, Mr. Sangosanya contributes the experience of his past successes, and is charged with leading the Restaurant Operations, Staff Selection, Menu Definition and Training initiatives for African Second Kitchen Restaurant Lounge. 7.2 Managing Partner Responsibilities In addition to the management of day to day operations, both managers, as principals within the company, will oversee menu development, purchasing, portioning, pricing and inventory control, including approval of all financial obligations of the company. They will plan, develop, and establish customer service policies and objectives, and write, explain, and enforce an employee’s manual for all employee-related policies. Responsibilities for hiring and firing employees lie solely with the two operations managers, and any decisions in these areas will be made jointly. They will: Manage working capital, including receivables, inventory, cash and marketable securities. Perform financial forecasting, including capital budgeting, cash flow analysis, pro forma financial statements, and external financing requirements. Prepare financial analyses of operations for guiding management, including reports which outline the company’s income, expenses, and earnings. Direct preparation of budgets and financial forecasts and arrange for audits of company’s accounts. 7.3 Personnel Plan We believe the personnel plan is in good proportion to the size of the restaurant and projected revenues. The staff will include 5 full-time employees and 2 part-time employees, who will work a total of 250 man-hours per week and generate an average monthly gross payroll of ?6,500 for the first year in business. The estimated gross annual payroll of ?132,000 (including Partner Salaries) is 25% of total sales. Wage salaries for service personnel (wait staff, busboys, and bartenders) do not include anticipated tips. Kitchen: The Executive Chef will be assisted by: An Assistant Chef from a national search (1) Prep cooks/dishwasher(1) People cleaning the restaurant (1) 7.4 Restaurant Operations: Ajetunmobi Ajayi will manage the Financial Management, Bookkeeping, PR/Media Advertising, and Investor Services. Ajetunmobi Ajayi will also manage the daily Restaurant Operations. Paul Sangosanya will be the Restaurant Manager. He will be primarily responsible for daily Restaurant Operations, taking care of Wait and Bar Staff. Paul will also take lead as the Executive Chef working with the Head Chef. To help Paul, he will have servers that will work as apprentices; they take care of service and make sure the restaurant is in excellent shape Full-time Servers(2) Servers that work as apprentice (2) Full-time apprentice bartender(1). Part-time bartender (1) Full-time apprentice busboy (2). Part-time busboy(1) Operating Criteria The restaurant will be located in Barking Town Centre. The restaurant will service lunch, dinner, and after-hours dining during the week and weekends. The restaurant will operate during peak service time to take advantage of street traffic, and after-hour patronage from the entertainment facilities in the area. Service will be available during the following hours: Lunch:Monday to Saturday, 11 a.m. – 2:30 p.m. Dinner: Monday to Saturday, 5:30 p.m. – 12 midnights Sundays – Market brunch takeout only. 7.5 Important Assumptions The financial plan depends on important assumptions, most of which are reflected in the financial statements that follow. We have been cautious with our projections, and incorporate mitigation for all manageable risks. The key underlying assumptions are: 7.5.1 Economy Slow Economic Recovery. We anticipate a slow-growth economy, recovering from an economic recession. 7.5.2 Business Growth Annual Growth Rate Percentage: We anticipate modest growth over the coming years. The financials account for the following growth projections: Year 2: 6% Year 4: 4% Year 3: 5% Year 5: 4% 7.5.3 Weekly Sales Variance Saturday will typically be our best sales for the week. The sales volume for all other days is represented as a percentage relative to Saturday. Therefore our weekly sales will vary as follows: Monday: 55% Thursday: 95% Tuesday: 60% Friday: 90% Wednesday: 75% Saturday: 100% 7.5.4 Seasonal Sales Variance In Barking, October through the late season is the most productive sales period, while the summer months tend to be the slowest restaurant period. This trend is reflected in the financials though a seasonal variance as follows (where October is targeted to be our most successful sales month): June: 70% October: 100%February: 95% July: 75%November: 95% March: 85% August: 80%December: 95% April: 90% September: 85%January: 85% May: 90% 7.5.5 Industry Start-Up Fiscal Year-1 Ramp-up: Our experience in the industry confirms a longer ramp-up stage for restaurants over other retail/service businesses. Our Annual Sales Growth is based on attaining the following seating capacity percentage per dining period: Year 1: After-Hours = 53%, Lunch = 70%, Dinner = 88% Year 2: After-Hours = 70%, Lunch = 82%, Dinner = 100% (implied wait period) Year 3: After-Hours = 80%, Lunch = 87%, Dinner = 100% (implied wait period) Six-Month Start-Up Stage: As a new restaurant entry to the Midtown market, the ramp-up in customer draw is expected to extend over 6 months. This is reflected in a higher than average monthly sales variance shown as follows (Worst-case / Expected-case): Month 1: 32% / 51% Month 4: 64% / 75% Month 2: 41% / 58% Month 5: 80% / 90% Month 3: 52% / 66% Month 6: 90% / 92% Market Analysis findings are static. We assume that there are no unforeseen changes in findings outlined in the Market Analysis. 7.6 Pricing Cost Control Competitive Pricing Model: Revenue calculations are based upon competitive price comparisons and established menu values in the current marketplace. The following are baseline assumptions on Average Check Totals, and Average Seat Turns: Daily average for lunch spending is ?5.50 per person, dinner at ?17.50 per person; and ?7.50 per person for After-Hours dining (All check totals include Beverages, but not bar). Seat Turn averages are modestly estimated at: Year 1: After-Hours = 0.7, Lunch = 1.0, Dinner = 1.0 Year 2: After-Hours = 0.7, Lunch = 1.0, Dinner = 1.0 Year 3: After-Hours = 1.0, Lunch = 1.0, Dinner = 1.25 Cost Control. Cost of goods sold have been calculated as a percentage of sales and will be monitored on a daily basis in order to keep Cost of Food within the range of 31 – 33%, Bar Costs within 28 – 31%, and Cost of Beverages (Non Alcohol) below 9%. With a focus on Cost Control, we anticipate 6 months to fine tune the restaurant operations and manage our costs within the defined tolerance range. Inventory turnover and Accounts Payable: Accounts receivable turnover is calculated to be 0 days, as payment is rendered with service. Inventory is turned on a 7 day cycle as inventory is used daily within all categories, and accounts payable are projected to be 30 days. 7.7 Risk Analysis/Mitigation How do we allow an adequate start-up period and capital to launch the concept and grow our customer base in a competitive sector Our financial plan is budgeted to support the Worst-Case business scenario. We addressed the financial risk as follows: We looked at our monthly break-even. We calculated worst-case monthly financial shortfall based on the ramp-up sales percentages outlined in our financial assumptions. We budgeted operational shortfall in an operational contingency budget that we will utilize if the need arises. How do we ensure we have addressed all resource gaps, and have the right industry knowledge Owners Ajetunmobi Ajayi and Paul Sangosanya have a combined 20 years of Restaurant Management, Operations and Business Management Experience. We will be recruiting a seasoned chef (national search) whose style is in accord with the Restaurant concept and our market segment. We will be offering an equity interest to our select Chef to maintain the industry knowledge. Our Accounting service will be contracted to a firm specializing in Restaurant accounting. The current Economic slowdown and recovery state was a key consideration in our restaurant concept. How do we manage a successful restaurant in current market conditions Our original effort was to open a restaurant twice the proposed size. As we are in the midst of an economic recovery, we have scaled back the size to reduce business overhead, start-up requirements, and business operating capital. Another risk mitigation strategy has been our overall Restaurant concept. We have the menu priced at a mid-tier level allowing budget dining in a distinguished restaurant. How do we confirm that our Funding Requirement is sufficient Paul Sangosanya has an extensive background in restaurant start-up. He is currently an International Consultant for various restaurant ventures, and we will use his expertise in past projects as a comparative basis. We have leveraged our membership with the National Restaurant Association to look at industry averages for this market segment for Restaurant start-up and Operations. Additionally, we included a contingency buffer in the financial estimates to account for any potential cost variance. We have worked with our Restaurant Consulting firm to validate our cost estimates to their industry knowledge. How do we know we have selected the right location for this concept Again we will draw on the Consulting group that has the expertise in site selection and lease negotiation. In all, there are no guarantees with location, but we took a very objective approach with our concept. Instead of going in with a predefined business concept, we let the Market Analysis define the need. Based on the results, the African Second Kitchen Restaurant concept was formed specific to Barking Town Centre. Site selection was based on space, visibility, and functionality; the city grant award confirmed our decision. What if there is an additional need for Business Capital after the Restaurant has exhausted its 6-month buffer Our intent is to be a self-sufficient business far in advance of the 6-month probation period. But as we are considering all contingencies, we have looked at this risk. We have accounted for an operational contingency budget that will be used to supplement any slow periods. Our next step would be to approach our private investors for capital by extending their return on investment. We would also look to the partners’ capital reserves as another source of funds. References Barrow, C., P. Barrow and Brow, R. 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(2007) Financial Times Guides: Business Start up 2007 (20th ed), Pearson Education, Harlow Williams, S. (2006) Financial Times Guides: Business Start up 2006 (19th ed), Pearson Education, Harlow Williams, S. (2005) Financial Times Guides: Business Start up 2005 (18th ed), Pearson Education, Harlow How to cite Business Plan: African Second Kitchen, Essay examples