Business Description
"The assemblage" is a start up New York-based restaurant. It is based right in the heart of the commercial center and will aim to attract corporate workforce during the lunch hours and families during the night. It aims to connect with its target market by offering a high quality and diverse menu at affordable costs. The restaurant will propose high-quality and unique items so as to utilize maximum local resources for not only business growth, but also market growth along with channel expansion (Riebesell, 2001).
"The assemblage" is not only owned but will also be managed by its chief investor. The restaurant will have a humble inauguration and will aim for the reasonable aims and objectives set out in the business proposal herewith. "The Assemblage" aims and objectives for the initial three years comprise (Riebesell, 2001):
Enhancing one-unit each year.
Maintaining the cost of food below 35% of revenue.
Maintaining workforce expenses below 18% of revenue.
Maintaining sales amid half a million dollars each year (Riebesell, 2001).
"The Assemblage" will be different from other restaurants in the area in not just its location but also the services it offers to its customers. The owners plan to propose a special and unique mixture of quality eating experience at affordable costs together with a healthy entertainment and leisure atmosphere. This way the customers will have a pleasant eating experience as well as view their favorite sports games (Riebesell, 2001). "The Assemblage" start-up costs have been described in table 1 and 2 below:
Table 1: Start-up
Requirements
Start-up Expenses
Legal
$1,000
Stationery etc.
$1,000
Other
$1,000
Total Start-up Expenses
$3,000
Start-up Assets Needed
Cash Balance on Starting Date
$88,000
Other Current Assets
$50,000
Total Current Assets
$138,000
Long-term Assets
$0
Total Assets
$138,000
Total Requirements
$141,000
Table 2: Funding
Investment
Investor 1
$25,000
Investor 2
$15,000
Total Investment
$40,000
Current Liabilities
Accounts Payable
$1,000
Current Borrowing
$0
Other Current Liabilities
$0
Current Liabilities
$1,000
Long-term Liabilities
$100,000
Total Liabilities
$101,000
Loss at Start-up
($3,000)
Total Capital
$37,000
Total Capital and Liabilities
$138,000
Industry and Market Analysis:
The growth rate of the industry and number of new entrants into this field can be summed up as follows: "Restaurant industry sales are expected to reach $566 billion in 2009, with the industry employing 13 million individuals in 945,000 restaurant-and-foodservice outlets nationwide, according to the National Restaurant Association's 2009 Restaurant Industry Forecast released today. The Forecast projects that while overall restaurant industry sales will increase in current dollars by 2.5% over 2008 figures; the numbers translate to an inflation-adjusted decline of 1.0%. Despite the economic downturn, the industry will remain a cornerstone of the economy, representing 4% of the U.S. gross domestic product and employing 9% of the U.S. workforce, and restaurants will continue to adapt to the latest menu trends and consumer preferences (Hensley and Donohue, 2009)."
It is clear from the aforementioned facts that the inauguration of "The Assemblage" will be taking place during one of the worst economic and financial breakdowns in the American history. Therefore, it has to take into consideration the financial position of its target market, its pricing and promotion strategies and tactics and the marketing channels it uses to market its products and services.
Competitive analysis
"The Assemblage" will offer high-quality food throughout the week for not only dinner but also lunch and breakfast. The restaurant will be closed for "Thanksgiving" and "Christmas" only. All items on the menu will be self-serving buffet and their pricing will be fixed.
Marketing strategy
All those restaurants, which offer meals, will be our competition. However, to be precise, 2 sections will give us tough competition: firstly, the informal dining and steakhouses and family-steak-restaurants.
We aim to compete with them by utilizing the "local-media" along with "local-store-marketing" program. Our main focus and funds will be directed towards "local-store-marketing," which will be followed by radio and print media. Using other forms of the media will be considered at a later stage in the business (Bryson, 1995).
Our primary focus will be directed towards enhancing awareness in our neighborhood. Our marketing programs will allow people to understand values and services. Our buffets will not only be fairly-priced but also highly standardized. This will ensure top-quality "word-of-mouth" advertising (Daniels and Radebaugh, 1998).
Market data
"The Assemblage" aims to target diners of all ages and all income levels in the neighborhood. We will package and present our buffets so as to entertain all sections of the society. We have decided to take this option for several reasons. Firstly, the size of our restaurant will be able to entertain almost 500 people and with such a large space we need a huge market to fill it up. Secondly, Americans of all age-groups dine-out regularly (almost 4 times every week, according to last year's statistics.) thirdly and lastly, this figure is only going to increase with time.
Selling tactics
Contending against both "informal-dining-steakhouses" and "family-steak-restaurants," we will be offering these benefits: (1) Low pricing for complete buffets, (2) customers will not be giving tips since the restaurant will be self-service, (3) giving speedy service to all customers at all times, (4) offering variety in meals all the way through the week and (5) diners can watch their favorite sports during their meals.
The sales annual projections for the next 3 years are summed up below in table 3 below.
Table 3: Sales Forecast
Unit Sales
2010
2011
2012
Meals
22,822
35,000
45,000
Drinks
11,415
17,500
22,500
Other
1,000
Total Unit Sales
34,477
53,000
68,500
Unit Prices
2010
2011
2012
Meals
$15.00
$15.00
$15.00
Drinks
$2.00
$2.00
$2.00
Other
$10.00
$10.00
$10.00
Sales
Meals
$342,330
$525,000
$675,000
Drinks
$22,830
$35,000
$45,000
Other
$2,400
$5,000
$10,000
Total Sales
$367,560
$565,000
$730,000
Direct Unit Costs
2010
2011
2012
Meals
$2.00
$2.00
$2.00
Drinks
$0.50
$0.50
$0.50
Other
$1.00
$1.00
$1.00
Direct Cost of Sales
2010
2011
2012
Meals
$45,644
$70,000
$90,000
Drinks
$5,708
$8,750
$11,250
Other
$240
$500
$1,000
Subtotal Direct Cost of Sales
$51,592
$79,250
$102,250
Management and Operations plan
The entire initial-management will be dependent on the originator of the restaurant. He, however, will acquire a little back-up from others. Additional assistance will be taken as the business grows and flourishes. Additional workforce will only be taken into consideration when the time is right. This will increase responsibility of the initial workforce as they will have to perform many tasks, which in turn will give higher returns to investors in a short span of time (Davis, 1984).
Personnel Plan
The comprehensive yearly personnel estimates for the first 3 years are given in table 4 below (Davis, 1984):
Table 4: Personnel Plan
2010
2011
2012
Manager
$60,000
$65,000
$70,000
Hostess
$42,000
$45,000
$50,000
Chef
$54,000
$60,000
$65,000
Cleaning
$30,000
$35,000
$40,000
Waiters
$72,000
$100,000
$130,000
Other
$24,000
$52,000
$55,000
Total People
8
10
12
Total Payroll
$282,000
$357,000
$410,000
Human resources plan
At present, accounting along with payroll operations will be carried out by a bookkeeper, whose service will be hired through a contract. Later on, after such an expense can be managed internally, we will stop outsourcing both accounting along with payroll operations. We also plan to hire marketing director, procurement director, regulator, human resource manager along with an administrative assistant (Davis, 1984).
Financial data
Our financial plan is founded on cautious approximations and suppositions (Riebesell, 2001).
Important Assumptions
Table 5 outlines our "break-even analysis," Our break-even analysis is presented as "per-unit revenue," "per-unit cost," along with "fixed costs (Riebesell, 2001)."
Table 5: Break-even Analysis:
Monthly Units Break-even
14,028
Monthly Revenue Break-even
$146,453
Assumptions:
Average Per-Unit Revenue
$10.44
Average Per-Unit Variable Cost
$8.34
Estimated Monthly Fixed Cost
$29,459
Projected Profit and Loss:
The annual approximations of profit and loss for the next 3 years are given in table 6 below (Riebesell, 2001):
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