Small Business Management and Entrepreneurship Term Paper
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Small-Business Management & Entrepreneurship
The fruition of many years of dreaming and planning will be realized through the opening of a restaurant in the Tri Cities area. Opening any business requires serious planning and calculations, yet the special needs of a restaurant are particular to the idea that many restaurants have gradual and long-term returns on investment. Start-up costs are often very significant with hard goods and food costs making up a very large output, not to mention procuring a location and either a purchase or lease and either building or remodeling space to meet the needs of the business and procuring the real estate.
Breaking even is often a guiding light at the end of a very long tunnel, between six months and two years depending on the region, and turning a profit often takes much longer. Another consideration is of coarse that restaurants usually do not provide a sustainable wage for business owners and/or shareholders until more usually two years from the start up date.
Personal sacrifices and planning can often make the difference between the success and the failure of a new restaurant.
Understanding that this is the case for food service establishments makes the planning and development of a sustainable and current business plan paramount to the success of any endeavor in the industry. Any financial contributions and/or procurements must be substantial enough to both establish the business and to provide operating costs for at least a year if not two. Additionally, personal sacrifices and saving must be a part of my own goal set because it is unrealistic to expect a rapid return on the hours I will contribute to the initial development and day-to-day running of the business.
Understanding the niche that will be filled is essential and a long list of corresponding information must be focused and clear. The business chosen for development is a healthy seafood restaurant that will serve a moderately aged crowd of professional restaurant goers.
The environment will be contemporary and display a popular open kitchen environment, where patrons will be able to fully view the preparation of their food.
The location will be chosen based on both suitability of the actual building and on the location in accordance with similar and like minded businesses, preferably not restaurants. Possibly upscale street level specialty shops that maintain business hours that generally end near seven or eight PM and serve patrons similar to the desired patrons of the restaurant, those people in the thirty to sixty-year-old professional demographic.
The following research shows the older half of that demographic and some reasons why they patronize or continue to patronize restaurants.
Baby boomers spend a significant portion of their food budget on food prepared/served away from home -- that is, restaurants. Consequently, our interest in this research was also in the reasons baby boomers choose specific restaurants in comparison to seniors.
As Table 2.4 shows, responses by the two groups differ in eleven cases. Three factors stand out. First, seven in ten (70.4%) baby boomers consider
(Moschis, Lee, Mathur & Strautman, 2000, p. 35) the restaurant's comfort for socializing, compared with about half (49.4%) of the elderly Americans. Seven in ten (70.1%) baby boomers also consider the restaurant's proximity to their homes or places of work, compared with nearly half of the elderly (47.7%). Finally, recommendation of same-age peers is valued by six in ten (61.8%) baby boomers, compared with four in ten (42.6%) older Americans.
Half (51.5%) of the baby boomers consider the restaurant's location in relation to other types of retail outlets patronized, compared with one third (33.9%) of the elderly sample. Personnel assistance is more important to baby boomers (34.3% vs. 24.7%). As expected, senior/member discounts are more attractive to older adults because senior discounts are available only to the aged.
(Moschis, Lee, Mathur & Strautman, 2000, p. 36)
All of these factors will become consideration in the planning stages of the business development. Though they are not the only factors they are good starting point for the initial ideas of location, menu, atmosphere and advertising.
A location with an existing restaurant that caters mostly to lunch patrons would be an acceptable. The issue of parking will also be a strong factor in choosing a location. As the primary focus of the business will be evening it may be acceptable to have at least some shared parking with adjacent businesses, yet primary off street parking for at least seventy five percent of the restaurant's full capacity
would be preferred.
The sight will be conveniently located via twenty-minute drive from the city and close to the several local colleges, universities. It will also boast a location close to the airport, which will bring tourism trade and hotel guest trade.
The building itself will be upgraded to meet the needs of the location. The age of the building will be a factor in the choice as well as other factors associated with the open layout and the previous use, which could dictate the infrastructure of the building and its suitability to restaurant use. Due to the fact that some construction must take place funding must include both an amount determined to be an accurate construction estimate and the amount needed to purchase or lease that actual building or land. Equipment and decor, both stationary and movable will be considered in this part of the funding proposal as well.
The menu will consist of a light fresh seafood fare that will be served from four PM to eleven PM daily, excluding Christmas. The sight will also house a comfortable and contemporary bar, serving beer, wine and liquor with a general focus on Asian imports that lend well to a lighter seafood menu.
The dinning atmosphere and menu combination will be somewhere between a classic sushi bar and an Italian bistro. The dress of the establishment will be semi-formal to casual with an emphasis on business casual.
The majority of this body of work will consist of a nine-point comprehensive business plan consisting of mission, industry analysis, supplier information, personnel demographic, financial plan, plans for production and operation, credit policy, legal considerations and a list of critical risks and concerns associated with the potential threat to the success of the business. Through this comprehensive plan the answers to many potential issues of the business will be given substantial forethought.
Point I: Mission & Purpose
To provide healthy dining in a modern relaxed and upscale non-smoking dining environment while exploring the tastes of light and simple seafood dishes through creative preparation and presentation.
Point II: Industry Analysis
Recent trends in culinary arts are highly focused on the issues surrounding the association with health and consumption. In the past restaurant fares have often been associated with the decadence of a rare and special night out, starting with but a few establishments and growing in numbers to over one hundred thousand, in the United States. Recently, there has been a bold increase in the dependence of the consumer public on restaurants, as a major source for the meeting of their daily nutritional needs.
On a typical day in 2003, the restaurant industry should post average sales of nearly $1.2 billion.
More than 54 billion meals will be eaten in restaurants and school and work cafeterias in 2002.
Highest Household Per Capita Food-Away-From-Home http://www.restaurant.org/images/research/glance3.gif
Restaurant-industry sales are forecast to advance 4.5% in 2003 and equal 4% of the U.S. gross domestic product.
The restaurant industry provides work for more than 9% of those employed in the United States.
The average annual household expenditure for food away from home in 2000 was $2,137, or $855 per person.
In 2003, the restaurant industry's food-and-beverage purchases will exceed $150 billion. Between 1970 and 2003, restaurant-industry sales will post a compound annual growth rate of 7.2%.
National Restaurant Association 2003 (http://www.restaurant.org/research/ind_glance.cfm)
The exponential growth of the industry is testament to the level of consumer demand that has developed in the last century.
Due to this and the recent adoption of health conscious consumerism the new focus of the restaurant industry is on the development a higher awareness of both nutrition and decadence. The industry is attempting to meld the concepts of special occasions and the ability for the fare to be nutritionally sound and still very pleasurable and inviting.
The new goal of the restaurant industry and the education system that supports it has become focused on taking healthy and nutritious food and presenting.
Recent trends have also focused on other issues of health in relation to food consumption. Atmosphere has become a focus also. Many municipalities have adopted non-smoking public space ordinances, yet the restaurant industry was a leading factor in that trend as more and more restaurants adopted their own non-smoking or smoke-free spaces earnestly attempting to provide comfort and greater enjoyment for consumers.
Last month, by a two-to-one margin, Florida voters agreed to ban smoking in nearly all indoor workplaces. One of the few exceptions was "stand-alone bars," meaning bars not located in restaurants. The city of Chicago is…
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