Business for a Restaurant - Research Proposal Example

Business Proposal for a Restaurant Executive summary The proposed business is processing/merchandise. It is currently in the planning stage. The business will deal in food and beverages. The targeted customers will buy the products because of high quality and reduced prices. The business will be located in Detroit City because of the large customer base availability. The target market is mainly the youth and middle-aged people working and living in the city. The business also targets college students. The owner will be a business manager. The owner is the holder of Bachelors degree in Business Management. The entrepreneur has relevant managerial skills that are necessary for running a business. One of the short-term goals of the business is making profit within the first two years of operation. Business concept The plan to set up a restaurant in the surroundings of Detroit City, Michigan is underway. The restaurant will mainly concentrate on selling beverages and cooked food to its customers. The youths and middle-aged people are the target market. Fast-casual services will be the restaurant’s operational strategy. The restaurant will avail delicious food to its customers in a quiet environment. The ownership of the proposed restaurant will be a sole proprietorship. The proposed business will be a fast food restaurant. Description of the business The proposed business will be a restaurant that will concentrate mainly on selling ordinary American food. The business will not run as a limited liability company because of many legal requirements needed to establish such an organization. The business will be a fast food restaurant where customers order and receive food quickly. The restaurant will have a few seats where customers can eat. There will, however, be no table-services. Additional services that will be available to customers will include doorstep or office delivery of food. The restaurant will accept cash and credit cards for payments of services offered. The current proposal is for a new business in the hospitality industry. One of the goals that the business seeks to achieve is expansion in the next two to four years. Additional services like accommodation will be available to the customers. When a new restaurant enters the market, it is expected to make enough profit that can finance the anticipated expansion. The restaurant will, therefore, implement efficient business management strategies. Tactical business spending will be the order of the day in this proposed business venture. A sole proprietor will own the business. The entrepreneur has chosen this ownership because of its simplicity. There is no sharing of all the profits from the business. The profits could then be used to expand the business rapidly. It is also easy to change the legal structure of the business. If the business expands, it can run as a limited liability company. Basic market analysis The business will be located in the surroundings of Detroit City because it has a large client base. Some of the potential customers who already exist in the city include youths working in different businesses, college students, and middle-aged people. Majority of these potential customers do not have enough time to cook for themselves during the day. These potential customers are willing to spend money on snacks, fast food, ethnic food, and comfort food. There is a challenge of price sensitivity among the potential customers. When food prices go up, they tend to prefer cooking for themselves rather than buying from restaurants. The typical customers targeted are people aged 20 to 49 years. The business targets this group because their total number was 280, 237 according to 2010 demographic data (U.S. Census Bureau). The high number will provide a reliable market throughout the year. The choice of the market is mainly based on willingness of the consumers to spend and the amount of available disposable income. The targeted customers are mostly people working in various industries. They are too busy to cook food for themselves. They, however, have enough disposable income that enables them to afford food in restaurants. A targeted customer would eat at the restaurant because of high quality food available. The restaurant will, therefore, adhere to good hygienic practices when handling or storing food. The team will also welcome the targeted customers warmly whenever they arrive so that they become loyal to the business. The targeted restaurant business is not seasonal. Most of the potential customers are people living and working within the city. The restaurant will not offer accommodation services because such services rely on the presence of visitors or tourists. The business will, therefore, avoid seasonal periods. There are other established restaurants that are already operating in the intended market. Such restaurants offer services that are similar to what the proposed business intends to offer. Competition is, therefore, expected to be high. The business will, however, cope with the competition through price reduction. The reduction of food prices will bring another challenge of lower profit. The management will overcome such a challenge when the number of customers increases. The intended market is sensitive to changes in commodity prices. The total number of customers will, thus, increase if they learn about the affordable prices offered by proposed restaurant. The restaurant will offer another incentive of delivering food to customers to their rooms upon request. The restaurant will also give its customers chances for booking food in advance. The business will provide unique food to its customers upon request. Most restaurants in Detroit charge 15 to 30 dollars for an average meal. The proposed new prices that the restaurant will charge will range from 12 to 27 dollars. The reduction will attract more customers who will be interested in spending less and getting quality services. The business will still make a profit provided the total number of clients increases. Management structure A sole proprietor will own the restaurant stated earlier. The sole proprietor, who owns the business, will be the manager. The owner has the necessary managerial skills in the hospitality industry. The management expects that the business will have fewer challenges because it will be small. The manager is a holder of Bachelors degree in Business Management. The restaurant’s manager will be in charge of all operations and finances. The manager will be the only supervisor of all employees. The restaurant will employ four staff on a permanent basis. There will be an accountant, two chefs, and two servers. The accountant will be responsible for keeping the restaurant’s books of account. The chefs will cook the food in the restaurant and clean the rooms. The Servers will provide customers with food and clean utensils. Financial risk assessment All restaurants require much money to start and keep them running during the first few months of starting. The expenses incurred in the first few months or years usually exceed the income. The manager will use most of the required fund to pay salaries, food, and bills. The owner, however, intends to overcome such risks by securing enough starting capital for the business. The sources of funds will be personal savings, grants, and loans from commercial banks. The business owner will put in place proper plans that can secure enough starting capital. Location of the restaurant The restaurant’s location will be Detroit City, Michigan. Detroit is suitable because of its proximity to the targeted customers. The 2010 census indicated that the city has a total population of 9,883,640 people. The total number of people aged 25 to 34 years was 1,164,149 (U.S. Census Bureau 2010). The restaurant targets these potential customers because most of them are employed in different industries. One of the advantages of starting a restaurant in Detroit is the ready market available. The high population of the city creates a large customer base for the business. The chances of succeeding within the first year of doing business are high. The second benefit is the availability of skilled labor. Most people joining the job market have the relevant skills in the business. The highly educated potential employees will reduce the cost of staff training. The third benefit is the availability of necessary facilities like housing. The high cost of renting houses is a major disadvantage of starting a restaurant in Detroit City. The high cost incurred will reduce the restaurant’s profit margin. Such reductions may delay the future expansion of the business. The second disadvantage is the region’s declining income output. In 2008, the GDP of Detroit was $ 193,374 million. In 2009, the GDP dropped to $ 179,060 million. It rose in 2010 and 2011 to $188,953 and 199,378 respectively (B.E.A 2011). The fluctuating output of the city implies that future economic prospects are unpredictable. Some potential customers may lose their jobs as a result of companies going bankrupt. The total number of customers buying food from the restaurant will decrease. Restaurant’s menu The restaurant’s menu will include variety food and drinks. Some of the food and drinks will include salads, burgers, sweets, and a variety of beverages. The table below will be a sample menu. Main Menu Item Price ($) Salads Uptown Salad 6.10 Farmhouse Salad 5.20 A Wreck Salad 4.99 Chickpea Salad 4.99 Specialty Big Burgers Grilled Chicken 3.50 Mexican Burger 3.50 Salmon Burger 3.50 Turker Burger 3.50 Bacon Burger 3.50 Sweets Freshly Baked Cookie 0.99 Ice Cream Sandwich 2.50 Dream Bar 1.20 Cherry Chocolate Granola Cookie 0.99 Dinner Fish Fry Flounder Meal 5.99 Jumb Shrimp Meal 5.99 Beverages Soda 0.99 1.50 Tea 0.99 1.50 Fresh Brewed Coffee 0.99 1.50 Juice (Apple, Grape, and Orange) 0.99 1.50 Restaurant’s kitchen layout The kitchen will include the following bakery equipment: scales, cases, slicers, racks, mixers, tortilla grills, work tables, and heated cabinets. The kitchen will also have other equipment such as strainers, adapter bars, mixing paddles, steak weights, garlic presses, brushes, skimmers. The business will also require additional equipment such as bucket openers, pasta grabbers, crushers, measuring spoons, openers, cheese graters, kitchen spoons, vegetable peelers and corers, and colanders. There will be necessary equipment such as scrapers, thermometers, funnels, scrapers, ladles, mashers, measuring cups, tenderizers, scoops, sieves, skewers, spatulas, turners, and whips. References Bell, C., Ketchum, L., and Eric, J. (2008 March). Steps to Success for Rural Entrepreneurs: Writing Your Small Business Plan. University of Alaska Center for Economic Development. Retrieved April 28, 2014from http://ced.uaa.alaska.edu/publications/manuals/FINALBusinessPlanHandbook.pdf Bell, C., Ketchum, L., and Eric, J. (2008 March) Steps to success for rural entrepreneurs: starting a small restaurant. University of Alaska Center for Economic. Retrieved April 28, 2014from http://ced.uaa.alaska.edu/publications/manuals/FINALRestaurantHandbook.pdf US Department of Commerce, (2011). Economic Growth Continues Across Metropolitan Areas In 2011. Bureau for Economic Analysis. Retrieved April 28, 2014 from https://www.bea.gov/newsreleases/regional/gdp_metro/2013/pdf/gdp_metro0213.pdf US Department of Commerce: United States Census Bureau. Retrieved April 28 2014 from http://www.census.gov/popfinder/?s=26 Read More