Restaurant Concept Project - Term Paper Example

? “The Sailing Boat” – Fine Dining & Nightlife Hong Kong & Cantonese Food in San Jose, California Prepared for of Restaurant Management HMT410 DeVry University – Online Prepared by Student: Prepared on 05 18 20111 TABLE OF CONTENTS Introduction 3 Concept Development 4 Site Selection 8 Market Analysis 10 Competition Analysis 10 Licenses & Approvals 13 Design, Furnishings, & Equipment 14 Menu Development 15 Employment of Key Personnel 16 Personnel Training 17 Conclusion 18 References 20 Introduction For the HMT 410 Course Project, I have developed a restaurant concept called “The Sailing Boat” which will bring the taste of my home town- Hong Kong, Cantonese food to the downtown region of San Jose, California. “Sailing Boat” is the symbol of the traditional Hong Kong “junk” ships which are a symbol of the old traditions of the port city. Hong Kong is famous by importing and exporting products, and the “junk” ships are still found there today, though not often in the same ornamental styles as the traditional vessels. This restaurant project involves the purchase of an antique, 19th Century Hong Kong “junk” boat, and deconstructing the boat’s elements to become the decoration for a restaurant interior. The decor will follow a design developed by Robert D. Henry Architects in New York, but transform it so that the antique wood of the ship and the old carvings of the hull will be prominently displayed. These elements will be used throughout the restaurant interior, for example in the main bar area and the greeting lobby. The design is for an upscale Chinese restaurant in the downtown San Jose area, near to the HP Pavilion. The area includes many of the five-star hotels of San Jose, as well as being located near to San Jose State University. The combination of business, tourism, and retail shopping in the neighborhood is well established. The plan is targeting a second floor location on South First Street in San Jose, above an existing cafe-restaurant establishment. The Sailing Boat restaurant will also have bar, lounge area, and dance floor so during the weekend it can set up like a club in order to attract more customers. Contemporary Hong Kong Junk in Traditional Style + Source: (Travel with a Challenge, 2011) Concept Development The traditional Hong Kong junk boat is known worldwide as a historical symbol of the city, yet it is a tradition that is rapidly being superseded by new technologies. The Sailing Boat restaurant is based on an upscale Chinese restaurant plan with a specialization in Hong Kong and fusion cuisine. The restaurant will involve the purchase of an antique Hong Kong junk boat and then deconstructing it into a series of panels that will be finished and restored to be used as the side panels in the restaurant. Similarly, the masts, sails, deck, and interior elements will be taken apart from the antique boat, restored, and used to build the bar, restaurant decorations, and main lobby / greeting area. The panels of the ship will be reconstructed in the restaurant interior following a plan developed by Robert D. Henry Architects in New York, and will involve a renovation of the location as well as specialist crew for the ship preservation work. Restaurant Interior - Robert D. Henry Architects, New York (Interior Design News, 2011) The antique wood from the ships sides will be reformatted into panels approximately 10 to 12 feet square that will provide the covering for the walls behind the tables in the dining rooms, lounge, bar area, reception, and lobbies. Contemporary wood floor tiles will be used and the antique Hong Kong junk ship’s elements will be used in the corners, to build buffet elements, as the bar, and in the lounge are as a special theme. The antique Hong Kong junk ships typically had an elaborately carved set of railings, hull, and upper deck that will be perfect as the backdrop of a restaurant. By abstracting the ship elements into a modern restaurant design, the decor of The Sailing Boat restaurant is reflective of the same modern approach to Hong Kong cuisine established in the menu. “Junk / Port View” - Artist: Tingqua, Guan Lianchang (Porter Design, 2011) The painting above shows an example of the antique, 19th Century Hong Kong junk that The Sailing Boat seeks to purchase to use as a theme for the restaurant. As these ships will be more than 100 years old, they are no longer operable and can be well preserved as antique elements in a restaurant design. The rarity of these old ships is contrasted with the state of disrepair in determining the cost. If purchased in Hong Kong, an authentic ship of this style would likely cost between $135,000 and $350,000 USD depending on the condition and extent of detail in the woodcarvings. The sea cargo by container charges for shipping the disassembled boat to San Jose from Hong Kong is estimated at $25,000 to $35,000, not including the local disassembly and preservation work required by the project. Nevertheless, the boat can be disassembled and finished into the basic parts to be used in the restaurant construction in Hong Kong and then shipped to America via sea cargo for the most efficient process of construction. “L'Agreable” - Artist: P. Hippolyte Boussac (Porter Design, 2011) The painting above shows the detail of the antique Hong Kong junk boats in ornamentation, and this is the wood carving that The Sailing Boat restaurant wants to preserve and use in the bar, lobby area, main dining room, and lounge. These ship elements should be cut into sections in Hong Kong, and then restored and finished there so as to preserve the authenticity. In this manner they can also be packed safely and shipped in container via sea cargo to San Jose for the restaurant. The ships sides should be cut, sanded, and finished into square panels that can be used for the restaurant walls. Site Selection The main intention in site selection for The Sailing Boat restaurant was to be as close as possible to the HP Pavilion in downtown San Jose. After some research into possible locations, I decided to choose the second story of 96 South 1st Street in San Jose. In this location, there is a cafe downstairs, but we would lease the upper floors of the building (2 or 3) in order to build a restaurant, bar, with small dance floor and lounge facilities. The advantage is that this location was previously occupied by an Asian restaurant downstairs, and also has an abundance of downtown traffic for clients. 96 South 1st Street, San Jose, CA, United States (San Jose Blog, 2011) Clients would enter from the stairs or elevator access to the second floor reception and greeting area, where they would also see the wood carvings from the antique Hong Kong junk boat in the lobby. This is powerful branding and will build a memorable experience for business clients for many years to come. We hope to make the restaurant an establishment where Silicon Valley professionals come to celebrate business deals, and also cross-promote to tourists, students on dates, the art gallery and theatre crowds, and other special events that happen in the downtown San Jose area. The map below shows the location as centered between the HP Center, Adobe HQ, San Jose State University, and City Hall. This central location will be important to maintaining an upscale and world-class client list, reservations, and special events. The stand out and memorable aspects of The Sailing Boat’s decor will make it a preferred choice for area professionals who need a special venue for nights out in San Jose. The location is therefore in the center of the downtown arts, theatre, and business districts. Neighborhood Map of 96 South 1st Street, San Jose, CA, United States (Google Maps, 2011) Market Analysis The advantage of this market area is that it represents one of the most expensive business districts in America; the downside of this being the expensive costs for a restaurant to start-up and operate in the area. One weakness is a business plan that relies on rent and lease for the property location and not ownership of the building. Because of this, The Sailing Boat would like to negotiate a long lease, such as 5 to 10 years in the location, in order to guarantee ROI. Unfortunately, many restaurant start-ups fail, therefore the location and long term lease need to be balanced by the short-term limits on business and operations. For example, the restaurant will need to generate over $850,000 per year over 5 years to be successful, cost manageable, and sustainable in the location. The opportunities are primarily related to Silicon Valley and the boom and bust cycles of economic growth in the region. It is important to rebuild out of recessionary times and to hope to see social restaurant business increase with the business cycle in the region. The threat is that after the large investment in the ship, infrastructure, kitchen supplies, furniture, etc. the restaurant is not profitable enough to cover costs or sustain operations. Nevertheless, upside business could lead to over $1,000,000 per year in the region with $3000 in business per day. Competition Analysis The Sailing Boat is closely related to the downtown location and is taking over a space where another Asian restaurant recently went out of business downstairs. The competition is thus for upscale business clients, private parties, corporate events, office gatherings, etc. for HP, Adobe, Facebook, Apple, and other Silicon Valley employees. The main restaurant competition in the HP Pavilion area for The Sailing Boat are the restaurants (MetroActive, 2005): La Pastaia: 233 W. Santa Clara St., San Jose. Paolo's: 333 W. San Carlos St., San Jose. Poor House Bistro: 91 S. Autumn St., San Jose. Q and Brew: 735 The Alameda, San Jose. These restaurants were selected because of their competition for the same neighborhood restaurant clients and contracts as The Sailing Boat. The following competition matrix will be used to compare the Sailing Boat with the competitors using a scale of 1 to 10. Competitors Benefit Our Operation 1 La Pastaia 2 Paolo's 3 Poor House Bistro 4 Q and Brew Decor, Nightclub, Bar, Restaurant Fusion Hong-Kong Specialty Chinese Food served with Modern Fusion Friendliness, Service Quality, and Atmosphere. All in one location for private parties, business gatherings, or open nights. Chefs from Hong Kong and American-Chinese reinterpret classical Chinese cooking for upscale Silicon Valley diners. The Sailing Boat keeps the highest standards in service quality with magazine-quality interior design based in history. 5 7 6 6 8 7 6 6 5 7 6 8 Financial Analysis As the financing was available from a billionaire owner, the start-up restaurant idea was presented as a way to build a “million dollar” location for professionals in Silicon Valley and will use $1 million USD in the start-up operation. The business plan for the restaurant relies heavily on local companies such as HP, Adobe, and other in Silicon Valley who do extensive business deals but also need a place to socialize outside of the office, relaxing, dancing, drinking, and eating while also possibly doing business negotiations. In performing a financial estimate, $10,000 USD per night is taken to be the upper limit of business on a busy weekend night, while $2500 to $3000 may be the gross income on a slow day. The restaurant is designed for around 100 customers, but can support up to 155 due to the area limitations. The two busy periods are lunch and dinner, with the club and bar operating with the restaurant in special events and weekends primarily. Sources of Capital (Start-up Income) Owner (Mr. Billionaire) Start-up Investment $1,000,000 Uses (Start-up Expenses)   Purchase of Antique 19th Century Hong Kong Junk Boat $185,000 Shipping of Boat to USA $35,000 Processing and Finishing the boat in China $25,000 Onsite Construction & Development Costs (San Jose) $50,000 Kitchen equipment, Utensils, Serving Plates, Dining Ware $50,000 Furniture, Lounge, Lobby, Tables, Chairs $50,000 Delivery Van for Market $20,000 Insurance (5 years policy) $25,000 Licenses & Legal $10,000 10 Year Lease – 5 Years Advance, $5000 p/Month (2 floors) $300,000 Total: $750,000 The financial plan involves spending $750,000 in advance paying for a 5-year lease, buying the ship, establishing the needed licenses and insurance, as well as decorating the restaurant and building the kitchen. The plan will keep 25% of the start-up investment grant in savings to cover any needed costs due to over-run of budget in day to day operations or to meet payroll, etc. Under this plan the restaurant would repay the $1 million start up costs in 10 years, with the payment of $100,000 per year on the balance and the interest paid in full in a final payment at the end. As investors and owners, our team is willing to contribute a $100,000 down-payment towards the $1,000,000 loan if it cannot be secured as a grant. Licenses & Approvals The Sailing Boat restaurant will be required to acquire a business license, as well as restaurant, bar, and nightclub permits as required by San Jose and the State of California. We have earmarked $10,000 to a legal representative to prepare this in full according to the requirements of the government and the insurance companies. The legal form will continue to represent the restaurant with a $10,000 retaining fee paid annually for any administrative details required by the Alcoholic Beverage License, Food Service Permits, etc. The restaurant will need to be prepared always for health inspections and keep high standards of cleanliness throughout daily operations with this concern. Restaurant Interior - Robert D. Henry Architects, New York (Interior Design News, 2011) Design, Furnishings, & Equipment The Sailing Boat will occupy two floors above street level in downtown San Jose. The restaurant will be completely redecorated with antique woodwork from the Hong Kong junk ship from the 19th Century that was purchased as a heritage item in Hong Kong, restored, and exported. The panels of the boat in plain wood will be used for the sides of the restaurant while the more elaborate woodcarvings will be used in the reception lobby and bar area. The masts, sails, and other parts of the ship will be used to add further abstract elements to the modern composition, which is driven by deconstructionist modern interior design. The blueprint below has been developed for The Sailing Boat and shows a one floor design. The second floor will be modified in parts to create higher ceilings in the restaurant and dance area, while also including an apartment area on the second floor for the owner and family. Restaurant Design: Blueprint design & layout for ‘The Sailing Boat’ restaurant. (InetGiant Inc., 2011). Menu Development The menu at The Sailing Ship restaurant is to follow the interior design by reinventing or deconstructing traditional Hong Kong food in a modern style. This will include employing master chefs who have knowledge of both traditional Hong Kong and modern Western cooking styles. Presentation is very important in this restaurant environment, as we are seeking the five-star business clients for a three martini lunch, as well as the tourists in the neighborhood during the daytime. As the neighborhood is full of young professionals, and there are innumerable great choices to eat out in the region, The Sailing Ship wants to create a memorable experience form the decor and the way the food is plated in a modern style. This includes an experimental menu where Hong Kong meets Silicon Valley in a fast, healthy, and elegant menu that includes a wide mixture of meats, salads, vegetables, noodles, rice dishes, and traditional Chinese food reinterpreted with an artistic flair. Employment of Key Personnel The Sailing Ship will employ one master chef with a focus on innovation in the menu. This Chef must be Chinese or Chinese-American from Hong Kong with a degree in modern Western cuisine and kitchen management experience in a 5 star restaurant minimally. This chef should be willing to commit for the first 5 years of the start-up and renegotiate thereafter with an option for 5 more years in contract. In consultation with the master chef, three managing chefs will be selected and employed. The salary for the master chef will be around $75,000 - $85,000 per year, plus performance bonus and profit sharing. The managing chefs will earn $55,000 to $65,000 per year. The rest of the kitchen staff will include 3 to 5 kitchen helpers, rotated onto two shifts of employees per week. There will be a further 3 to 5 dishwashing and clean-up staff. The wait staff should include 10 to 15 people per shift and the bar staff 3 to 5 people. The wait staff should earn $15 per hour for service positions, but waiters and waitresses will earn the minimum plus tips. The tip generating positions will be required to donate 10% of their tips per night to the service staff to be shared evenly. Kitchen help and service staff will generally be paid at around $15 per hour + tip sharing each shift before leaving. Wait staff will be allowed to leave 30 minutes to 1 hour before service and clean-up staff in order to make the tip-sharing system more efficient. Personnel Training Kitchen employees will be chosen and trained by the master chef, who will also hire a clean-up and produce delivery manager for the team. The managing chefs will work with the master chef directly to create and plate the dishes, and they will also help select and train the members of the team. Chefs, assistant chefs, and prep cooks will all need to be experienced in Hong Kong food with training in Western cuisine and plating methods, as well as an eagerness to learn and experiment with food while maintain the highest standards of professionalism in the product. The personnel should be motivated to achieve standards of quality and excellence in the food, and consistently do this on every plate. The training program will focus on harmonizing select staff with the order of the master chef in the kitchen, so that the over-all plan of reinterpreting Hong Kong food in a modern Californian style can be made completely efficient even in busy situations. Restaurant Interior - Robert D. Henry Architects, New York (Interior Design News, 2011) Conclusion The Sailing Ship restaurant seeks to host private business parties for 100 guests at $10,000 for office related gatherings of Silicon Valley professionals. These private parties would occur approximately 25 days per year, generating $250,000 in income. These events allow corporations to easily bill for gatherings of employees for special events, and involve the private use of the restaurant for 100 people for one night, with a Chinese buffet, drinks, DJ, dance floor, and lounge area. On other days, between $2500 and $3500 is targeted as daily sales from food and beverages. Through this minimum and maximum of private parties and daily operations as a restaurant, The Sailing Ship restaurant hopes to gross $1,000,000 USD per year in sales and with a 35% margin after cost yield around $350,000. Of this, $150,000 would go towards savings for the lease and insurance payments at the five year mark, and around $100,000 would go to taxes, leaving approximately $100,000 in salary for the owner per year for the business management. The business needs to generate an additional $135,000 in profit every year to repay the loan plus interest over ten years. In summary, a location such as San Jose and Silicon Valley where so many tech start-ups and corporations are based is perfect for an upscale restaurant such as The Sailing Boat that offers Hong Kong cuisine reinterpreted in a modern decor that is based on a 19th Century traditional junk boat that has been historically turned into art and paintings for the interior design. This business plan has the opportunity of being fun and interesting to manage in all aspects, including a trip to Hong Kong to buy the historical boat and restore it. References Google Maps (2011). 96 S First St San Jose, CA 95113. Google Maps, 2011. Retrieved May 18, 2011 from InetGiant Inc. (2011). Restaurant blue prints. Retrieved May 18, 2011 from Interior Design Ideas (2011). Design interior restaurant in New York – SHO Shaun Hergatt Restaurant. Retrieved May 18, 2011 from MetroActive (2005). 5 Places to Love Restaurants Near the HP Pavilion. Metro, Silicon Valley's Weekly Newspaper, July 20-26, 2005. Retrieved May 18, 2011 from Porter Design (2011). Marine. Retrieved May 18, 2011 from Santos, Joshua (2005). E&O Trading Company is Being Replaced by a Mediterranean Restaurant. The San Jose Blog, TUESDAY, MAY 10, 2011. Retrieved May 18, 2011 from Travel with a Challenge (2009). Chinese culture showcased with Hong Kong's Meet the People program. Retrieved May 18, 2011 from Read More