Business Plan for King's Cross Delite - Essay Example

Business plan for King’s Cross Delite Table of Contents Executive Summary 4 2. Business Analysis 5 2 King’s Cross Delite 5 2.2 Legal structure of the business 6 2.3 Mission statement 7 2.4 Overview of the industry 7 Porter’s five forces 9 3. Marketing strategy 10 3.1 Marketing Mix 10 3.1.1 Product 10 3.1.2 Price 11 3.1.3 Place 11 3.1.4 Promotion 12 3.1.5 People 12 3.1.6 Physical evidence 13 3.1.7 Process 13 3.2 Competitor analysis 13 3.3 Target market 13 4. Management Plan 14 5. Financial Plan 14 Source of finance 14 Break-even Analysis 15 5. Recommendations 16 6. Conclusion 16 Reference List 17 Bibliography 18 Appendix 19 1. Executive Summary The business plan highlights the essentials that are required for the success of the restaurant business. King’s Cross Delite is a multi-cuisine restaurant, which will be set up in King Cross, London, near the railway station so as to attract more customers. The restaurant will use home-made spices that have the ability to add flavours to the dishes. Moreover, the prices are reasonable and the quality of the food items is not compromised. The business is established by three partners, who have equal share in profit or loss of the business. The business plan indicates that the restaurant business is a success as the revenue is predicated to rise over the years. 2. Business Analysis The business analysis section of the business plan gives emphasis on the details of the restaurant that is going to be set up in London. It highlights the products and services that are to be served and offered to the customers in London. Hence, an overall blueprint of the business is provided in this section. 2.1 King’s Cross Delite King’s Cross Delite will be a multi-cuisine restaurant in London, whose main aim is to provide delicious and healthy foods to the customers. The restaurant will be established near King’s Cross railway station. The reason for choosing such a position is that it is the most populous and attractive place in London, where thousands of passengers come to the city and leave the city every day. The passenger includes students, office goers, tourists and businessmen. A multi-cuisine restaurant in such a place will not only attract customers but also increase the number of customers daily. The restaurant will have a new theme, which is not tried by any other restaurant in London. The customers, who will be visiting the restaurant, will get the feeling that they are inside a sea. The watery background will be provided in order to present a calm and comfortable climate for the customers while consuming their food. It not only creates a clear ambience but it will also give a feeling of having food under water. The water will have several fishes, not large one, but small and familiar ones along with water plants and insects. If the business plan is recognized to be feasible for developing the restaurant business, King’s Cross Delite will be inaugurated in January 2016. Less than a year time will be required to build the structure of the restaurant and kitchen. The most important part of the restaurant will be its kitchen; it is an open-kitchen, which will allow the customers to see how the dishes are prepared and whether the chefs are maintaining a hygienic process for preparing the dishes. The restaurant will also provide home delivery and take away facilities to the customers. King’s Cross Delite will offer multi-cuisines to the customers, which are prepared from fresh herbs and home-made spices. The speciality of the restaurant will be its spices, which will be prepared by the restaurant itself and thus there will be no artificial additions, which are harmful for health of individuals. Hence, the restaurant will aim at providing healthy and tasty food to the customers, which will not only refresh their taste buds but also make them fit for their daily life. The business will be operated in partnership basis. There are three partners, Mr. X, Mr. Y and Mr. Z; all of whom have equal share on the business as their contribution towards building the restaurant is also same. They will be the owners, who will be looking after the employees and staffs. The recruitment of the employees is solely based on merit and how they present themselves to the customers. Hence, the owners will be very cautious when choosing the candidates appearing for an interview, as they will become the face of King’s Cross Delite. The behaviour of the selected candidates should be monitored in such a manner that it does not harm the feelings of the customers. 2.2 Legal structure of the business The structure of the business defines its legal responsibilities, which are done through paper works. The paper works are done in order to manage tax payments and profit of the business. There are basically three types of business such as limited compact, sole trader and business partnership (Crown, 2015). King’s Cross Delite will be a partnership business; the partners are Mr X, Mr. Y and Mr. Z. The responsibilities of ordinary partnership business are discussed henceforth. The three owners will enjoy the profit that is incurred from the business and at the same time they are also responsible for loss, if the business does not do well in London. The owners will also be responsible for the purchases that are made during the course of business, may it be stock or the equipments (Crown, 2015a). Apart from the above mentioned responsibilities, the partners will have to send a partnership Self-Assessment tax return at the end of each year. They also have to pay the income tax on the profit that is incurred from the business (Crown, 2015a). 2.3 Mission statement King’s Cross Delite will be mainly responsible for the introduction of a new theme in the history of restaurants in London i.e. water theme. Hence, the restaurant will have such an environment where the customers will enjoy the feeling of consuming food underneath a sea. An apporpriate mission statement for the restaurant will be “Enjoy delicious and healthy food at the heart of sea”. 2.4 Overview of the industry According to the report presented by British Hospitality Association (BHA), hospitality sector is regarded as the fourth largest sector in the UK. The turnover in this sector is observed to be £92 million and the Gross Value Added (GVA) is £24 billion during 2013 and thus it accounts for about 18% of the manufacturing in the UK (BDO, 2014). Productivity has improved by 12% in last ten years. The financial crisis of 2007-2008 could not harm the industry in the British high street as 25% of the restaurants were opened during 2011-2012 (BDO, 2014). There are about 50,000 food businesses in London. About 1.5 million people are employed in this industry. The following figure highlights the contribution of the industry to the economy (BDO, 2014). Figure 1: Contribution of hospitality industry (Source: BDO, 2014) From the above figure, it can be stated that there has been severe fluctuation in value obtained from the restaurant business during the period 2007-2012 (BDO, 2014). It is only because of the change in demand of the customers, which was affected by the economic factors such as recession and inflation. However, it is also observed that the restaurant industry have contributed to the economy to a great extent as the revenue collected is about £25 billion (BDO, 2014; Christie + Co., 2014). The consumers have started to eat more over the years due to the change in dining habit of the individuals in the UK. Moreover, it was observed that the consumers had continued to consume even during the period of recession. The average eating out of the Londoners are 2.2 times a week (BDO, 2014; Christie + Co, 2014). Porter’s five forces The Porter’ five forces help in determining the competitive intensity of any industry, which results in higher profitability (Porter, 2010). The Porter’s five forces of the restaurant industry are discussed henceforth. Bargaining power of the suppliers: It is very low in the UK due to the presence of a number of suppliers (Porter, 2010). The restaurants do not produce the raw materials but they source it from different suppliers. Apart from the low price, quality of the raw materials is expected to be high. Hence, the restaurants choose those suppliers who provide high quality raw materials at a cheap rate (Business Thoughts, 2011). Bargaining power of customers: The bargaining power of the customers is high in the UK markets as there are number of restaurants. The price of the food items in the restaurants is competitive. The customers have the option of choosing the best restaurant among a lot of names. Hence, the customers can set the price and when the price of a restaurant increases they go to another one for better products (Baker, 2007). Intensity of competition: In the restaurant industry, there are a number of restaurants, which increases competition for all. Hence, the intensity of competition is higher than other industry. The restaurants have to develop their own competitive advantage to differentiate from the rivals. A number of strategies can be undertaken for gaining competitive advantage in the UK market. The options are, to offer the best price, improve the range of food products, and also offer discounts on several items (Baker, 2007; Business Sweden, 2012). Threat of new entrants: The threat of new entrants is high in the restaurant industry as there are low entry barriers (Aaker, 2010). Moreover, it is not expensive to start up a new restaurant in London. Hence, many entrepreneurs have taken an initiative of starting a new restaurant business in London. 3. Marketing strategy The marketing strategy of King’s Cross Delite is devised after considering the present condition of the restaurant industry. The strategies are based on how to become competitive in the market, where there are a number of strong players. 3.1 Marketing Mix 3.1.1 Product King’s Cross Delite will offer the best and delicious food items to the customers in London. The products will be unique as it is prepared by home-made spices, which adds special flavour to the food items (Bose, 2010). The speciality of the restaurant will not only help the customers to get the best quality food at a reasonable price. The price of the food items are reasonable and are kept at a lower range so that even the students can afford it. King’s Cross Delite will have seating arrangement for 30 customers at a time and there will be a small area, where few can wait. The home delivery options and take away are also available. The customers will have the opportunity to spend as much time in the great ambience and share quality time with their close ones over the delicious food. The restaurant will also have Wi-Fi facility, which will allow the customer to surf the internet free of cost. The unique selling point of the restaurant is that it aims at selling high quality food at a reasonable price and the spices are authentic and have the ability to add separate essence to the food items. The suppliers for the restaurant will be chosen on the basis of the price offered by them. King’s Cross will consider the actions of their nearest competitor, Kitchen N1, which is also situated in King Cross, London (Kitchin N1, 2015a). 3.1.2 Price The price of the food and drinks items will be reasonable so that even the students can afford it. However, the owner will try to apply skimming pricing strategy for few items, which will the speciality of the restaurant. When the customers will start liking the dish, the restaurant will increase the price so as to make it the main attraction. The price of the items will be the competitive edge for the restaurant as such prices will not be offered by its competitors in King’s Cross. 3.1.3 Place King’s Cross is situated at the centre of the beautiful city, London. The place is famous for its railway station i.e. the King’s Cross railway station. The railway station is crowded by millions of passengers daily, who either leave the city or enter with their own work. If the restaurant is situated in such a place closer to the railway station, it can attract a number of passengers who are travelling daily. The daily passengers have the tendency to visit a shop or restaurant repeatedly if they like some goods or foods respectively. Hence, establishing King’s Cross Delite will not only help the business to draw enough revenue and profit but also assist the customers to enjoy delicious food that are made out of home-made spices and also experience the comfortable ambiance provided by the restaurant. 3.1.4 Promotion King’s Cross Delite will promote the restaurant and its food items in a very unique way. Apart from the road side banners and leaflets, the restaurant will also hold road shows, where the chefs will prepare food items and serve them to the pedestrians. The pedestrians will have the opportunity to taste the delicious food items and comment on their preparation and uniqueness. A feedback form is also filled up by the pedestrians who taste the food items. They will be preparing the special food items that will be served to the customers in the restaurant. Apart from the promotion, the restaurant will also give sales promotion by offering discounts and free food coupons on the next visit. 3.1.5 People The people refer to the human resource that will be recruited by the owners for the operation of the restaurant. There will be chefs, attendants, cleaning staffs, managers for monitoring finance and operation and logistics staffs. The chefs are recruited based on their experience in renowned restaurants and hotels. The attendants are chosen based on their interviews that are taken by the owners. The candidates for the post of attendants will be provided a role and asked to act accordingly. The marks will be given based on their performance. The attendants will become the main face of the restaurant and hence they are chosen very carefully. The cleaning staffs and the logistics staffs are chosen based on their experience. However, the managers will be selected based on their talent and how they present themselves. 3.1.6 Physical evidence The water theme for King’s Cross Delite is the main attraction of the restaurant. 3.1.7 Process The restaurant will be owned by three owners i.e. Mr. X, Mr. Y and Mr. Z. The partnership business will operate in such a manner that profit is expected at the end of each year. 3.2 Competitor analysis The main competitor of King’s Cross Delite will be Kitchen N1, which is also situated in King’s Cross. The main attraction of the restaurant is its theatre-island kitchen, where the customers get the opportunity to watch the chefs when they are preparing the food items. The smell of the sizzling items makes the mouth of every customer watery without any doubt. This is the main competitive advantage for the restaurant. The customers are also given the opportunity to choose their own ingredients if they like to. Hence, Kitcen N1 will be a big challenge for King’s Cross as both are situated in the same area. However, the only difference that King’s Cross delite will have with Kitchen N1 is its pricing strategy. The latter have set premium price for the food items. 3.3 Target market The main target market for King’s Cross Delite is whole population of London; however as the restaurant is situated in close proximity to the railway station hence it also aim at serving the passengers. 4. Management Plan The management plan for King’s Cross Delite is designed according to the financial availability of the restaurant. The budget for the human resource highlights the funds that are required for hiring chefs, staffs and others. The total fund available for this purpose is £70,000 per year. The maximum number of recruits for the restaurants is 10. The following table reflects the designation and its salary: The restaurant will have flat organisation structure with two managers supervising the activities in the restaurant. The benefits offered to the employees are casual leaves, increment based on performance, free food coupons and cab facilities. 5. Financial Plan Source of finance The source of finance for the restaurant is depicted below: Break-even Analysis The following graph depicts the break-even point for the restaurant business. Figure 2: Break-even chart (Source: Author’s creation) From the above figure it can be stated that King’s Cross Delite will generate the amount that is used for setting up the business and expense in the second year, which is indicative of a profitable business. The income statement, balance sheet and cash flow statement is provided in the Appendix, which is present at the end of the project. 5. Recommendations For the successful fulfilment of the business plan, the restaurant will have to develop a strong team and train them accordingly so as to proceed towards success. The restaurant should make a prominent impact on the customers so that they visit the restaurant at a regular interval to enjoy the food items. It is recommended that in order to increase the awareness of the individual regarding the restaurant, it should adopt strong sales and promotional strategies. 6. Conclusion The business plan is feasible enough to achieve success in the long run; however, it can be measured only after it is established. The restaurant is expected to earn enough revenue over the years since inception because of its diversified products and specialised home-made spices, which add separate flavour to the dishes. Reference List Aaker, D., 2010. Strategic market management: Global perspectives. Oxford: Blackwell Publishing. Baker, M., 2007. Marketing strategy and management. Basingstoke: Palgrave Macmillan. BDO, 2014. Best Practices Of The London Restaurant Industry. [online] Available at: < http://www.bdo.com.sg/specialreportRASFINAL.pdf > [Accessed 10 March 2015]. Bose, C., 2010. Modern Marketing – Principles & Practice. Mason: South-Western Cengage Learning. Business Sweden, 2012. Foodservice Market In The UK. [online] Available at: [Accessed 10 March 2015]. Business Thoughts, 2011. Porter’s Five Forces Industry Analysis For Krispy Kreme. [online] Available at: < http://www.harbott.com/2011/01/29/porters-five-forces-industry-analysis-for-krispy-kreme/ > [Accessed 10 March 2015]. Christie + Co., 2014. Business Outlook [online] Available at: < http://www.christie.com/en/publications/209.pdf > [Accessed 10 March 2015]. Crown, 2015. Choose A Legal Structure For Your Business. [online] Available at: < https://www.gov.uk/business-legal-structures/overview > [Accessed 10 March 2015]. Crown, 2015a. Ordinary Business Partnership. [online] Available at: < https://www.gov.uk/business-legal-structures/business-partnership > [Accessed 10 March 2015]. Kitchin N1, 2015a. About Us. [online] Available at: < http://www.kitchinn1.co.uk/ > [Accessed 10 March 2015]. Porter, M., 2010. From competitive advantage to corporate strategy. Harvard Business Review, pp 2-21. Bibliography Finish, J., 200. The essentials of marketing principles. 4th ed. Belgium: Peeters Publisher. Forsyth, P., 2009. Marketing: A Guide to the Fundamentals. 5th ed. New York: Leadership Press. Foxall, G., 2008. Strategic marketing management. 6th ed. Harlow: Prentice Hall Companion. Glynn, M. S., 2012. Business-to-business Marketing Management: Strategies, Cases and Solutions - Page 21, 4th ed. Bingley, UK: Emerald Group Publishing Guiltinan, J., 2010. Marketing Management: Strategies and programs. 5th ed. London: Chapman and Hall. Handlechner, M., 2008. Marketing strategy .5th ed. Canada: Grin Verlag. Hollensen, S., 2010. Marketing Management: A Relationship Approach. 5th ed. New York: Free Press., Appendix Income Statement Balance Sheet Cash flow statement Read More