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Tumo Restaurant - Business Model Canvas, Feasibility Analysis, Human Resource Feasibility - Example

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The paper “Tumo Restaurant - Business Model Canvas, Feasibility Analysis, Human Resource Feasibility” is a breathtaking variant of the business plan on business. Tumo Restaurant is a new establishment that targets leisure and business customers. The restaurant industry is growing because of changes in social and economic framework meaning more customers would visit restaurants…
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Tumo Restaurant Business Plan Name Institution Name Date Executive Summary Tumo Restaurant is a new establishment that targets leisure and business customers. The restaurant industry is growing because of changes in social and economic framework meaning more customers would visit restaurants. The estimated seed money is $120,000 before other indirect costs and experiences. Based on the analyzing of the financial records and feasibility study, the business is viable and breaks even and return on investment will take less than three years. The human resource is important sector and continues engagement and development of the employees are paramount, and it incorporates compensation and other motivational requirements. Hence, Tumo Restaurant is a viable business when analysed from different perspectives. Table of Contents Executive Summary 2 Business Model Canvas 4 Feasibility Analysis 4 Market Feasibility 4 Technical Feasibility 5 Provision of Products and Services 5 Resources 5 Regulations and Standards 6 Moral and Ethical Requirements 6 Financial Feasibility 7 Projected Revenues 7 Sources of Financing 7 General Financial Numbers 7 Human Resource Feasibility 8 Technical and Managerial Capacities 8 Manpower Requirements 8 Tumo Restaurant’s Growth Strategy 9 References 10 Appendix 1 12 Appendix 2 13 Business Model Canvas In the business model canvas, numerous factors are considered. For example, there is no specific customer segment because the restaurant attracts all the customers. Tumo Restaurant would also provide specialized services to corporate and external customers. Numerous variables have been considered in establishing and running the establishment include partnering with key personnel and suppliers. It also involves effective marketing strategies including cost and revenue structure. Hence, the success of Tumo Restaurant depends on numerous variables and factors. Feasibility Analysis Market Feasibility According to IBISWorld (2017), it states that the revenue in the restaurant industry is $20 billion and continues to grow. The report further states that there are 26,377 restaurants, while it creates employment for more than 290,000 people. In addition, the annual growth rate for the period 2012-2017 is estimated at 5.6%. IBISWorld (2017) predicts the restaurant business revenues would increase by 3.3% in 2017. The data indicates the business is viable and entering the business with effective strategies would result in better profitability. The market is not full but growing especially the diminishing leisure time, and busier lifestyles mean that consumers have to have meals at the restaurants. The significance of restaurants is allowing consumers to combine fine dining with leisure without waiting for the food to be prepared (Mundial, 2013). The quality of the food also influences the customer behavior meaning an establishment that champions quality receives and retains customers. The consumers are receiving the food and beverage from other establishment, and because Tumo Restaurant is focused on providing high quality services, the customers can embrace the products and services from Tumo Restaurant. The targeted customers are both local and international since the establishment will provide a variety of foods (Vom Brocke and Rosemann, 2010). In addition, Tumo Restaurant would prepare food based on the specific requirements of the customers. Tumo Restaurant would also provide outside catering for the customers during activities such as weddings, different types of celebrations and even corporate functions. Hence, many customers are persuaded to purchase the products and services from Tumo Restaurant because of quality, convenience, variety and friendly and flexible pricing. In the restaurant industry, external factors play an important role. The government formulates and provides guidance in the implementation of different regulations and standards (Soetanto and Jack, 2013). Without focusing and adhering to the standards, a government may close or penalize an establishment. In addition, competition is a major issue, but there are numerous barriers to entry. Some of the barriers to entry include economies of scale, strategic location, entrenched competitors, and regulatory obstacles (Koellinger and Roy, 2012). For example, the regulatory obligations different from the township to township and accessing and incorporating the information can create numerous challenge. Hence, for a new establishment, a business has to address numerous industrial dynamics including the government regulatory objectives e.g. permits and licensing. Technical Feasibility Provision of Products and Services Tumo Restaurant plans to provide both food and beverages. It means different approaches would be employed to ensure the customer is satisfied. The approaches implement creating the products within the house, off the shelf, and focusing on the requirements of the customer (Philip, 2010). It employs a combination method of in-house and subcontracting. For example, most of the food will be produced in the house but the ingredients and other raw materials will be sourced. It balances both the internal technical capacities with external variables (Hormiga, Batista‐Canino and Sánchez‐Medina, 2011). The uniqueness of the product and the customer requirements also informs on the type of food and appropriateness of the menu. Furthermore, the employees will be required to use their respective skills and expertise to develop the product and ensure it satisfies the requirements of the customers. A combination of in house and partnership will be used to complete sales and distribution. The in house strategy targets the customers who visit the restaurant and specifically orders the food. The food can be taken away or consumed in the house. The second approach is a partnership, especially in outside catering. Tumo Restaurant will provide the services after engagement and collaboration with the customer. For example, a customer may require food while the customer would supply the drinks. The design of food and the food offering have to balance these different requirements in fulfilling the diverse requirements of the customers. Hence, a collaborative framework is crucial in satisfying the requirements of the customers. Resources Numerous resources are required to fulfill the requirements of the customers. These resources come in terms of equipment, facilities, suppliers, components, raw materials, and skills. Contractual agreements would be entered with the suppliers to ensure quality supplies are supplied (Klapper and Parker, 2011). The equipment such as cooking and eating utensils will be acquired. The owner has experience in the hospitality industry and is able to employ persons who are able to run and operate the establishment (Nel, Maritz and Thongprovati, 2010). The design and construction of the restaurant will be given to subcontractors to ensure space is conducive to eating and satisfying the requirements of the customer. Moreover, these resources have to be balanced in a way that when the business grows, more resources are availed. Regulations and Standards In operating the establishment, numerous regulations have to be adhered. These regulations range from industry standards to environmental liability (Rubin, Aas, and Stead, 2015). The industrial standards include obtaining the licences and permits including a focus on Occupational Health and Safety, labour regulations and other standards targeting forming and running the establishment such as taxation regime. The personal certifications means that the health certifications are important and the individual should be able to complete the assigned duties provided the individual has approved and legal documentations (Collis and Hussey, 2013). Intellectual property also plays an important role in that Tumo Restaurant has to indicate the intellectual property in use and seek any certification. It means that Tumo Restaurant has to consider copyrights and trademarks including franchise requirements and objectives. It means diverse rules and regulations involving the operations of the business have to be considered. Moreover, Tumo Restaurant has to incorporate measures to uphold environmental protection. It includes usage of environmentally friendly energy and also effective disposal of the wastes. Moral and Ethical Requirements In the food and restaurant industry, ethical and moral standards are important. For example, high standards of cleanliness are important and quality assurance. A customer may ask when the food was prepared and whether the chicken or ingredients were grown in the environmental and ethically friendly way (Rubin, Aas, and Stead, 2015). Some people in the food industry may lie meaning ethical standards are crucial advancing the business objectives. Technology is important to the industry, and different types of technology are required. For example, storage devices should be able to keep the food for long while also conserving energy. The preparation tools also incorporate some level of technological innovation meaning the food industry requires utilisation of different technologies. Financial Feasibility Projected Revenues The revenues are from the sale of food and beverages, and other income would be generated from outside catering. The price will be dictated by the customer and ranges between $1.5 and $20 per unit sold. However, this amount would fluctuate when the specifics of the customers are integrated into the entire process. As indicated in the attachments (Appendix 1 and 2) the revenues would fluctuate as the business continues to gain the market share. The focus is ensuring the customer is satisfied, which results in increased total expected revenue. Sources of Financing The sources of financing are numerous, but the investor would focus on personal savings and contribution from the family members. Nevertheless, the investor would seek funding of 20% from financial institutions provided the financial institutions provide good terms and conditions. It is planned if the business becomes successful, the investor aims to receive external funding and support through selling shares. However, any sale would be limited to 20% of the worth of the business. Hence, the financing strategy has to consider numerous factors in ensuring the business becomes successful. General Financial Numbers • Gross Margin The following table illustrates gross margin profits for the three years: Year 1 Year 2 Year 3 Calculation 10,000/12,000** 100 15,000/18,000 * 100 25,000/30,000 * 100 Profit Margin 83.3% 83.3% 83.33% The data indicates that the gross margin is constant at 83% meaning it is a viable business. • Net Profit Margin It is a viable business because of the following information Year 1 Year 2 Year 3 Calculation 5,215/12,000** 100 7,621/18,000 * 100 12,447/30,000 * 100 Net Profit 43.5% 42.3% 41.49% It is estimated the break even is less than 2 years while the payback period is less than three years. The information is obtained from the profitability and the continuous increase in sales. Human Resource Feasibility Technical and Managerial Capacities The employees and people required in the organisation should have different capabilities and capacities. The employee should be able to complete their respective job descriptions and obligations. The managers and supervisors have to have their skills and capabilities to manage their respective segments and positions. The business is a sole proprietorship, and the role is the overall management of the business. A manager will be employed to coordinate the restaurant activities, but the owner would make the final decision especially on important issues (Chittithaworn et al. 2011). In addition, supervisors will be assigned to specific sectors such as kitchen, service/eating area, and inventory while the owner will supervise employee recruitment and management (all activities related to the human resource). The manager will be tasked with financial and strategic initiative and will be assisted with an accountant who will double as a cashier. Therefore, the owner would seek support from different parties in ensuring the objectives of the organisation are achieved. Manpower Requirements In searching for the right employees, the proprietor would use both social media and referrals. After getting the first employees, the employees will be used to attract other customers. “Poaching” will be employed in specific targets based on experiences with the establishment. For example, the proprietor will approach a chief and request for the services. Hence, a combination of processes would be employed in ensuring the right employees are employed. The compensation will be based on time such as monthly and weekly. Overtime will also be considered depending on the amount of work and whether it is outside catering or in-house services. Tumo Restaurant will employ part time employees to fulfill the requirements of outside catering. Moreover, when the customers are many, additional employees would be employed, and salaries agreed based on the situation. An effective human development and support are integral to the success of any organisation. The compensation would be used as the basis for motivation and for long term requirements; bonuses and social benefits would be provided (Kirkwood & Walton, 2010). The benefits include insurance, medical assistance, and other family oriented support. Furthermore, frequent training and development would be provided to improve the qualification and capacities of the employees. The employees would be allowed to attend workshops and seminars to improve their skills and capabilities. Tumo Restaurant’s Growth Strategy The future plans of the organisation depend on the efficiencies and accomplishments including meeting objectives. An effective evaluation system would be employed in which sales and customer satisfaction would be considered to determine efficient of the company. The complaints and suggestions from the customers would be used to improve the business practices. In addition, employees would be rated depending on their respective activities and accomplishments. The employees would be promoted depending on situation and accomplishments (Collins & Low, 2010). The time spends at the organisation would also play an important role in promotion. Therefore, numerous conditions and processes would be used to promote the employees and improve the working conditions of the employees. The structure of the organisation will change as the organisation grows. For example, more employees would be employed, and specialisation would be encouraged. A financial manager would be employed in budgeting and implementing different budgets. Marketing sector and specialised human resource individual would be employed. In addition, more outlets would be opened depending on the current successes and effectiveness of the current framework. References Chittithaworn, C., Islam, M.A., Keawchana, T. and Yusuf, D.H.M., 2011. Factors affecting business success of small & medium enterprises (SMEs) in Thailand. Asian Social Science, 7(5), p.180. Collins, J., & Low, A. (2010). Asian female immigrant entrepreneurs in small and medium-sized businesses in Australia. Entrepreneurship and Regional Development, 22(1), 97-111. Collis, J. and Hussey, R., 2013. Business research: A practical guide for undergraduate and postgraduate students. Palgrave Macmillan. Hormiga, E., Batista‐Canino, R.M. and Sánchez‐Medina, A., 2011. The Impact of Relational Capital on the Success of New Business Start‐Ups. Journal of Small Business Management, 49(4), pp.617-638. IBISWorld. (January, 2017). Restaurants in Australia. Retrieved from https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-food-services/restaurants.html Kirkwood, J., & Walton, S. (2010). What motivates ecopreneurs to start businesses? International Journal of Entrepreneurial Behavior & Research, 16(3), 204-228. Klapper, L.F. and Parker, S.C., 2011. Gender and the business environment for new firm creation. World Bank Research Observer, 26(2). Koellinger, P.D. and Roy T.A., 2012. Entrepreneurship and the business cycle. Review of Economics and Statistics, 94(4), pp.1143-1156. Mundial, B., 2013. Doing business 2013: smarter regulations for small and medium-size enterprises. The World Bank. Nel, P., Maritz, A. and Thongprovati, O., 2010. Motherhood and entrepreneurship: The Mumpreneur phenomenon. International Journal of Organizational Innovation (Online), 3(1), p.6. Philip, M., 2010. Factors affecting business success of small & medium enterprises (SMEs). Asia Pacific Journal of Research in Business Management, 1(2), pp.1-15. Rubin, T.H., Aas, T.H. and Stead, A., 2015. Knowledge flow in technological business incubators: evidence from Australia and Israel. Technovation, 41, pp.11-24. Soetanto, D.P. and Jack, S.L., 2013. Business incubators and the networks of technology-based firms. The Journal of Technology Transfer, 38(4), pp.432-453. Vom Brocke, J. and Rosemann, M., 2010. Handbook on business process management. Heidelberg: Springer. Appendix 1 Start-up Costing for [Business name] - [Year] START-UP COSTS Cost ($) EQUIPMENT/CAPITAL COSTS Cost ($) Registrations   Business purchase price 0 Business name 3,000 Franchise fees 0 Licences 2,000 Start-up capital 120,000 Permits 1,500 Plant & equipment   Domain names 2,000 Vehicles 34,500 Trade marks/designs/patents 500 Computer equipment 2,500 Vehicle registration 600 Computer software 2,000 Membership fees 1,200 Phones 1,000 Accountant fees 1,000 Fax machine 1,400 Solicitor fees 1,300 Security system 700 Rental lease cost (Rent advance/deposit) 5,000 Office equipment   Utility connections & bonds (Electricity, gas, water) 3,000 Furniture 90,000 Phone connection 1,200 Shop fitout 110,000 Internet connection 1,700     Computer software 2,000     Training 4,000     Wages 100,000     Stock/raw materials 150,000     Insurance       Building & contents 1,500     Vehicle 2,000     Public liability 3,000     Professional indemnity 800     Product liability 4,000     Workers compensation 12,000     Business assets 80,000     Business revenue 20,000     Printing 3,000     Stationery & office supplies 12,000     Marketing & advertising 35,000     Total start-up costs 453,300 Total equipment/capital costs 362,100 Appendix 2 Profit & Loss for [Business name] as at [Financial Year]     PROFIT & LOSS Year 1 ($) (000) Year 2 ($) (000) Year 3 ($) (000) Sales 12,000 18,000 30,000 less cost of goods sold 2,000 3,000 5,000         Gross profit/net sales 10,000 15,000 25,000 Expenses       Accountant fees 50 70 100 Advertising & marketing 1,500 2,000 2,000 Bank fees & charges 10 20 30 Bank interest 5 4 3 Credit card fees 0 0 0 Utilities (electricity, gas, water) 12 20 30 Telephone 2 4 6 Lease/loan payments 14 25 33 Rent & rates 36 44 60 Motor vehicle expenses 20 25 50 Repairs & maintenance 20 30 45 Stationery & printing 41 38 52 Insurance 14 19 25 Superannuation 25 30 40 Income tax 36 50 79 Wages (including PAYG) 3,000 5,000 10,000         Total expenses 4,785 7,379 12,553 NET PROFIT (Net Income) 5,215 7,621 12,447     Assumptions: All figures are GST inclusive. 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