The Idea of Ks Place - Essay Example

Feasibility Study One of the very dynamic industries in the world will have to be the food industry and in particular the Restaurants business. It is claimed that anyone in the restaurant business does not experience a no business season. Business can only be low or high. The business idea I set to make a feasibility study on focuses on this industry. The idea is to open restaurant with the tittle, K’s place. The restaurant is set to open in the heart of University of London that will serve breakfast, lunch and dinner and snacks. The main objective of the restaurant will be to provide health treats to both the student fraternity and the teaching and non-teaching staff at the university. It is the goal of K’s Place to incorporate all the world cultures into one place through the food that we serve. This is also from the realization that the University of London is an international institution that attracts citizens from all over the world. Research done shows that most students prefer to eat fast foods which the restaurant seeks to introduce. The uniqueness of the restaurant will also include will be in offering vegetarian dishes into the servings. Among the services to be offered by K’s Place, we will also provide deliveries to the customers that cannot make it to the restaurant during the allocated time. The business seeks to collect revenues from its deliveries; foods sold within the premises and in the future expand into the catering business. The most part of starting the restaurant will be to establish its feasibility especially in the location that we propose to operate. We operate on the notion that everyone needs to eat, regardless of their schedule and if they can’t come to eat at a restaurant, then it will be harmless to take the restaurant to them. On these two notions, K’s Place will serve in-house and deliveries on call. We also believe that the choice of location increases the success of the idea. The Queen Mary University of London is a busy place with people from every possible culture in the world. Therefore the focus on fast foods will be an added advantage, given that the target market is largely of the young adults that research has shown to have a taste bud for fast foods. We will also ride on our inter-cultural dishes that will ensure most, if not all, of the non-Britons feel at home by eating the food from their respective regions or countries. Furthermore, K’s place will cater for all the vegetarians in the vicinity which sets us apart from our competitors. With these comparative advantages in view, it is without a doubt that the restaurant idea is practical and can prove to be successful. K’s Place will not be the first restaurant to be set up within one mile of the Queen Mary University of London (hereinafter QMUL) we therefore expects stiff competition from the already established restaurants. We expect to face competition from the restaurants set up by the student union such as The Shield, The Griff Inn Bar and Kitchen and the Mucci which all serve the student fraternity and the staff of QMUL (QMUL, student union). The Shield offers mostly drinks and snacks on its menu same as the Learning Café at the main library while Mucci offers mainly Italian food. Griff Inn has a wide range of foods in their restaurants. Of these, the Shield Griff Inn and Shield offer catering services and private hire for the venue. Our objective therefore is to capture the section of the market that is currently not captured by our competitors like the vegetarians and the health conscious clients. Our biggest competitor in the business, as established by our research, will be the Curve: that offers prepaid services to students and also serves vegetarian dishes. Our competitive advantage over them will lie in our ability to serve both contemporary and cultural foods. Of importance to establish the viability of the business idea is the target market: will the products and service we plan to offer be acceptable to those we wish to sell. Our target market as specified above is largely comprised of the student fraternity. A cost effective way of drawing up the market analysis was taken through in depth interviews of a proportion of the student population at Mile End campus combined with a demographic analysis. With over 21,000 students of close to 155 nationalities and around 20,000 full time students (Queen Mary University of London, Facts and Figure) then K’s Place is well on its way to gaining a strong market proportion. It is the student population from the 45 countries that we are targeting with our products. Implementing the business idea will require great financial outlay. This includes the amount of investment in setting up the premises and the operational costs after the business is established. The full implementation of K’s Place as a business will not be an exception and we expect to expend a huge amount of money in the set up. A large proportion of the funds required will be in securing a premise for the restaurant ad in obtaining the A3 planning license. The premiums for the license we expect to incur at most 100,000 pounds. Moreover, K’s Place will be situated in the London where critics have established that the cost of securing a premise is very high and we intend to obtain a building within the city for that purpose. We therefore estimate that the cost of premises will be at most 20 pounds per square foot. A survey carried out by BBC show that the majority of British would prefer an ideal restaurant of about 20-40 covers. Based on this survey, we intend to have approximately 30 covers. We also believe that the setting of the restaurant is as important as the service that we intend to deliver; therefore, we intend to spend on the décor of the restaurant to close to 50,000 pounds. Our main source of financial support will be to obtain a bank loan to finance the first operations. Given that it is a startup, we have made plans to apply for a government scheme offered by the Government of UK (GOV.UK). We have established that obtaining this funding is quite straight forward therefore we believe that the business will not lack funds. Moreover, securing a loan from the bank requires security for it. The business owner will use the house as collateral for the loan which gives us an advantage in securing a loan. Further to these sources, the business idea has proved to be strong and viable in terms of market acceptance thereby allowing us to seek financial assistance from venture capitalists. Obtaining funds for the startup will be beneficial to us to start us off however the marketing strategy is what will keep us going. The idea of K’s place will not be anything new to the market: there already exist restaurants all over UK and in particular, the Queen Mary University. Our target population will most inform the marketing strategy that we will use. The large population of the student fraternity is made up of millennials that spend approximately 30% of their time on the social network platform and most of their purchases are influenced by the social media. This is where we intend to start: creating a communication platform on the various social media networks. A report by Forbes (2014) show that the use of social media platform played a vital role is the increase of business sales for close to 80% of those businesses surveyed. The platform increases brand recognition and loyalty (Forbes, 2014). We also understand that part of our customer target does not use the social media platform as often, therefore we have established that for the first few operational weeks we shall run an advertisement of traditional media (print and television) especially within the University media. The use of these traditional media has also proved to be successful as a marketing strategy. We also cannot rule out the great impact of traditional marketing strategy of word of mouth: a single recommendation goes a long way. The pricing of our products will also be important in attracting customers and maintaining the already existing customers. Our pricing strategy will be benchmarked on the current prices being offered by our competitors and will reflect on our profitability margin that we seek to achieve.in the short run however we intend to use the market penetration strategy to price our food as a way to attract customers to K’s having considered the fact that most of our customers will be students. A survey done by BBC on 7,500 people 78% said they would pay 10-20 pounds for a meal while only 11% would pay between 5 to 10 pounds. However currently our competitor, the Curve, charge around 4.50 pounds per dish with the vegetarian dishes slightly lower (the Curve Menu). In consideration of the profit margin, we expect a 60% profit margin to be profitable for the business. Therefore having a price range of 4-5 pounds per meal is well within the acceptable limits and will be attractive to the customers. K’s Place seeks to capture an already existing customer base from the competitors as well as those whose interests are not well catered fro by our customers. From the competitor analysis we have established that we have a competitive advantage because we will offer variety of dishes from all over the world unlike the restaurants already set up around the campus. There is also an advantage on our side from the fact that we offer vegetarian dishes which we have established is currently being served by Curve only. The study also shows that there needs to be a different source of financing for the company apart from the loans since it is not a guarantee that the restaurant will be awarded either the government grant or the bank loan. Moreover, the choice of premise and its subsequently acquiring it will need much effort to set us apart from the rest of the competitors. The achievement of this idea will be able to provide employment not only to the business owners but also to a different set of people. No restaurant can be run without the chefs, waiters and the management team. All these contribute to self-employment. Self-employment in itself is not all rosy, the amount of work that needs to be done is enormous so are the risks that come with the running of the business. There is potential default risk on the loans taken out that could lead to bankruptcy. References 1. BBC: UK’s ideal restaurant survey [online] available at www.bbc.co.uk/restaurant/idealrestaurant/ Accessed 14/6/2016] 2. DeMers, J. (2014) the Top 10 Benefits of Social Media Marketing. [online]. Forbes available at www.forbes.com/site/jaysondemers/2014/08/11/the-top-10-benefits-of-social-media-marketing/#6b3b3022a4d2 [accessed 14/6/2016] 3. Government of UK: finance and support for your business [online] available at https://www.gov.uk/business-finance-support-finder [accessed 14/6/2016] 4. The Curve, Queen Mary University of London. Available at http://www.curve.qmul.ac.uk/ [accessed 14/6/2016] 5. Queen Mary University of London Student Union. Bars, Cafes and Restaurants available at http://my.qmul.ac.uk/studentguide/campus-life/bars-café-and-restaurants/index.html 6. Queen Mary University of London. Facts and Figures. Available at www.qmul.ac.ke/about/facts/ [accessed 14/6/2016] Read More