The Business to Open Restaurant - Case Study Example

Introduction The flospa food restaurant is situated in Dubai emirates. The advantage of the location is that is within the central business district and with less competition about 50 miles far from each other which gives the business a strategic advantage that will attract more customers. The business will occupy 80 square meters of which ¾ is the banquet area while the ¼ is the storage area, backstage services as well as the cash teller desk. The business intends to recruit 20 workers to the business of which five personnel are chef as well as 7 personnel are waiters while the remaining personnel are cahiers located in every cash points within the restaurant. The goals and objectives of the project The objective of the project is to evaluate the business viability of opening a restaurant in Dubai emirates. The name of the proposed restaurant will be flospa limited which will majorly deals in fast food services (Brown 2003). The project appraisal will employ project management technique as well as budgeting technique in performing the financial forecasting in order to come up with an investment decision of either investing in the project or not on the basis of the amount of returns to be realized from investment. Description of the project Company or organization description and the type of service they provide The flospa limited Flospa limited is a new business enterprise registered under theDubai emiratesn corporation act with its head office situated in Melbourne. The company aims at focusing in food services due to high demand in real estate accompanied by scarce corporation major in this sector. 1.1 Products/services Flospa limited is corporation that supplies a high quality fast food product to its client. The company does not have competitors within 50 miles of its business operation hence making the business as the sole provider of fast food products within the surrounding (Bruns 2005). The following are fast food product to be offerd atr the op[eing of the restaurant with an intent of expanding the menu as bsuines gorws in terms of profit margin and capital asset. Product/Service Price AUD $ Boost juice 45 Pizza 35 Chicken grill 28 Sandwich 18 French fries 25 Potatoe cakes 30 Why and how As per our survey on citizen living around business proposal area, it is anticipate that the sales is projected to increase every month approximating 60,000 Durham Emiramte per month net profit margin is assumed to be 28000 Durham Emiramte implying that the restaurant will be able to give a return on capital invested within the shortest time possible (Cote 2002). It is significant to take into consideration the need of PEST Analysis in planning for the project as well as concluding on the aims and objectives of the project. Organization structure of the company Mission, Vision and value Mission The company’s mission statement is to become the largest part of customer’s focal point in supply of quality fast food that meets customer preference. Vision The company’s vision is to be a leading Dubai emirates fast food corporation that distribute worth to all its stakeholders .The main aim is to distribute earnings per share (EPS) growth and totality risk-adjusted shareholder returns. This is made possible by creating excellence fast food types and delivering value for our client. The company appreciates its errands to the environment and the public and is a principal in sustainable business practices. Values The company is dedicated to making its neighborhood and properties stronger, improved, linked, and more elastic (Jayne 2007). The business will employ inventive and sustainable properties to improve excellence of life and reasonable to reliably supervise and enhance the company’s ecological effects and make our fast food better organized for the Environment, our clients and our populace. The 7s Factor Strategy This is a plan created by the restaurant to attain the competitive edge as well accomplish in the market successfully. In this regards, the company ensures that there is a sound strategy implemented in order to achieve the competitive edge. This is reinforced by the company mission, vision and values of the company as explained above. Structure This signify the manner to which business segments are organized as well as entailed in the information of the person accountable. Structure is the organizational chart of the company and thus it is a clear and simple to change constituent of the framework (K. G. Lockyer 2001). Systems Systems are guidelines of the business that disclose business normal activities as well as the extent to which verdict is made. They are the area of the organization that establishes the extent to which organization is execute its business as well as it must be the key concern for the project manager at the time of organization development. Skills This are the company’s aptitude it require from its workers, they as well entail abilities as well as proficiency. When recruiting in employees for the restaurant, the companies will asses the skills of the interviewees to be strengthen in the new structure of the business. Staff The constituent is focused with the sort as well as the extent to which workers in the restaurant will require and extent to which they will be recruited, trained and encouraged at place of work. Style The represents the manner to which the restaurant is controlled by the top executive, the extent to which they associates, the action they undertake as well as their symbolic worth. Style the leadership approach that is going to be assumed by the restaurant (K. N. Krishnaswamy 2009). Shared Values This are the core of the model. They are the norms as well as standards that direct workers attitude as well as the restaurant actions and consequently are the basis of each organization. PEST Analysis Political Economical Social Technological Ecological safeguards Economic growth Demographic population growth latest technology and innovation Tax compliance Monetary and fiscal policies Labor mobility Technological transfers Global trade regulation Government spending Life style challenges Energy cost and consumption Employment right Unemployment regulation Career and business skills Internet usage Political stability Consumer confidence Fashion and trend Mobile technologies Consumer right Business cycle stages warfare and safety of people Government spending on research Market and Growing The company intends to have the following market option to expand and grow its business to high scale in order to maximize shareholders wealth. High sales turnover The company intends to build a strong relationship with its customers by providing after sales service as well affordable prices. this is aimed at ensuring that there is a steady growth rate hence, this is can as well as be achieved by ensuring that there is constant market and advertising strategy that can cover a wide coverage within a short period of time. High turnover rate would imply an increase in the level of the net profit to the business and consequently guaranteed going concern (Kay 1993). Once the business is fully introduced in the fast food industry, the business intends to introduce a new product in its production line. This will lead to an increase in new production channels and thus the business will report high and constant sales. This in effect will lead to growth the business within the shortest time possible. The SWOT Analysis Strength Relationship selling and Team spirit. the company identifies and clearly know their clients one by one The company has the loyalty to our client and thus we guarantee sustainable relationship We guarantee always Minimum supervision to our employees and at the same time strives to provide Quality work Weakness Brand power. The company at present cannot compare the rival full-page promotion strategy in the daily newspaper since the company does not have the global brand at present. Opportunity The company is dedicated to provide training facilities to its clients on the product as well as to its employees in order to guarantee for quality fast food We provide high and available services that our rival will not be able to provide since; our target market requires more service. Threat We face the threat of our competitor offering the lowest price on the fast food as compared to our prices, which makes the client believe that we provide the services that are not good, or below standards. Problems encountered Risks/constraints The business face the risk of being shut down by local authorities due non acceptance of the license to operate as foreign company which might emanate from political pressure as well as the threat from the community on non contentment on corporate governance principle. Strategies to adopt In order to minimize such threat and business risk, the business will put in place an effective environment and safety management team who will constantly supervise the extent to which the business complying with environmental safeguards as well as understanding the extent to which to the community is satisfied with the corporate social responsibility adopted by the business (Lovric M 2008). Action plan Sustainability milestone Target Target date Reduce total water consumption [50% reduction] Per year Minimise toxic waste to the environment [60% reduction] Per year Improve re-sustainability [60% increase ] Per year Risks and Management Plans Before implementation of the project, it is important to have an over view of the project from diverse point of view, prior to executing the action plan and putting the business plan into practice, we depict that the following intricacies may affect the successful conclusion of the project on time (Bajpai 2008). It is anticipated that the intricacy will occur in the following areas. People-related: The workers to recruited might be less contented with the start up pay. The workers might be having less experience in the new job For the proposed restaurant, the individual might be uncertain concerning the credit of the business especially when it is being opened on the first day. Time-related: The lately procured raw materials might not be supplied in real time leading to delay in supply in the first day of the business operation. The beautification of the restaurant cannot be competed on time prior to opening day. Service-related: The credit facilities such as the bank loan provided by the commercial bank might not be processed in real time as planned hence causing project delay. The new tableware might not take into consideration the needs of the customers The business might fail to buy the resource at low cost from the supplier due to the fact that it is hard to get rid of the entire risk; the restaurant director considers he is capable of managing such risk to a desirable level. Risk mitigation strategies The following are alternatives to be adopted in order to mitigate for risk. Avoid risk by ensuring that the workers assumes the proposed month pay at the time of interview Perform a market research together with target clients in order to enhance the reputation as well as the assortment of the people. Supervising the lead-time in order to be certain of supply of raw materials on time Setting aside specific portion of entire budget as a contingency provision to assume the anticipated risk. Public relations Durham Emiramte 2,000 per annum Market research Durham Emiramte1,000 per annum Contingency provision 1% of the yearly profit Implications of project management tools and techniques in the organization How the project manager adopted the following as the implication techniques Planning The planning of capital is shaped by the tactical planning of the organization that is impacted by the market demand as well as resource limits. The process linked with planning as well as feasibility study sets the main concern as well as timing for starting numerous project to meet the entire goals of the organization. To save [project time, mangers are enthusiastic to give up comprehensive planning as well as feasibility study in order continue with the project with sufficient meaning of the project range. Budgeting Establishing Guidelines Budget permits a manager to set up the key goals of the project. Some project may be all-inclusive. The budget constraints the number of alterative existing to the organization. Devoid of budgetary limits, the project might not be accomplished on time where the financing is scarce. as an alternative, the budget permits the project manager to understand the extent to which funds must be spent in the project stages. Cost Estimating Where the budget is executed, the project manager as well as the cost estimator might therefore establish the extent to which funds is spent on every constituent of the project. The budget permits those in charge of purchasing to appraise the portion of the existing fiancé to be apportioned to the component element of the project. This provides an option to establish if the project may be accomplished with the remaining funds. Prioritizing The benefit of budget in project management is that it permits a manager to prioritize the dissimilar parts of the project. While it might enviable to accomplish the whole project immediately, where the existing finance point that sufficient funds might not be present to finish entire aspect of the project as required, the budget will permit the project manger to prioritize the parts of the project to be accomplished at first while other phase of the project are held constant. Future Planning In the occasion that the budget depict financing to be insufficient to fund the required expense or to finish the whole project, the budget will make it simple to plan for the anticipated expense Scheduling process Financial The project scheduling affects the entire funding of the project. Time limits commands project managers to schedule asset efficiently. This is specifically right where the asset ought to depict specialized expertise as well as knowledge so as to accomplish the project. Accomplishing a project in a short time cost more due to extra resource is required. With precise project scheduling, attainable estimates as well as precise forecasting prevent last minute order which increase the cost. Documentation Creating a detailed breakdown of job structure permits project manager to develop a chart like the Ghant chart which list the project jobs, depict reliance ass well as defines target. The role is to in business project is to document as well as account for the progress in completion. The project schedule permits the project manager to allocate human resource to job as well as appraise their allocation to guarantee that there is the right group of labor force and specific levels of utilization. Management Efficient project manager perform standard meeting to attain status report. They employ project scheduling meeting to confirm with the team members as well as get rid of expensive miscommunication. Standard meeting guarantee work flow from one progress to the subsequent as well that every team member understand that the project manger requires contributing the project entire success. Quality scheduling Project guarantees that every job is accomplished in a superior approach prior to the subsequent job in the project progression start. By making certain that quality appraisals adheres to expectation at each phase of project make sure that project manger and team members address intricacy as the exist. There is no key issues must exist upon completion due to establishment of quality control from the start of the project scheduling process efficient project manger comprehend that making certain of quality controls entails controlling risk as well as exploiting opportunities to speed up the schedule where applicable to get rid of completion as well as attain competitive edge with a more reliable product. Activity flow chart Business solution and analysis, costing break down Cost analysis. Set up cost Item Price in Dollar Construction cost $23,000 Construction license fee $5,000 Purchase of Equipment $32,500 Installation of IT Equipment $12,500 Furniture & Fixtures $45,000 Initial Marketing cost $3,800 .land and building $500,000 Total set up cost $598,800 Breakdowns Item Low High Franchise Fee $25,000 $25,000 Construction license fee $5,000 $5,000 Rent (2 months) $4,500 900-0 Construction cost $23,000 $52,500 Equipment $32,500 $82,000 Information technology services $12,500 $25,000 Furniture & Fixtures $45,000 $15,000 Inventory $65,000 $130,000 Initial Marketing cost $3,800 $8,500 Professional Fees $5,000 $8,500 Deliver van $1,500,000 $3,000,000 land and building $500,000 $1,000,000 Estimated Opening $143,500 $32,500 Tangible and intangible Asset Tangible Asset Equipment $ 32,500.00 Furniture & Fixtures $ 45,000.00 Inventory $ 65,000.00 Delivery vans $ 1,500,000.00 land and building $ 500,000.00 Total tangible Asset $ 2,142,500.00 Intangible asset Goodwill 800,000 Patent right 550000 Total Asset $ 3,492,500.00 Budget financial Projections (one year projection to December 2015)     Flospa limited Budgeted income statement for the year ended Dec 2015     January February March April May June July August September October November December Revenue 50000 65660 75768 92500 100580 120580 220000 265500 298780 302580 324500 400000 Cost of Goods Sold -25200 -28500 -30500 -45400 -55680 -58800 -95700 101500 -120500 -145500 -18750 -201450 Gross profit 24800 37160 45268 37100 44900 61780 124300 164000 178280 157080 305750 198550 Expenses                         Electricity 500 -680 -790 -850 -1020 -1100 -2500 -3259 -3675 -4560 -5240 -5850 Printing & Stationary -300 -300 -300 -300 -300 -300 -300 -300 -300 -300 -300 -300 Telephone -450 -450 -450 -450 -450 -450 -450 -450 -450 -450 -450 -450 Delivery Costs -540 -540 -540 -540 -540 -540 -540 -540 -540 -540 -540 -540 Postage -230 -230 -230 -230 -230 -230 -230 -230 -230 -230 -230 -230 Rent -2000 -2000 -2000 -2000 -2000 -2000 -2000 -2000 -2000 -2000 -2000 -2000 Salaries/FT Staff -15000 -15000 -15000 -15000 -15000 -15000 -15000 -15000 -15000 -15000 -15000 -15000 Casual Wages -6440 -6440 -6440 -6440 -6440 -6440 -6440 -6440 -6440 -6440 -6440 -6440 Insurance -1500 -1500 -1500 -1500 -1500 -1500 -1500 -1500 -1500 -1500 -1500 -1500 Marketing -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 -3000 Repairs & Maintenance -2500 -2500 -2500 -2500 -2500 -2500 -2500 -2500 -2500 -2500 -2500 -2500 Net profit -6660 4520 12518 14290 11920 28720 89840 128781 142645 120560 268550 160740 Analysis of the findings and Conclusion It can therefore be concluded that the restaurant will be a viable investment since, the company anticipate earning returns from investment with the shortest time possible due to quality food product supplied to customers with high class services from waiters the business upholds the notion of reputation and believes that the company will attract more customers to the business due to the fact that the business will be the first decent restaurant to be opened in Dubai with latest technology in cooking and serving. The project is anticipated to be completed prior to comprehensive survey as well as detailed and keen consideration of the need to open the first class restaurant in Dubai. Reference list Bajpai, N 2008, Business Research Methods, Pearson Education India, India. Brown, DR 2003, The Restaurant Manager's Handbook: How to Set Up, Operate, and Manage a Financially Successful Food Service Operation, Volume 1, Atlantic Publishing Company. Bruns, WAJW 2005, 'Budgetary control and organisation structure', Journal of Accounting Research, vol 13, pp. 177-203. Cote, R 2002, Basic Hotel and Restaurant Accounting 5th Edition, East Lansig, Michigan. Jayne, V 2007, ' Project Managemen', people processes & performance—how to get the recipe, p. 52. K. G. Lockyer, ‎G 2001, Critical path analysis and other project network techniques. K. N. Krishnaswamy, ‎IS‎M 2009, Management Research Methodology: Integration of Methods. 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