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Business plan of fast food restaurant Business plan of fast food restaurant Document Transcript

  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque MalikFast Food Outlet – Business PlanThis is a business plan for a fast food outlet in Islamabad that will serve Pakistani Fast Food to middleincome groups. There is a segment in the market that would cherish the service level offered by a fastfood outlet but with local food recipes. Even some of the multinational chains have started offeringlocalized products to cater to the taste of such a segment. However, we feel that needs of this marketremain underserved in the absence of a local brand of fast food restaurant that offers “desi” food.MARKET SEGMENTS:The customers in the restaurant industry in Islamabad can be classified into following segments:  Exotic: This segment consists of top executives and business people who can afford to spend Rs. 1000/- or more per meal. They eat in small groups, mostly to entertain peers from social networks, and clients. Excellent quality and taste in an exquisite environment is required. Personalized service is important for this segment.  Executives & professionals: This segment includes top and senior executives and business people who spend Rs. 500/- to Rs. 800/- per meal. They eat in groups, socializing with peers from professional networks. The variety in menu offered, taste, environment and the service level is important to this segment.  Quick and convenient: This segment represents the population that spends Rs. 300/- to Rs. 500/- per meal. They have quick working-lunches in groups. They prefer quick served meals at affordable quality and taste. The environment, freshness of food and the service level is important to them too.  Bargainers: This segment consists of a population that affords to spend Rs.100/- to Rs. 200/- per meal. They are price conscious consumers who are less keen on service quality and environment. This group may also include students, office workers and white collar professional. Local taste and local food-meal is of primary importance to this segment.TARGET MARKET:Our target market is defined as Quick & Convenient segment from F10 sector, Islamabad.Two geographical locations were considered and compared to opening the fast food outlet. Blue Area inIslamabad was compared with F10 sector for peak and off peak hour traffic. The data in following tablesprovides capacity of each restaurant in terms of number of tables, occupancy between 1PM to 2PM (i.e.peak hour traffic) and 4PM to 5PM (i.e. off peak hour traffic).
  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik Blue Area Restaurants Between 4PM to Between 1PM to 2PM 5PM %age of Number of tables %age of occupancy occupancy Savor Foods 117 97% 48% Bar BQ Tonight 23 78% 30% Subway 14 57% 28% Wang Fu 26 42% 23% Haleem Ghar 17 58% 41% F10 Sector Restaurants Between 4PM to Between 1PM to 2PM 5PM %age of Number of tables %age of occupancy occupancy K.F.C 19 94% 47% Pizza Hut 24 79% 50% Haji Resturant 8 25% 25% Rock Bistro 21 52% 38% Italian Oven 18 55% 33%On the basis of information in tables and prices that these restaurants charge, we have made thefollowing observations:  Blue Area has higher density and generates high sales volumes but competition here is also very high.  Competitors in Blue Area include local giants like Savor Foods, which serves Pulao at approximately 150/- per head, and Haleem Ghar that too falls in the same price range.  There is a higher risk of mis-positioning ourselves with Savor Foods and Haleem Ghar, which may then result in a price war with these two competing brands.  In comparison, F10 has a lower flow of clientele but the competition is also less.  In F10 sales volumes would be lower but better unit prices are obtainable, since most competing brands are charging Rs. 300/- or above on their meals.  There is a good likelihood for positioning parallel to KFC or Pizza Hut in F10 area, which is the desirable position of our outlet.
  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque MalikCUSTOMER NEEDS OF THE TARGETED MARKET:Fast food outlets offer eateries along with space, time and an experience that customers like to pay for.Or in other words customers not only pay for the food but also for the overall environment andexperience that a fast food outlet offers. The customer seeks to fulfill the following needs in hisexperiencing the services of a fast food outlet.  Convenience in approachability to the outlet  Sense of privacy  Sense of hygiene, physically and visibly is prevalent in the structure of the outlet  Feeling of psychological comfort, accompanied with entertainment  Just In Time services  Very tidy and orderly space set up for the customer  Comfortable service infrastructure that enables a fast service to satisfy a level of customer needs  Repeatedly reliable in meeting customer’s expectations of a good food  Safety standards are very appropriate for individuals, children and families  Affordability/Reasonable prices  Tasty, fresh, hygienic and filling mealPOSITIONING:  The ideal position for our brand is to appear within the league of international brands such as McDonald’s, KFC and Subway but with a desi menu. The possible position statement would be “Tasty Desi fast food , with excellent environment and quick services”.  We should be able to fulfill the customer needs associated with the fast food industry, as listed above. These needs can be catered without creating an exact replica of typical fast food outlet that consumers usually associate with the foreign brands.  We seek to build our differential advantage on our position in the market. However, there is a possible risk of customers mis-positioning the brand with other local food options that are cheaper than our offer. This is a possible marketer’s dilemma that the customer could position the outlet as a Dhaba level eatery that charges more. Our product design and offering should help discount any such impression.CRITICAL SUCCESS FACTORSCSF 1: Customer convenience and satisfaction with the products and services must be maintained at alltime.  Conveniently approachable site
  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik  Availability of parking spaces  Main cluster area of our market  Easily recognizable identity  Clean fixtures and furniture  Amply and good quantity food (especially meat)  Courtesy in serviceCSF 2: Innovation in product and services is made part of the organizational culture. Customer must beintroduced with new offerings to cater to their changing tastes and preferences.CSF 3: Recruiting, training and retaining core staff that is involved in the delivery of high quality productsand services.CSF 4: Developing, communicating and managing operating procedures to ensure consistent quality andreduce line wastages  Managing purchases.  Managing an economy of production  Maintaining quality and taste in food  Floor management  Daily cooking preparations  Identifying and control pilferagesSTRATEGIC OBJECTIVES:Objective 1: Make profits in the first year of operationsObjective 2: Acquire customer from the target marketObjective 3: Maintain a high customer satisfaction levelPRODUCTION PLAN:  We will have a capacity to serve more than 200,000 customers per year with seating capacity of 48 seats (12 tables)  Food will be served at a comfortable, well lit and temperature controlled environment.  As per the information provided 1,200 sq. feet of total floor area is available for less than Rs. 100,000 per month, with an advance payment of Rs. 500,000/-  The restaurant and washroom will construct at 60% of total area, while the rest will be used in the kitchen.  Customers will place an order at the cash counter and will receive an order number after making payment. The order will be served within 10 minutes on the table where customers are seated.
  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik  The kitchen and the service staff will be dressed up in neat and clean uniform with disposable serving gloves.  A high level of hygiene will be maintained at all times.STAFFING PLAN:  Following is the staffing plan for our fast food restaurant: Staffing Plan Designation Number Monthly salary Annual Salary Salary/person Chef 1 60,000 720,000 60,000 Cooks 1 20,000 240,000 20,000 Kitchen service staff 3 36,000 1,296,000 12,000 Waiters/ Service staff 3 36,000 1,296,000 12,000 Cleaning staff 2 20,000 480,000 10,000 Cashiers 2 24,000 576,000 12,000 Security 1 10,000 120,000 10,000 - - - Total 13 206,000 4,728,000 136,000 Manager 1 80,000 960,000 80,000MARKETING PLAN:1. Product and Service:  The product will be fulfilling in its eatable content (Belly-full)  The product will be served in a way that it will be easy and fast to consume without oiling the hands.  The service level will be maintained to cater to customer needs discussed earlier.  The product will be unique in preparation and presentation  Packaging as per fast food outlets standard, i.e. paper and plastic for on the go consumption.2. Price  Competitive pricing with McDonalds and KFC  Pricing will also be used to align our market positioning with multinational fast food chains3. Promotion:  Very appealing and registering Outlet displays
  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik  Distributing flyers in the targeted areas  Promotional coupons at launch, off peak hours and holidays4. Placement:  Outlet approachable with convenience  Parking space available  Within the main cluster area of peer fast food restaurants  Identifiable easily5. People:  Recruiting a staff that has an appropriate interpersonal skill to deliver customer services.  Recruiting cooking staff that can feel the pulse of the taste required by customers  Cooking staff should be able to manage the kitchen and can deliver quality in food with consistency.6. Process:  Identify and develop procedures for all staff, as per their assigned scope of work.  Training of staff on the SOPs  Ethical codes  Hygiene codes  Update training to staff on a regular basis  Rewarding based on clearly stated performance measures7. Physical evidence:  Nice and clean staff uniforms  Easy to manage, sleek furniture and other fixtures  Always clean, tile floors  Maintaining high hygiene levels  Temperature managed at a comfortable level in all seasons  Bright and comfortable lighting  Light background musicREAKEVEN ANALYSIS  Our fast food outlet will break even at sales of 23,858 units. This number is based on assumptions that unit price is Rs. 300, unit cost is Rs. 180 and fixed cost is Rs. 2,863,000.
  • Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik  Based on our sales forecast, the breakeven will be achieved in the first year of operationsFINANCIAL ASSUMPTIONS:1. Revenues assumptions  There will be 12 tables with total capacity of serving 48 customers at a time.  The outlet will operate 7 days a week.  There will be 2 peak hours and 10 non-peak hours in a day.  We are assuming 100% capacity utilization for peak hours and 10-15% capacity utilization for non-peak hours.  It will take a customer an hour to consume a meal, starting from placing an order at the cash counter to the time when he leaves the restaurant.  Take away sales will be 25% of dinning in sales.  The unit price will increase at 10% per annum.2. Cost of goods sold assumptions  Cost of goods sold including raw material, labor and utilities will increase at 10% per annum.  Utilities are assumed at 13% of total raw material cost.3. General administration expenses  Rent will be paid at Rs. 100,000 per month. The rent will increase at 10% per annum  Depreciation is calculated at 10% per annum on the book value of assets, using the diminishing balance method.  Maintenance is 3% of depreciation expense