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Zara restaurantandlounge Document Transcript

  • 1. This sample business plan has been made available to users of Business Plan Pro®, business planningsoftware published by Palo Alto Software, Inc. Names, loc ations and numbers may have beenchanged, and substantial portions of the original plan text may have been omitted to preserveconfidentiality and proprietary information.You are welcome to use this plan as a starting point to create your own, but you do not havepermission to resell, reproduce, publish, distribute or even c opy this plan as it exists here.Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailedto the marketing department of Palo Alto Software at marketing@paloalto.com. For productinformation visit our website: www.paloalto.com or call: 1-800-229-7526. Copyright © Palo Alto Software, Inc., 1995-2009 All rights reserved.
  • 2. Confidentiality AgreementThe undersigned reader ac knowledges that the information provided by_________________________ in this business plan is confidential; therefore, reader agrees not todisc lose it without the express written permission of _________________________.It is ac knowledged by reader that information to be furnished in this business plan is in all respec tsconfidential in nature, other than information which is in the public domain through other meansand that any disc losure or use of same by reader, may cause serious harm or damage to_________________________.Upon request, this document is to be immediately returned to _________________________.___________________Signature___________________Name (typed or printed)___________________DateThis is a business plan. It does not imply an offering of securities.
  • 3. Table of Contents1.0 Executive Summary.............................................................................................................................1 Chart: Highlights ......................................................................................................................2 1.1 Mission........................................................................................................................................2 1.2 Keys to Success ........................................................................................................................2 1.3 Objectives ...................................................................................................................................32.0 Company Summary.............................................................................................................................4 2.1 Company Ownership .................................................................................................................4 2.2 Start-up Summary ......................................................................................................................4 2.2.1 Location & Operations..................................................................................................5 Chart: Start-up .........................................................................................................................6 Table: Start-up .........................................................................................................................7 Table: Start-up Funding ..........................................................................................................83.0 Services................................................................................................................................................8 3.1 Zara Menus...............................................................................................................................104.0 Market Analysis Summary................................................................................................................11 4.1 Market Segmentation..............................................................................................................11 Table: Market Analysis .........................................................................................................12 Chart: Market Profile (Pie) ...................................................................................................12 4.2 Target Market Segment Strategy...........................................................................................12 4.3 Service Business Analysis .....................................................................................................13 4.3.1 Competition and Buying Patterns .............................................................................135.0 Strategy and Implementation Summary..........................................................................................14 5.1 Competitive Edge....................................................................................................................14 5.1.1 Competitor Analysis ...................................................................................................14 5.2 Marketing Strategy ..................................................................................................................17 5.2.1 Marketing Program .....................................................................................................19 5.3 Sales Strategy..........................................................................................................................20 5.3.1 Sales Forecast ............................................................................................................21 Table: Sales Forecast.................................................................................................21 Chart: Sales Monthly ...................................................................................................21 Chart: Sales by Year ...................................................................................................22 5.4 Milestones ................................................................................................................................22 Table: Milestones..................................................................................................................236.0 Web Plan Summary ..........................................................................................................................247.0 Management Summary ....................................................................................................................24 7.1 Management Team .................................................................................................................26 7.2 Personnel Plan.........................................................................................................................27 Table: Personnel ...................................................................................................................298.0 Financial Plan ....................................................................................................................................30 8.1 Investment Opportunities.........................................................................................................30 8.2 Important Assumptions............................................................................................................31 8.2.1 Risk Analysis/Mitigation .............................................................................................33 Table: General Assumptions ...............................................................................................34 8.3 Profit and Loss Statement ......................................................................................................35 Chart: Profit Monthly .............................................................................................................35 Chart: Profit Yearly................................................................................................................36 Chart: Gross Margin Monthly ...............................................................................................36 Page 1
  • 4. Table of Contents Chart: Gross Margin Yearly..................................................................................................37 Table: Profit and Loss ..........................................................................................................38 8.4 Break-even Analysis................................................................................................................39 Table: Break-even Analysis .................................................................................................39 Chart: Break-even Analysis .................................................................................................39 8.5 Cash Flow Statement ..............................................................................................................40 Chart: Cash ...........................................................................................................................40 Table: Cash Flow ..................................................................................................................41 8.6 Balance Sheet Statement .......................................................................................................42 Table: Balance Sheet ...........................................................................................................42 8.7 Business Ratios .......................................................................................................................43 Table: Ratios .........................................................................................................................44 8.8 Expansion, Payback & Exit Strategy.....................................................................................45Table: Sales Forecast ...............................................................................................................................1Table: General Assumptions ....................................................................................................................2Table: Profit and Loss ...............................................................................................................................3Table: Cash Flow .......................................................................................................................................5Table: Balance Sheet ................................................................................................................................6Table: Personnel ........................................................................................................................................7 Page 2
  • 5. Zara Restaurant & Lounge1.0 Executive Summary Our initial statement to Investors and Financial Lenders, this restaurant/ethnic food business plan, is a candid disc losure of the Zara Restaurant & Lounge business proposal - our intent is to set realistic business expec tations, and eliminate any questions about the profitability of this business venture. Entrepreneurs have a tendency to paint the restaurant business plan with a very optimistic brush, highlighting strengths and camouflaging the risks. We, as business owners, have a vested stake and financial commitment in the success of this restaurant. Our intent is to have a definitive business, financial, and marketing plan that not only serves our need for capital financing, but is utilized as our daily business roadmap. We have taken all prec autions to validate our business and financial models, foc using on realistic projec tions. We have ac complished this as follows: 1. Our financial model is rooted in industry facts, not optimism. We have based costs on our vast industry and prac tical experience with similar ventures, validation against National Restaurant industry cost averages, and analysis against loc al Atlanta market averages. We have taken a collec tive look at all figures to make solid business estimates. 2. Our business concept was derived from detailed Market Analyses. Instead of building a business around a prec onceived concept, we analysed the market findings and built a concept around our consumers. In other words, our business is built to service an unmet consumer want. 3. A buffered financial plan that ensures adequate capitalization. A contingency buffer is included in the start-up cost to ensure the business in not under financed, as well as giving the business adequate funding to sustain it in the first six months of start- up. Our industry experience confirms a longer ramp-up stage for restaurants over other retail/service businesses. A common mistake for new entrepreneurs , but fully addressed in this business plan. 4. A solid Risk Mitigation Plan. We have evaluated traditional and non-traditional risks associated with Restaurant failure and ac counted for them direc tly in the business plan. Instead of dismissing the risks, we have identified valid mitigation strategies for each. 5. Deep Management Experience. Our management team has 20 years combined experience, involved with over 86 restaurant openings, and deep involvement with the Atlanta restaurant industry. The total capital requirement to launch Zara Restaurant & Lounge is $740,000, of which $643,000 is alloc ated to start-up capital, and $97,000 as business operations cash reserve. This Plan is being submitted in order to secure a Business loan for $430,000. The loan will be used towards Equipment purchase, Design, Construction, and Operational Start-Up expenses. Owners, Mr. Alex Hunte and Mr. Peter Smith are investing $110,000 in personal capital. Private Investors, who will be part owners with a non-managerial interest in the business, will contribute the remaining $200,000. As owners, our commitment is to take personal ac countability for all financial debt. We have taken the necessary prec autions to ensure the business is fully capitalized, and have addressed all financial shortfalls to ensure a successful business start-up. Under a realistic Page 1
  • 6. Zara Restaurant & Lounge sc enario, the company should have over $84,000 in c ash balance the third year. Even with the worst-case sales sc enario, we reach a Net Worth break even at the end of Year 5. On a linear projec tion, the entire financial debt will be retired by Year 7.1.1 Mission · Zara will be an inspiring restaurant, combining an eclec tic atmosphere with excellent and interesting food. The mission is to have not only a great food selec tion, but also efficient and superior service - customer satisfac tion is our paramount objec tive. Zara will be the restaurant of choice for a mature and adult crowd, couples and singles, young and old, male or female. · Employee welfare, participation, and training are equally important to our success. Everyone is treated fairly and with the utmost respec t. Our employees will feel a part of the success of Zara Restaurant & Lounge. · Our concept combines variety, ambiance, entertainment and a superior staff to create a sense of plac e in order to reach our goal of overall value in the dining/entertainment experience. We offer fair profits for the owners and investors, and a rewarding plac e to work for the employees.1.2 Keys to Success 1. Unique, Innovative & Contemporary: The creation of a unique and innovative fine dining atmosphere will differentiate us from the competition. The restaurant will stand out from the other restaurants in the area bec ause of the unique design and dec or. We will offer a fine dining experience in an elec tric atmosphere. Page 2
  • 7. Zara Restaurant & Lounge 2. Product quality: great food, great service and atmosphere. 3. ‘Spice of Life Menu: The menu will appeal to a wide and varied clientele. Our ec lec tic menu features regional specialties around the globe, from Spanish ceviche, to Thai and Indian curries, to loc al crabcakes. 4. Employee Retention Focus: Employee retention and development programs will be a primary foc us and success platform for this business. Through these programs, we will be able to draw seasoned and elite professionals and build a committed work force. We have budgeted for a stoc k option program for Chef and Management positions to subsidize a lower salary base. This lowers our immediate overhead and attrac ts quality staff. 5. Cost Control Focus: We will control costs at all times, without exception. Cost Control will be an integrated function of the restaurant from the onset. Cost control is about managing the numbers - interpreting and comparing the numbers that impac t the bottom line. 80 percent of the success of a restaurant is determined before it opens. Our foc us is to reduce the cost of goods sold to meet our profit margin goals by managing the following crucial elements of cost: Purchasing, Rec eiving, Storage, Issuing Inventory, Rough Preparation, Service Preparation, Portioning, Order Taking, Cash Rec eipts, Bank Deposits and Ac counts Payable. We will use of this restaurant/ethnic food business plan to trac k ac tual costs against our forec asts in managing the business. Due to intense competition, restauranteurs must look for ways to differentiate their business to ac hieve and maintain a competitive advantage. Midtown/Downtown Atlantas redevelopment requires a plac e that will fit into the new look of the community, one that is contemporary and entertaining. Zara will fill that niche.1.3 Objectives Zara Restaurant & Lounges objec tives for the first three years of operation include: · Keeping food costs at less than 35% of revenue. · Improving our Gross Margin from 65.41% in Year 1 to 67.10 in Year 2. These are attainable targets; our ‘stretch is to attain 70.73% by Year 3. · Keeping employee labor cost between 37-39% of total sales. · Remaining a small, unique restaurant with eclec tic food and service. · Averaging sales between $1,200,000 - 1,500,000 per year. · Promoting and expanding the Zara restaurant concept as a unique Midtown destination restaurant. · Expanding our marketing and advertising in Atlanta and in the neighboring suburbs to increase our customer base. · Ac hieving a profitable investment return for investors for Years 2 - 6. Page 3
  • 8. Zara Restaurant & Lounge2.0 Company Summary The Design Zara Restaurant & Lounge is unique to Midtown Atlanta. The restaurant features 3 venues in one (a concept called ‘Multi-Branding): A Tapas Lounge, Cosmopolitan Bar, and Full Service Dining. This concept offers customers variety, offering multiple dining and entertainment options within a single establishment. The spatial and menu divisions will broaden our appeal and provide our customers with a different experience on each visit. The atmosphere caters to a young but mature adult crowd. This is not a family dining establishment. Total space requirements are 3,000 square feet. In total, the restaurant will provide seating for 110 patrons. Where possible, consideration will be given to incorporate a dining patio. Zoning, parking, and ac cessibility issues will be reviewed as key criteria. We will draw on our Advisory Board as part of the site selec tion and lease negotiation. The Menu Zara is foc used on servicing Atlantas growing demand for an ethnic eating experience. For lac k of a better term we are launching a ‘multi-ethnic cuisine restaurant - a restaurant concept that responds to Atlantas need for selec tion and choice. Zara is a complimentary mingling of international cuisine on a single menu. The Midtown demographics fit this concept perfectly. The Management Our management team has over 48 years combined experience in food, restaurant and hotel, business management, finance, and marketing arenas.2.1 Company Ownership The restaurant will start out as an LLC corporation, owned by its founders, Zander Hunte and Peter Smith. Mr. Smith will function as the General Manager and Exec utive Chef, and Mr. Hunte as Managing Partner. Mr. Hunte and Mr. Smith have a long-standing professional relationship in the restaurant industry, stemming bac k to Toronto, Canada. Mr. Smith is an ac complished restauranteur, having owned several full-service restaurants. He currently owns Brassaii Restaurant (www.brassaii. com), and Bauhaus Bar and Nightclub. Mr. Smith is also an international Restaurant Consultant for top organizations such as the Starwood Group, who own the hotel chains of The Westin, Sheraton Hotels, Four Points, St. Regis, and W Hotels. Mr. Hunte has a bac kground in International Business Management, and is certified in Restaurant and Hotel Management. Under the management of Zander Hunte, Myth Restaurant was a feature restaurant in Toronto, and distinguished as a top 10 restaurant while under his management from 1992 - 1995.2.2 Start-up Summary We are currently negotiating a restaurant space of 3,000 sq. ft. in Midtown Atlanta, Georgia, Page 4
  • 9. Zara Restaurant & Lounge and will open Zara in October of this year. Our start-up costs are mostly expensed equipment, furniture, painting, rec onstruction, rent, start-up labor, liquor license, and legal and consulting costs associated with opening our restaurant. At the start of business, $97,000 will be alloc ated for business operations reserve. This is a solid start-up forec ast based on our market analysis and our knowledge and experience in the industry. We will purchase the following $73,311 worth of current assets during start-up : · Fixtures and Lighting: $32,250 · Bar Equipment: $26,183 · Sound and Televisions: $8,378 · Office Equipment (2 Computers, Fax, Printer, Safe): $6,500 Long-term Assets in the amount of $65,000 include all kitchen equipment. We have budgeted for the services for a premier Restaurant Consultant familiar with the Atlanta Market. This is espec ially key during the site selec tion and start-up stage. This company will have an integral role in validating the final restaurant loc ation and personnel selec tion, and participate on the Zara Advisory Board. The two owners are personally committing $110,000 of capital, plus a $300,000 SBA 7(A) loan guaranty. In addition, we have obtained a $130,000 grant from the city towards restoration of our historical building, as part of the citys Midtown revitalization program, contingent upon loc ating in the proposed space. We are seeking $200,000 of equity investment to fully fund Zaras startup costs.2.2.1 Location & Operations Restaurant Location Midtown Atlanta is the loc ation selec ted for the Zara concept. The outlook for the future of Atlantas Midtown district is exceptionally positive and the most progressive development area in the city. Developers are infusing over $50 billion in Commercial, Residential, and Retail development. Zaras will benefit from Atlantas desire to revamp the Midtown district with a $130,000 renovation grant for restoring and renovating the 100 year old property we plan to lease. The market has been c arefully selec ted and tested for the necessary demographics and retail traffic necessary to meet the goals laid down for profitability. The busy Midtown c ommercial/ residential loc ation has been c hosen based upon a successful demographic model and a traffic count of more than 33,000 cars daily. Restaurant Design Single- Level Design Concept: The total space requirement is 3,000 square feet. The restaurant will feature a comfortable and open concept design. The central dining area will alloc ate 76 seats, the lounge 22 seats, and the dining bar with 12 seats. In total, the restaurant will provide seating for 110 patrons. Where possible, consideration will be given to incorporate a dining patio. Zoning, parking, and ac cessibility issues will be reviewed as part of this analysis. Optional Patio: During the busy summer months customers can also sit outside on our patio Page 5
  • 10. Zara Restaurant & Loungeand we will offer a special summer menu, featuring lighter fare, exotic drinks, as well as non-alcoholic offerings. The patio setting will be a fun and casual atmosphere for the summer crowd.Operating CriteriaThe restaurant will be loc ated in Midtown Atlanta. The restaurant will service lunch, dinner,and after-hours dining during the week and weekends. The restaurant will operate during peakservice time to take advantage of street traffic, and after-hour patronage from theentertainment fac ilities in the area. Service will be available during the following hours:Lunch: Monday to Saturday, 11 a.m. - 2:30 p.m.Dinner: Monday to Saturday, 5:30 p.m. - 12 midnightSundays - Market brunch takeout only. Page 6
  • 11. Zara Restaurant & LoungeTable: Start-upStart-upRequirementsStart-up ExpensesPROJECT MANAGEMENT $0Restaurant Consultant (4 months) $15,911DESIGN $0Architectural Design $2,195Structural & Plumbing Design $1,368Mechanical & Electrical Design $2,155Graphic Design $1,185Electrical & Structural Engineering Fees $2,592Design Consultants (Kitchen, Interior & Dining) $9,119Engineer & Architect Fees $7,040CONSTRUCTION $0Plumbing $33,244HVAC (Air Return, Air Ducts, etc.) $19,250Electrical $7,964Disposal & Demolition $4,122Structural Construction (4 Months General Labour) $52,099Facade (Exterior Construction) $3,092Plaster (Dry Wall) $2,061Mill & Metal Work $8,244Interior Finishes (2500 - 3000 sq. ft.) $14,538Flooring $14,622Fire Alarm System $3,092Security & Phone System $4,615EQUIPMENT $0Liquor Control System - Lease $0Stools, Chairs, Tables, Uniforms $38,025POS (Point of Sale System) - Lease $0Glassware, Flatware, Smallware (Bar & Lounge) $3,298Glassware, Flatware, Smallware & Supplies (FOH) $8,298Dishwasher, Ice & Glasswasher - Lease $0Kitchen Equipment Freight Fees $2,389FF&E Taxes (Taxes on Purchase) $7,988OPERATIONAL $0Capitalized Legal Fees (LLC, Investor Agreements) $7,080Software: Restaurant/Inventory $5,500Software: Cost Control $6,000Impact, Tap & Permit Fees $3,115Business License & Temp Certificate of Occ. $1,615Liquor Licenses $4,615Utilities, Disposal, Tax & Insurance $9,275Security Deposits (Phone/Elec/Gas/Water) $6,250Initial Lease Deposits $6,250Bank & Loan Closing Costs $6,250Web Site Construction $5,800Initial Marketing, Training & PR $19,550Research & Development $3,050Start-Up Salary (Mngt & Chefs) $58,050Recruiting (Staff) $14,550Inspections $750Initial Cleaning Services $1,000Total Start-up Expenses $427,209 Page 7
  • 12. Zara Restaurant & Lounge Start-up Assets Cash Required $97,099 Start-up Inventory $27,500 Other Current Assets $73,311 Long-term Assets $65,000 Total Assets $262,910 Total Requirements $690,119 Table: Start-up Funding Start-up Funding Start-up Expenses to Fund $427,209 Start-up Assets to Fund $262,910 Total Funding Required $690,119 Assets Non-cash Assets from Start-up $165,811 Cash Requirements from Start-up $97,099 Additional Cash Raised $49,881 Cash Balance on Starting Date $146,980 Total Assets $312,791 Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $300,000 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $300,000 Capital Planned Investment Zander Hunte $60,000 Peter Smith $50,000 Investor 1 $40,000 Investor 2 $40,000 Investor 3 $40,000 Investor 4 $40,000 Investor 5 $40,000 Midtown Revitalization Grant $130,000 Additional Investment Requirement $0 Total Planned Investment $440,000 Loss at Start-up (Start-up Expenses) ($427,209) Total Capital $12,791 Total Capital and Liabilities $312,791 Total Funding $740,0003.0 Services Page 8
  • 13. Zara Restaurant & LoungeZara Restaurant & Lounge will feature international dishes, an eclec tic ambiance, and superiorservice. Our food will be of the finest quality and prepared with exotic flare. Customersatisfac tion is the driving force behind our success. We will change our menu every 4 months,but maintain the favorites for loyal patrons. Portions will be modestly sized, garnished withstunning presentation.Our wine list will be modest and primarily foc used on wines from California, Spain, Portugal, andArgentina. Approximately 25% will be available exclusively by the glass, and the remaininglabels will be available by the bottle. We will also feature a moderate international beerselec tion on tap and in bottles. The Zara bar features a comprehensive selec tion of loc al andinternational spirits.The kitchen staff will have the best in c ulinary education and work experience. Their creativetalents will compliment one another. The lounge and restaurant staff will offer the finestservice in an elec tric atmosphere and offer customers an extraordinary dining experience. Page 9
  • 14. Zara Restaurant & Lounge3.1 Zara Menus Zaras varied international menu will feature Thai, Chinese, Spanish, and other regional flavors. The menu flows together to create complementary elements. Normal dining will have a reduced Tapas, Appetizer and Entrée selec tion, while the Fusion Dim Sum menu will have special items featured only for after-hours dining. The final menu will be defined by the Exec utive Chef and paired with the wine menu. We have carefully selec ted a premium wine, beer, and alcohol listing, from which we will choose a modest rotating selec tion. Zaras marketing will foc us on our exotic foods, but our hours, target market, and loc ation will produce significant alcoholic drinks sales. Tapas, in particular, are small dishes meant for sharing while drinking sangria, wine, or other mixed drinks, and the Tapas menu will play up this idea with drink suggestions. The list below offers a small selec tion of our opening menu offerings: Zara Tapas · Shrimp Baskets w/ sweet & sour peanut coulis Minced curry beef/c hicken w/ onions in roti wrap (or spring roll) · Mixed Seafood Ceviche w/ cousc ous siding · Bamboo Chicken Satay w/ kaffir lime and Sesame marmalade Zara Appetizers · Bread basket served with Olive oil, Blac k Pepper, and Goat Cheese dip · Blue Crab Fritters with Mango-Tamarind sauce · Crab Cake medallions w/ Shrimp & Lobster ‘Zara Salads · Mixed Greens with Spanish sherry wine vinaigrette · Asian Pear and Endive Salad with Blue Cheese & Walnuts Entrees · Tequila Sc allops w/ a Spanish sherry reduction · Thai Red Chili rubbed shrimp · Voodoo Prince Curry Chicken and Boc k Chow w/sticky rice in Banana Leaf · Herb Roasted Chicken with ‘Zara Coo-Chee (House) spices Desserts · Choc olate Chunk Bread Pudding w/ Bourbon Cherry sauce · Zara Choc olate Explosion – Milk, Dark and White chocolate · Zara Fruit Plate Specialty Drinks & Coffees ($3.5 - 9.5) A key source of revenue for the restaurant will be alcohol and bar sales. The restaurant will feature exotic drinks on a separate menu. Alcoholic drink specials will be featured, as well as a Page 10
  • 15. Zara Restaurant & Lounge large non-alcoholic selec tion. After-hours bar service will feature selec tions of non-alcoholic drinks to increase bar sales during lunch and after regulatory hours. Bar pricing is competitive; prices range from $3.50 to 6.95. Non-alcoholic drinks will be in the higher price brac ket due to preparation requirements. Prices will range from $4.75 to 9.50.4.0 Market Analysis Summary Instead of building a business around a prec onceived concept, we conducted market research and built a concept around our consumers. Our market analysis identified the following key drivers as areas of opportunity to service Atlantas restaurant customers: 1. Portion Selection: Nearly 95% of our surveyed foc us group endorsed having a choice of different size portions. This statistic is in line with findings reported by the Tableservice Operator Survey. Zaras Tapas concept is built to offer different-sized portions. Our customers want the option to choose what satisfies their appetite. 2. Menu Variety: Ethnic restaurants are increasing in Atlanta. The proliferation of international cookbooks, food magazines, TV cooking shows and imported goods offers ample evidence that America, as a whole, is currently on an international tasting spree. In fac t, eating plac es that identify themselves as ethnic establishments numbered nearly 78,000 in 1999 and rec orded sales of $30.5 billion. Our research results do not identify any single ethnic style of restaurant as desired, but rather suggest that incorporating strong multi-ethnic influences in the menu selec tion will be popular. Again, variety is the underlying element for this concept. 3. The Dining Experience: Customer satisfac tion with food and service has been and continues to be of utmost importance, but our findings indicate that the déc or, lighting, bar, and other options to improve the dining experience are also fac tors in customer dec isions. Zara takes all these fac tors in c onsideration for the design of this cosmopolitan restaurant. 4. Reasonable Prices: This was no surprise given the ec onomic tide. Although the restaurant industry as a whole has seen growth in 2002/2003, customers are demanding value for their dining dollar. Zaras menu is priced at a mid-tier level, with no entrée over $20. In addition we have an extended Tapas and Appetizer selec tion priced between $3.50 - $9.50, allowing budget dining in a full-service restaurant.4.1 Market Segmentation Zaras Restaurant & Lounge intends to cater to a wide customer base. We want everyone to feel welcome and entertained. We have defined the following groups as targeted segments that contribute to our growth projec tions: · The Business Person · Downtown Atlanta Couples · The Destination Customer · High-End Singles · Tourists These particular market segments are 25-45 years old, have disposable income, and are Page 11
  • 16. Zara Restaurant & Lounge seeking upsc ale, trendy, and comfortable restaurant options. These are the types of people who frequent other restaurants and bars in the area. They are likely to spend more on experiences they perceive as unique, cosmopolitan, and sophisticated. They are also the most open to trying something new, foodwise, and will embrac e our international fusion cuisine. Table: Market Analysis Market Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR Business Person 18% 9,925 10,223 11,348 11,688 12,039 4.95% Downtown Atlanta Couples 32% 17,645 18,527 20,565 21,593 22,673 6.47% Tourists 13% 7,168 7,311 7,896 8,054 8,215 3.47% The Destination Customer 8% 4,411 4,499 4,724 4,818 4,914 2.74% High-end Singles 29% 15,991 16,950 18,815 19,944 21,141 7.23% Total 5.76% 55,140 57,510 63,348 66,097 68,982 5.76%4.2 Target Market Segment Strategy The Business Person: They work hard all day and often stay overnight in a strange city. They need a competent establishment that helps impress clients and prospec ts. Afterward, they want to relax and use the money they are making (or is expensed by their company). They spend the most on drinks, food and tips. Zaras cosmopolitan flair and comfortable atmosphere will be perfect for sophisticated business people, whether they live in and around Atlanta or are here for work. Downtown Atlanta Couples: The restaurant will have an intimate, romantic, enticing adult atmosphere that suggests "date." Zaras will be the best date loc ation in town. These young Midtown c ouples are generally very successful working professionals. In most cases they are Page 12
  • 17. Zara Restaurant & Lounge budgeting to eat out on a regular basis, as they dont have the time to prepare food nightly. The Destination Customer: Atlanta is a very sectioned city, and consumers often look only in their own neighborhoods for restaurant options. Zara will break these habits, using marketing to draw customers from outside the main c ity limits. Zara will be a destination restaurant. Our Destination Clients tend to be new suburbanites that miss the excitement of the inner city. They have disposable income, and will spend quite a bit on such outings. Zaras will be espec ially appealing to married suburban couples indulging themselves with a "date night" downtown, away from the kids. Many of these consumers are new to Atlanta from larger cities, ac customed to dining within the city and at non-franchised restaurants. High-end Singles: We will attrac t them with our eclec tic atmosphere and layout. Our international menu, striking dec or, entertainment and events, excellent service and engaging clientele will confirm the feeling of being in "the in plac e" in Atlanta. These are the individuals that pride themselves on socializing and dining at the premier loc ations - The Image Seekers. Tourists: Atlanta attrac ts many vac ationers during the summer months of May through September. Zaras will be a destination dining loc ale, with its attrac tive atmosphere, international menu, and lounge. A large percentage of the tourist population are vac ationing singles, here to socialize and be entertained. This is especially true for the tourist population that visit for sporting and social events - they are not interested in family establishments.4.3 Service Business Analysis The restaurant industry is highly competitive and risky. The owners know this through their many years of experience opening, running, and improving restaurants ac ross North America. Most new restaurants opened by inexperienced owners struggle or fail. However, those based on solid understandings of the market needs, and management of inventory and staff have a much higher chance of success, espec ially when c ombined with prior experience in the restaurant industry. Restaurants make money by taking inexpensive ingredients, combining them in c reative ways, cooking them properly, and selling them at a much higher price. Any ingredients wasted in the kitchen are money thrown out. Any time wasted in seating customers, taking orders or preparing food is money walking away. While some entrepreneurs think that success is as simple as a good loc ation and a trendy concept, we know the truth: To succeed in the restaurant industry, you need an understanding of the risks and financial conditions, the ability to handle enormous pressure, and the organizational skills to bring off what is essentially a giant catered party, two to three times a day.4.3.1 Competition and Buying Patterns In 2003, the top ten Atlanta restaurants shared two things: cozy, hip interiors and reasonably priced, regionally specialized menus. Only one of them offered traditional "southern" cooking. And half of them were loc ated in Midtown. Our competitors are heading in the right direc tion, but only Zara is based on sound market research in the loc al market. Atlanta consumers are seeking variety and new experiences. Location is clearly important, but so Page 13
  • 18. Zara Restaurant & Lounge is atmosphere and distinctiveness. Our marketing challenge is thus to stand out from our competitors, not only as the "new" restaurant, but as one that offers consistently high quality food, menu variety, and a unique atmosphere. Maintaining our edge will depend partly on marketing ourselves as an adult-only destination, and not a family restaurant.5.0 Strategy and Implementation Summary Our strategy is simple. We intend to succeed by giving people a combination of excellent and interesting food in an environment that appeals to a wide and varied group of successful adults. We will foc us on establishing a strong identity in our community with a grand opening. Our main foc us in marketing thereafter will be to increase customer awareness in the surrounding communities. We will direc t all of our tac tics and programs toward the goal of explaining who we are and what we do. We will keep our standards high and exec ute the concept flawlessly, so that word-of-mouth will be our main marketing force. We will create an appealing and entertaining environment with unbeatable quality at an exceptional price. As an exciting and ec lec tic restaurant, we will be the talk of the town. Therefore, the exec ution of our concept is the most critical element of our plan. All menu items are moderately priced for the area. While we are not striving to be the lowest- priced restaurant, we are aiming to offer exceptional food at reasonable prices for the average restaurant diner.5.1 Competitive Edge Zaras competitive edges are: 1. The owners thorough understandings of opening and running a restaurant 2. An extraordinary contemporary restaurant design 3. International menu with featured menu c hanges every 4 months 4. Unique, 3-Tiered spatial layout 5. Chef Co-op program to allow new entrants, trainee and featured chef 6. Chef/Management Stoc k Incentive Program. 7. Inner and Outer City Marketing campaign (i.e. "Come to Town" promotions) 8. Employee Training, Incentive and Retention program5.1.1 Competitor Analysis Below are excerpts from our competitive analysis study. 1. The Kitchen (Direct Competitor): We were able to draw some conclusions from this analysis that helped defined the concept and positioning for Zara: 1) Keep the menu pricing modest but offer superior food quality and presentation. We plan to keep the menu prices under $20; 2) Midtown is a prime restaurant loc ation. One Midtown Kitchen is in an obsc ure loc ation but has thrived as one of the more successful restaurants in the area; and 3) The customer Page 14
  • 19. Zara Restaurant & Lounge base in this segment of Atlanta is ready for after-hours dining, and is willing to travel to establishments that ac commodate their needs.2. Lunaci (Direct Competitor): This restaurant is a main c ompetitor for Zara, a casual dining restaurant that has evolved to be a great success story for the Midtown district. This restaurant served to validate 1) the tapas concept appeal for Midtown c ustomers; 2) the evolving need for after-hours dining; 3) tapas as a good food concept for after-hours dining (smaller portions, smaller price); 4) the appeal of live Entertainment.3. Cumulus (Indirect Competitor) This restaurant has grown in popularity over the years, and has gained popularity as a destination restaurant that can cater to business professionals as well as the loc al residents. The menu is somewhat formal for this market segment, but the bar attrac ts a good crowd. During this study it was evident that some patrons came exclusively to sit at the bar, without any intent of dining in the restaurant. Cumulus is more of a formal dining restaurant and meets a certain need within the community, but I dont see it as a direc t competitor of Zara. I do feel that it has some very special elements that have helped it succeed over the past 3 years, which Zara can benefit from.4. Cheesecake Factory (#1 Restaurant Comparison): Although Cheesecake Fac tory is outside of Zaras restaurant district and not considered a direc t competitor, it was beneficial to analyze the most profitable restaurant in Atlanta to understand what contributes to their success. Cheesecake Fac tor offers several key elements that would also benefit Zara: 1) Customer Satisfac tion through moderate pricing and high-quality food; 2) Location selec tion to benefit from core customer demographics, situated in a busy/popular area for both business and residential traffic; 3) Exceptional Service, from the Valet, to Hosting, to Wait, Bus, and Bar staff; and 4) Menu Variety, offering a broad array of menu items.5. Swing Restaurant (Indirect Competitor): This restaurant is not in our market district and therefore not a direc t competitor, although we do consider it an ‘indirec t competitor. Swing incorporates some of the charac teristics that we have mapped out for Zara. Those elements are: 1) A Tapas and Entrée menu – realizing that customers want varied meal size and variety; 2) A club type atmosphere to entice the single sc ene and to drive bar sales. Swing validates some of the elements uncovered in our market research as to what the new Atlanta diners are looking for. This serves as a true validation that the timing is right for the Zara Restaurant & Lounge concept.Failed Restaurant Analysis: Mumbo JumboMumbo Jumbo was an Atlanta restaurant attrac tion in the downtown c ore, a strong c ompetitorthat was severely impac ted by the patronage demise after 9/11. I also completed an analysisof this restaurant bac k in 1999 and compared it to this current analysis in 2003. Several fac torsled to closing of this restaurant: Page 15
  • 20. Zara Restaurant & LoungeLocation:This was a very cosmopolitan restaurant loc ated in a core business community. Therestaurant was hidden in c ross streets and away from the general street traffic. This was adestination restaurant and a secondary selec tion for the general customer base in this area. Lesson Learned: As part of this analysis, we have determined that the downtown c ore is not a good fit for the Zara concept. We will limit our site selec tion to the core Midtown district and the upper Downtown district. Midtown is Atlantas major growth district and is developing the residential infrastructure in pace with the business infrastructure.Customer Segment:Atlantas downtown c ore is not ready for this type of restaurant. Atlantas downtown c ore is abusiness district, and residential development for this area is at the Genesis state. The primarycustomer base is the business person and tourist. The largest percentage of this customersegment will be looking for a restaurant in which to conduct business or a familyestablishment; Mumbo Jumbo would not be a primary selec tion in either case. Lesson Learned: Zaras target market demographics are perfec tly in alignment with the Midtown profile. Midtown has a business core as well as a residential core. We will look to the business core for our primary daytime business, but to our residential core for our dinner and after-hours patronage. In addition, the business core will look to Zara as a plac e of socialization for dinner and after-hours unwinding. Mumbo Jumbo depended on the business segment for their lunch and dinner profits, and customers who would travel from outside the downtown district to eat at the restaurant – there was no static dinner segment.Visibility:Hand-in-hand with loc ation, this restaurant also suffered from poor visibility. In the downtowncore a large percentage of business is from walk-in traffic. The business and tourist customerstend to selec t a restaurant from touring the area and ac cessibility. Mumbo Jumbo was situatedon a cross street behind the main street. Lesson Learned: Although being situated on a main street is not as key in the Midtown district, we will ensure that visibility is part of our site selec tion criteria. In addition, we will use signage and exterior déc or as means to attrac t customers and get noticed.In all, this restaurant was a staple in Atlantas downtown c ore for over 10 years, but keyrestaurant disc iplines (Location, Customer Segment, Visibility) came bac k to hurt them as theec onomic climate changed.Market Analysis Conclusion:At the end of the day, everyone that sells prepared meals in this district is a Zaracompetitor, bec ause we all compete for the same home meal replac ement dollar. However,there are two segments of the restaurant industry that are our main c ompetition: the casualdining restaurant and the fine dining value restaurant.So, if the food and service is better at a fine dining restaurant than a casual restaurant, butprice has bec ome a fac tor as a result of the economic turns, where is a customer more likelyto go? Page 16
  • 21. Zara Restaurant & Lounge There is no absolute answer to the question, but the solution is to deliver the best food at the best price with the highest level of service in one establishment. This is the very definition of value and the concept at the heart of Zaras business model.5.2 Marketing Strategy Zara Restaurant & Lounges Marketing strategy will be to promote our elec tric food, superior service, and exciting concepts to draw in the loc al repeat customers. Marketing initiatives will concentrate on the following: Building and Signage: The most important Marketing tool that we have is the exterior of our building, and our new sign. We budgeted a great deal into the renovations and dec or to generate the aesthetic appeal of Zara. See attac hed Logo and Web design. Customer Service: In our years within the restaurant industry, customer service has always been the major draw for the dining clientele. Food and atmosphere is far out-shadowed by superior customer service that turns a new customer into a repeat customer. Management will demand the wait-staff provide the very best in quality services to the customer, making certain that they are content and satisfied with their dining experience. Wait- staff are thoroughly trained, and every 90 days they undergo a performance appraisal. This is part of our Employee Manual, and Operations Manual guide. Advertising and Promotion: Our Advertising Plan and media sc hedule call for targeting customers direc tly through loc al publications aimed at , respec tively, singles, couples, and destination customers. Management rec ognizes the key to success at this time of initial opening is extensive media promotion. This must be done aggressively in order to ac complish our service goals. A healthy budget is alloc ated for the first year. A primary part of the budget is alloc ated to create the media and customer buzz for the month prior to opening and the next three months after the grand opening. The full Marketing program is as follows:. Media Objec tives and Strategy: Establish our image as a unique Midtown restaurant with great service, value, and great food served in an eclec tic atmosphere. We will maximize efficiency in the selec tion and sc heduling of advertisements by: · Selec ting primary business publications with high specific market penetration, using The Creative Loafing Dining Section, The Atlanta Journal Constitution, Atlanta City Search, and Soc ial Diva, which all reach our targeted demographics. · Sc heduling adequate frequency of ads to impact market with menu items and promotions. · Where possible, positioning advertisements in or near entertainment/food related editorial. · Redirec ting customers to our website to register for upcoming functions, VIP lists, reservations, and flash media promotions. · Maximizing ad life with monthly and weekly publications. Page 17
  • 22. Zara Restaurant & LoungeWorking with The Reynolds Group Media Co. (Zara Advisory Board), we will develop anadvertising campaign built around our Zara Diner theme, menu offering, loc ation, and dec or.We will support this plan with ads that reinforce the Zara dining concept.Additionally, we will develop a consistent reach and frequency throughout the year, targetingeach spec ific customer segment within a five- mile radius, and new suburbanites, who stillapprec iate in-town dining.Promotional Campaign:The best way to reach our potential customers is to develop an intense advertising campaignpromoting our Zara concept of "Spice of Life." In addition to standard advertising prac tices,we will gain c onsiderable rec ognition through newspapers, newsletters and publicannouncements. Consumers will be encouraged to visit our website to be greeted with a flashmedia intro that highlights the restaurant, past happenings, upcoming attrac tions and ourdynamic menu.Our periodic customer surveys and weekly menu item sales evaluations will help us to understandwhat advertising is working and what is not; basically, who we are reaching. Our goal is tounderstand our customer, measure the success of our direc t marketing and media ac tivities,and redirec t advertising as effectively as possible.Publicity Strategy:Working with The Reynolds Group, Zara will foc us on the following publicity strategies: · Develop a sustained public relations effort, with ongoing contac t between key editors and top-level personnel at loc al dining publications. · Develop a regular and consistent pac kage update program for the major target media, keeping key editors abreast of all new promotions, and menu introductions. · Establish contac t with editorial staff for the purpose of being included in entertainment "round-ups"--product comparisons in dining publications and the loc al papers. · Produce a complete Zara Restaurant history and menu offering piec e to be used as the primary public relations tool for all target media editorial contac t. This will also be effective for inclusion in press kits.Press Release/Grand Opening: Zara Restaurant will release a series of press releases on theGrand opening.Editorial Visitation: Leading up to the Grand Opening, and over the first 6 months ofoperations, we will invite the most influential reporters and editors from all loc al publications toZara Restaurant in order to evaluate our menu, service, and atmosphere.Publicity Revenues: We anticipate at least 10% of our annual sales will be generated direc tlyfrom our publicity. A full media kit will be sent to all loc al publications, and releases on new menuitems will be made monthly.Community: Zara will look for key opportunities to pair with loc al community developmentorganizations and radio stations to interfac e with our customers. We will continually look for loc alcommunity programs in which we can participate, in order to better our community, and givesomething bac k. Page 18
  • 23. Zara Restaurant & Lounge5.2.1 Marketing Program In line with our Marketing strategy, we will employ three different marketing tac tics to increase customer awareness of Zara: In-Restaurant Marketing, Public Relations Marketing, and Media Marketing. Our most important tac tic will be word-of-mouth/in-restaurant marketing. This will be by far the cheapest and most effective of our marketing programs. Word-of-mouth/In-Restaurant Marketing · Restaurant Night: Every first Monday of the quarter, we will have a special evening for restaurant people. A perfect night for the loc al areas restaurant owners, chefs and staff to get together to disc uss the market and food trends, and possible Co-op efforts to promote the Midtown district. This is not a conflict of interest, it is an effort to increase visibility and patronage ac ross the Midtown district. We will also invite the Midtown Alliance committee for their participation. · Monthly Dating Connection: With the increasing appeal of Internet and speed dating, the restaurant will offer a monthly dating night. In addition to food and beverages, customers can choose from an array of dating pac kages up for auction. · Wait Area Marketing: Wait staff will service appetizers to customers waiting to be seated or on the wait list. · Live Entertainment parties · Spec ial Events · Valentines Day · Zara Halloween Masquerade party · Wine tasting weekend · New Years Eve party Public Relations Marketing · Georgia Hospitality & Tourism V.I.P. Party: We will host a V.I.P. Dinner before the Grand Opening. This will serve the dual purpose of training our staff and introducing ourselves to the community. The list of individuals we will invite comes from the Chamber of Commerce, Georgia Hospitality & Tourism, and Midtown Development group. We want their full committment to the restaurant to draw the tourist dollars. · Critics Choice: Prior to the Grand Opening there will be two preliminary parties catering to the Media and Critics community. We will encourage the media and restaurant critics to meet at the restaurant and review the dec or, service and food. This will be a preliminary review, where we will consider constructive input to make minor revisions prior to the true Grand Opening. This initial review and input will give critics and media commentors a stake in Zaras success, through their contributions to the final design. · Brochures: Make a broc hure for the in-town hotels and business establishments to provide to their guests and staff, containing interior pictures of our restaurant, menus and prices. · Government Relations: There are several Government offices in the Midtown/Downtown area. We will approach them to cater business luncheons and private functions. This Page 19
  • 24. Zara Restaurant & Lounge will offer us higher visibility for future functions and community events. Word-of-mouth referral is very powerful and particularly amongst the business community. · Private Functions: Target marketing to businesses for regular business lunch and dinner entertaining, and private functions. Media Marketing · Newspaper campaign: A very targeted media campaign to obtain featured articles about the restaurant in their Living, Entertainment and Dining segments. Notices of all live entertainment segments and special features will be posted to loc al newspapers calendar announcements. · Restaurant and Special Events Website: We have contrac ted with loc al design teams to deliver a high-quality, navigable, constantly updated website. · Media Relations: Several media relations teams will be utilized to market the Restaurant. Soc ial Diva and Green Frog are two media companies we will utilize for media relations. Both c ompanies have an insightful presence and connec tion with our target market. · Billboard Advertisement: One month prior to the opening, distinct billboard ads will advertise the launch of the Restaurant. · Inner & Outer City Marketing: We will budget to attrac t customers from the suburbs.5.3 Sales Strategy Our strategy is simple: we intend to succeed by giving our customers a combination of delicious and interesting food in an appealing environment, with excellent customer service, whether on their first visit or their hundredth. Our marketing strategies are designed to get critics and initial customers into our doors. Our sales strategies must take the next step and encourage customers to bec ome repeat customers, and to tell all their friends and ac quaintances about the great experiences they just had at Zara. New restaurants often make one of two mistakes: they are unprepared or underprepared for opening, and initial poor service, speed, or quality disc ourages customers from returning, or they spend all of their efforts at opening, and are unable to maintain the initial quality customers expec t on return visits, dec reasing word of mouth advertising and leading to poor revenues. Zaras sales strategy requires consistently high quality food, service, speed, and atmosphere. We can ac complish this by: · Hiring employees who genuinely enjoy their jobs and apprec iate Zaras unique offerings · Continually assessing the quality of all aspec ts mentioned above, and immediately addressing any problems · Interac ting with our customers personally, so they know that their feedback goes direc tly to the owners · Evaluating food choices for popularity, and keeping favorites on the menu as we rotate seasonal foods and specials Page 20
  • 25. Zara Restaurant & Lounge5.3.1 Sales Forecast The following sales graph is based on first year start-up estimates only. We anticipate that the business will not be at full operating capacity until the sixth month of operations. This is due to the competitive nature of the market and existing customer loyalty. All fac tors governing our sales progress are outlined below in the Important Assumptions section. Our sales forec asts for years 3 through 5 are very conservative, compared to industry standard growth rates. (See Ratios table for comparisons.) Although we hope to do catering for loc al businesses and government offices with time, we will insist on payment at delivery - we will not sell on credit. Table: Sales Forecast Sales Forecast Year 1 Year 2 Year 3 Year 4 Year 5 Sales Total Sales Food $853,595 $959,047 $1,006,999 $1,047,279 $1,089,170 Total Sales Bar/Beverages $220,174 $252,041 $272,204 $293,981 $317,499 Other $0 $0 $0 $0 $0 Total Sales $1,073,769 $1,211,088 $1,279,204 $1,341,260 $1,406,670 Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5 Total Cost of Sales: Food $298,758 $322,240 $329,289 $336,048 $342,762 Total Cost of Sales: Bar/Beverages $72,657 $76,167 $77,687 $79,228 $80,835 Other $0 $0 $0 $0 $0 Subtotal Direct Cost of Sales $371,416 $398,407 $406,976 $415,276 $423,597 Page 21
  • 26. Zara Restaurant & Lounge5.4 Milestones The following Milestones table lists important business milestones, with dates and managers in charge of each deliverable. The milestone sc hedule indicates our emphasis on planning and managing the details. Page 22
  • 27. Zara Restaurant & LoungeTable: MilestonesMilestonesMilestone Start Date End Date Budget Manager DepartmentEngage Restaurant Consulting 7/31/2004 7/31/2004 $0 Alex/Peter OwnersFirmSite Selection 9/8/2004 9/29/2004 $0 Alex/R.Shafer ConsultantFinal Restaurant Location 9/30/2004 10/1/2004 $0 Alex/Peter OwnersApprovedInvestor Finance Phase 8/22/2004 10/22/2004 $0 Alex OwnersInvestor Capital Secured 10/27/2004 10/27/2004 $0 Alex OwnersInvestor Partnership LLC 10/28/2004 10/31/2004 $0 S. Hollier LegalFormedInterview for Construction Team 10/28/2004 11/3/2004 $0 Alex OwnersRecruit Chef (Equity Partner) 10/28/2004 11/14/2004 $0 Alex/Peter OwnersReceive Final Contractor Bids 11/4/2004 11/17/2004 $0 Peter OwnerConstruction Budget Approved 11/19/2004 11/19/2004 $0 Alex/Peter OwnersSecured SBA Loan 11/1/2004 11/21/2004 $0 Alex/Peter OwnersHire Restaurant Architect 11/20/2004 11/21/2004 $0 Alex/Peter OwnersHire Interior Design Firm 11/20/2004 11/21/2004 $0 Alex/Peter OwnersHire Kitchen Engineer 11/20/2004 11/21/2004 $0 Alex/Peter OwnersHire General Contractor 11/20/2004 11/21/2004 $0 Alex/Peter OwnersFinalize Chef Partnership 11/15/2004 11/21/2004 $0 S. Hollier LegalConstruction Project Kickoff 11/24/2004 11/24/2004 $0 Contractor A Gen. ContractorFinalize Lease Holder Budget 11/24/2004 11/27/2004 $0 Alex/Peter OwnersFinalize Lease 11/28/2004 11/28/2004 $0 R. Shafer ConsultantsRestaurant Design Complete 11/25/2004 12/12/2004 $0 Contractor X Design ContractInterior Design Complete 11/25/2004 12/12/2004 $0 Contractor Y Design ContractKitchen Design Complete 11/25/2004 12/12/2004 $0 Contractor Z Design ContractRestaurant Opening Date 12/15/2004 12/15/2004 $0 Alex/Peter OwnersApprovedFinalize Menu & Wine Selection 11/21/2004 12/15/2004 $0 Chef/Peter Kitchen/OwnerMedia Plan Review 12/15/2004 12/19/2004 $0 Alex/M.Zimm PR MarketingApply for Liquor License 12/15/2004 12/19/2004 $0 Alex/S.Hollier Owner/LegalApply for Construction Permit 12/15/2004 12/19/2004 $0 Contractor A Gen. ContractorSubmit Kitchen Plan for 12/15/2004 12/19/2004 $0 Contractor Z Design ContractApprovalBoard of Health Approval for 12/29/2004 1/31/2005 $0 Board CityKitchenLiquor License Approved 12/29/2004 1/31/2005 $0 Board CityArchitect Review Board Approval 12/29/2004 1/31/2005 $0 Contractor X Design ContractCorporate Brochure 2/2/2005 2/13/2005 $0 M.Zimmerman PR MarketingReview Business & Marketing 3/1/2005 3/5/2005 $0 Alex/Peter OwnersPlanLaunch Zara Website 3/15/2005 3/15/2005 $0 Alex Media MarketingOrder Kitchen Equipment 2/1/2005 3/20/2005 $0 Alex/Peter OwnersOrder Restaurant/Lounge 2/2/2005 3/20/2005 $0 Alex/Peter OwnersFurnitureOrder Office Furniture & 2/2/2005 3/20/2005 $0 Alex/Peter OwnersSuppliesBusiness & Marketing Plan 4/26/2005 4/30/2005 $0 Alex/Peter OwnersReviewPR/Media Advertising (Phase 1) 5/1/2005 5/15/2005 $0 M.Zimmerman PR MarketingProduction and Completion of 5/5/2005 5/17/2005 $0 Chef/Peter Kitchen/OwnerMenusConstruction of Restaurant 2/2/2005 5/20/2005 $0 Contractor A Gen. ContractorPre-Opening of Zara Restaurant 5/24/2005 5/24/2005 $0 Alex/Peter OwnersEmployee Training (Phase 1) 5/18/2005 5/24/2005 $0 Chef/Peter Kitchen/Owner Page 23
  • 28. Zara Restaurant & Lounge Wine Class for Employees 5/18/2005 5/24/2005 $0 Peter Wine Distributor (Phase 1) Critics Choice VIP Party 5/25/2005 5/26/2005 $0 M.Zimmerman PR Marketing Final Construction Punch Out 5/21/2005 5/28/2005 $0 Contractor A Gen. Contractor Restaurant Revisions 5/27/2005 6/2/2005 $0 Alex/Peter Owners Employee Training (Phase 2) 5/27/2005 6/2/2005 $0 Chef/Peter Kitchen/Owner Wine Class for Employees 5/27/2005 6/2/2005 $0 Peter Wine Distributor (Phase 2) Grand Opening of Fusion 6/3/2005 6/3/2005 $0 Alex/Peter Owners Restaurant VIP Party 1 6/3/2005 6/3/2005 $0 M.Zimmerman PR Marketing VIP Party 2 6/4/2005 6/4/2005 $0 M.Zimmerman PR Marketing Web Site & E-Mail Media 5/1/2005 6/5/2005 $0 Alex Media Marketing Launch General Public Opening 6/5/2005 6/5/2005 $0 Alex/Peter Owners Launch 30-Day Grand Opening 5/1/2005 6/5/2005 $0 M.Zimmerman PR Marketing PR/Media Advertising (Phase 2) 6/1/2005 6/14/2005 $0 Alex PR Marketing Business & Marketing Plan 7/5/2005 7/9/2005 $0 Alex/Peter Owners Review Business & Marketing Plan 8/2/2005 8/6/2005 $0 Alex/Peter Owners Review Update Brochure 8/2/2005 8/13/2005 $0 Alex Media Marketing Direct Mail 8/16/2005 8/16/2005 $0 Alex Media Marketing Advertising (Phase 3) 9/1/2005 9/15/2005 $0 M.Zimmerman PR Marketing Zara Masquerade Party 10/31/2005 10/31/2005 $0 M.Zimmerman PR Marketing Direct Mail 11/1/2005 11/1/2005 $0 Alex Media Marketing New Corporate Accounts (5) 9/1/2005 11/1/2005 $0 Zander/Peter Owners Advertising (Phase 4) 11/15/2005 11/19/2005 $0 M.Zimmerman PR Marketing Advertising (Phase 5) 12/15/2005 12/30/2005 $0 M.Zimmerman PR Marketing Zara New Years Party 12/20/2005 1/1/2006 $0 M.Zimmerman PR Marketing Totals $06.0 Web Plan Summary Zara Restaurant & Lounge will have a dedicated website. It will be the virtual business card and portfolio for the company, simple, contemporary and well designed. Our site will offer our menus, prices, reviews and happenings at Zara. We will also have a monthly Paparazzi Review about what did happen at Zara to get new customers interested in our restaurant. Our website will be used to try out new offers, starting with an on-line order feature for the Sunday Market Brunch, and expanding if the concept gains favor with our customers. A customer will be able to order a selec tion for pickup using a credit card. Selec tions will be based on our pre- pac kaged meals available during the Sunday Market Brunch. This is also a potential for customers needing catering. The website will include email capabilities and online reservations and special events sc heduling.7.0 Management Summary The strength of our management staff positions us for success. We have assembled a team that embrac es different disc iplines, ac complished professionals with expertise in all areas of the Page 24
  • 29. Zara Restaurant & Loungebusiness, including marketing and restaurant management.The owners, Zander Hunte (Managing Partner) and Peter Smith (Exec utive Chef),have considerable experience in the restaurant industry.In Year 2, we will hire a General Manager to handle the day-to-day Restaurant management.This will assist Zaras Restaurant & Lounge to grow even further.You cant build investor confidence based on what you will do, but you can inspire confidencebased on what you have done. Attac hed is the portfolio of past success. This Zara Managementteam has deep roots in the restaurant segment, and have the prac tical experience to makethis venture another great success. Page 25
  • 30. Zara Restaurant & Lounge7.1 Management Team Zara Restaurant & Lounge, with more than 48 years of experience between the key officers, understands the importance of a strong management team. The strength of our management staff positions us for success. Day to day operational management will be conducted by Alex Hunte and Peter Smith, as hands on managers. They will advised and supported by their Advisory Board. Zaras Advisory Board · Stephen Hollier of Hollier Collier & Loewenthal: Corporate Attorney · John Katz of SS&G Financial Services: CPA · Robert Shaefer of Shafer Hospitality Services: Restaurant Consultant · Mary Zimmerman of The Zimmerman Group: Media & Public Relations consultant Ownership & Management Together, Alex Hunte and Peter Smith bring over 20 years of experience in the restaurant industry to their new joint venture. Alex Hunte: Managing Partner (Operations, Marketing, Financial and Business Development) Mr. Hunte brings to Zara an ac complished restaurant bac kground, exceptional business ac umen, and a lifetime passion for the restaurant experience. Alex has over 17 years of business management in the Information Technology industry. Like IT, successful ventures in the restaurant industry must balance capitalizing on new trends with c ontinual quality assessment. Alexs understanding of day-to-day cash flow planning and staff management will be critical to Zaras financial success. Mr. Hunte has a bac kground in International Business Management and Business Start-ups, and is certified in Restaurant and Hotel Management. As co-owner, Alex Hunte is responsible for overall direc tion and operational management. Mr. Hunte is a strong business leader responsible for strategic planning and continued growth of restaurant services and business development. In addition, Alex will be the management lead for all public relations, financial and investor services. Degrees, Certifications, and Professional Affiliations: · MBA in International Business Management · B.S. in Computer Sc ience · Certified in Restaurant & Hotel Management from Ryerson University · PMP (Projec t Management Professional) certification · Member of the Midtown Alliance · Business partner member of the National Restaurant Association. Peter Smith: Managing Partner (Exec utive Chef and Restaurant Operations) Mr. Smith is an ac complished restaurateur, having owned several full-service restaurants. Mr. Smith is responsible for the concept and the daily operations management, with yearly sales Page 26
  • 31. Zara Restaurant & Lounge targets of $7 million. In addition, Peter is the owner of Bauhaus Bar and Nightclub, and former owner of Myth Restaurant, Ouzeri, and Kapilyo Restaurant, all financial and critical successes. Mr. Smith is also an international restaurant consultant for top international organizations. Mr. Smiths Contrac ting responsibilities for Zara included logistics, Site and Lease Negotiations, Concept Definition, Start-Up and Financial forec ast, Menu and Operations Management, as well as Implementation and Launch Management. With a degree in Economics and an ac complished career, Mr. Smith c ontributes the experience of his past successes, and is charged with leading the Restaurant Operations, Staff Selec tion, Menu Definition and Training initiatives for Zara Restaurant & Lounge. Managing Partner Responsibilities In addition to the management of day to day operations, both managers, as principals within the company, will oversee menu development, purchasing, portioning, pricing and inventory control, including approval of all financial obligations of the company. They will plan, develop, and establish customer service policies and objec tives, and write, explain, and enforce an employees manual for all employee-related policies. Responsibilities for hiring and firing employees lie solely with the two operations managers, and any dec isions in these areas will be made jointly. They will: · Manage working capital, including rec eivables, inventory, cash and marketable securities. · Perform financial forec asting, including capital budgeting, cash flow analysis, pro forma financial statements, and external financing requirements. · Prepare financial analyses of operations for guiding management, including reports which outline the companys income, expenses, and earnings. · Direc t preparation of budgets and financial forec asts and arrange for audits of companys ac counts.7.2 Personnel Plan We believe the personnel plan is in good proportion to the size of the restaurant and projec ted revenues. The staff will include 13 full-time employees and 8 part-time employees, who will work a total of 754 manhours per week and generate an average monthly gross payroll of $27,308 for the first year in business. The estimated gross annual payroll of $399,588 (including Partner Salaries) is 37% of total sales. Wage salaries for service personnel (waitstaff, busboys, bartenders) do not include anticipated tips. With average tipping rates for the Atlanta, Georgia area, and our menu prices, service employees should average at least twice the minimum wage in any given shift. Skilled waitresses and bartenders on weekends and evenings will make substantially more. Page 27
  • 32. Zara Restaurant & LoungeKitchen:The Exec utive Chef will be assisted by: · An Assistant Chef from a national search (1). · A Sou chef with c onsiderable experience in different restaurants (1). · Cooks that work direc tly with Peter or the sous chef (2). · Prep cooks/dishwasher (2). · People cleaning the restaurant (2).Restaurant Operations:Alex Hunte will manage the Financial Management, Bookkeeping, PR/Media Advertising, andInvestor Services. Alex Hunte will also manage the daily Restaurant Operations.Peter Smith will be the Restaurant Manager. He will be the primary responsible for dailyRestaurant Operations, taking care of Wait and Bar Staff. Peter will also take lead as theExec utive Chef working with the Head Chef. · To help Peter, he will have servers that will work as ‘captains (these people have experience in managing, waiting tables and bartending) and take care of service and make sure the restaurant is in excellent shape (2). · Servers that work part time (4). · Full-time bartender (1). · Part-time bartender (1). · Full-time busboy (2). · Part-time busboy (1).Administrative Salaries (Partners): · Zander Hunte: $ 48,000 per year · Peter Smith $ 32,160 per year Page 28
  • 33. Zara Restaurant & LoungeTable: PersonnelPersonnel Plan Year 1 Year 2 Year 3 Year 4 Year 5General Manager (Year 2+) $0 $0 $28,000 $28,500 $29,000Partner/Manager $48,000 $48,000 $48,000 $48,000 $48,000Partner/Asst. Manager/Exec. Chef $32,160 $32,160 $32,160 $32,160 $32,160Hostess (Full Time) $24,000 $24,500 $25,000 $25,500 $26,000Hostess (Part Time) $13,200 $13,500 $14,000 $14,300 $14,800Waitperson 1 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 2 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 3 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 4 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 5 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 6 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 7 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 8 $5,640 $5,640 $5,640 $5,640 $5,640Waitperson 9 $5,640 $5,640 $5,640 $5,640 $5,640Wait/Barperson $10,440 $10,440 $10,440 $10,440 $10,440Bartender 1 $14,400 $14,400 $14,400 $14,400 $14,400Bartender 2 $7,200 $7,500 $7,500 $7,500 $7,600Busboy 1 $9,120 $9,120 $9,120 $9,120 $9,120Busboy 2 $11,760 $11,760 $11,760 $11,760 $11,760Busboy 3 $7,200 $7,200 $7,200 $7,200 $7,200Assistant Chef $44,400 $44,400 $44,400 $44,400 $44,400Sous Chef $32,400 $32,400 $32,400 $32,400 $32,400Cook 1 $24,240 $24,240 $24,240 $24,240 $24,240Cook 2 $18,960 $18,960 $18,960 $18,960 $18,960Prep Cook/Dishwasher $12,288 $12,288 $12,288 $12,288 $12,288Prep Cook/Dishwasher/Cleaning $12,960 $12,960 $12,960 $12,960 $12,960Dishwasher 1 $8,640 $8,640 $8,640 $8,640 $8,640Dishwasher 2 $5,700 $5,800 $5,800 $5,800 $5,800Cleaning/Dishwasher $11,760 $11,760 $11,800 $11,800 $11,800Open $0 $0 $0 $0 $0Total People 20 24 25 25 25Total Payroll $399,588 $400,788 $429,828 $431,128 $432,728 Page 29
  • 34. Zara Restaurant & Lounge8.0 Financial Plan Zara Restaurant & Lounge financial model is based on a business concept to "Plan for the Worst, but Manage for the Best." We have approached the financial plan as follows: The First Year projec tions anticipates a below average sales volume, below average seat turn, and above average food/beverage cost. This position will help us ensure sufficient financial planning to ac commodate a reasonable ramp-up period, and business success, also ensuring that we do not enter this venture under-capitalized. Financial Pro Forma In addition to the $110,000 of owner investment and $130,000 in grant monies, Zara is seeking $300,000 in long-term loans and $200,000 in investment for renovations, furniture, kitchen equipment, liquor license, food & restaurant supplies, legal fees, working capital, marketing and personnel. The Financial Plan includes: · Important Assumptions · Risk Analysis & Mitigation Plan · Sales Forec ast (5.3.1, above) · Break Even Analysis · Profit and Loss Statement · Cash Flow Statement · Balance Sheet8.1 Investment Opportunities The Zara Investment Program alloc ates equity position of 20% for a total of $200,000 in investor capital. The Investment structure is as follows: Investment Opportunity Page 30
  • 35. Zara Restaurant & Lounge Total Investor Funding $200,000 Opportunity: Minimum Investment Amount $15,000 Investment Term (Investor 3-5 Years Selec tion) Total Equity Offering (1% per 20% Max $15,000 Investment) Starting Year 2 Silver: Projec ted Annual IRR on 10% Investment of $15,000 - $49,000 Gold: Projec ted Annual IRR on 11% Investment of $50,000 - $99,000 Platinum: Projec ted Annual IRR on 12% + Residuals Investment of $100,000 or more Investor Paybac k Program Each Investor will rec eive equity shares as a part owner, with a non-managerial interest in the Restaurant. Based on financial estimates, the maximum annual IRR is 12%. Over and above the interest and principal repayment, Investors contributing $100,000 or more will rec eive residuals for the life of the business as a bonus incentive. As with our investors, our primary goal is to earn real profits and not ‘Paper Profits. As such we will foc us on expediting returns to investors where possible. Our existing paybac k structure will begin paying dividend every quarter, starting in Year 2 of business operations. Investors will rec eive quarterly interest and annual principal reduction payments over the full term of the investment. Paybac k to Financial and Private investors will take priority over any profit shares to the owners, Alex Hunte and Peter Smith.8.2 Important Assumptions The financial plan depends on important assumptions, most of which are reflec ted in the financial statements that follow. We have been c autious with our projec tions, and incorporate a mitigation for all manageable risks. The key underlying assumptions are: Economy Slow Economic Rec overy. We anticipate a slow-growth economy, rec overing from an economic rec ession. Business Growth Annual Growth Rate Percentage. We anticipate modest growth over the coming years. The financials ac count for the following growth projec tions: ° Year 2: 6% Year 4: 4% Page 31
  • 36. Zara Restaurant & Lounge ° Year 3: 5% Year 5: 4%Weekly Sales Variance. Saturday will typically be our best sales for the week. The salesvolume for all other days is represented as a percentage relative to Saturday. Therefore ourweekly sales will vary as follows:Monday: 55% Thursday: 95%Tuesday: 60% Friday: 90%Wednesday: 75% Saturday: 100%Seasonal Sales Variance. In Atlanta, October through the late season is the most productivesales period, while the summer months tend to be the slowest restaurant period. This trend isreflec ted in the financials though a seasonal variance as follows (where October is targeted tobe our most successful sales month):June: 70% October: 100% February: 95%July: 75% November: 95% March: 85%August: 80% Dec ember: 95% April: 90%September: 85% January: 85% May: 90%Industry & Start-UpFiscal Year-1 Ramp-up. Our experience in the industry confirms a longer ramp-up stage forrestaurants over other retail/service businesses. Our Annual Sales Growth is based on attainingthe following seating capacity percentage per dining period: · Year 1: After-Hours = 53%, Lunch = 70%, Dinner = 88% · Year 2: After-Hours = 70%, Lunch = 82%, Dinner = 100% (implied wait period) · Year 3: After-Hours = 80%, Lunch = 87%, Dinner = 100% (implied wait period)Six-Month Start-Up Stage. As a new restaurant entry to the Midtown market, the ramp-up incustomer draw is expec ted to extend over 6 months. This is reflec ted in a higher than averagemonthly sales variance shown as follows (Worst-case / Expec ted-case): · Month 1: 32% / 51% Month 4: 64% / 75% · Month 2: 41% / 58% Month 5: 80% / 90% · Month 3: 52% / 66% Month 6: 90% / 92%Market Analysis findings are static. We assume that there are no unforeseen c hanges infindings outlined in the Market Analysis.Pricing & Cost ControlCompetitive Pricing Model. Revenue calculations are based upon competitive price comparisonsand established menu values in the current marketplac e. The following are baselineassumptions on Average Chec k Totals, and Average Seat Turns: Page 32
  • 37. Zara Restaurant & Lounge Daily average for lunch spending is $10.50 per person, dinner at $27.50 per person; and $17.50 per person for After-Hours dining (All check totals include Beverages, but not Bar). Seat Turn averages are modestly estimated at: · Year 1: After-Hours = 0.7, Lunch = 1.0, Dinner = 1.0 · Year 2: After-Hours = 0.7, Lunch = 1.0, Dinner = 1.0 · Year 3: After-Hours = 1.0, Lunch = 1.0, Dinner = 1.25 Cost Control. Cost of goods sold have been c alculated as a percentage of sales and will be monitored on a daily basis in order to keep Cost of Food within the range of 31 - 33%, Bar Costs within 28 - 31%, and Cost of Beverages (Non Alcohol) below 9%. With a foc us on Cost Control, we anticipate 6 months to fine tune the restaurant operations and manage our costs within the defined tolerance range. Inventory turnover and Accounts Payable. Ac counts rec eivable turnover is calculated to be 0 days, as payment is rendered with service. Inventory is turned on a 7 day cycle as inventory is used daily within all categories, and ac counts payable are projec ted to be 30 days.8.2.1 Risk Analysis/Mitigation 1. How do we allow an adequate startup period and capital to launch the concept and grow our customer base in a competitive sector? Our financial plan is budgeted to support the Worst-Case business sc enario. We addressed the financial risk as follows: · We looked at our monthly break-even. · We calculated worst-case monthly financial shortfall based on the ramp-up sales percentages outlined in our financial assumptions. · We budgeted operational shortfall in an operational contingency budget that we will utilize if the need arises. 2. How do we ensure we have addressed all resource gaps, and have the right industry knowledge? Owners Alex Hunte and Peter Smith have a combined 20 years of Restaurant Management, Operations and Business Management Experience. The Financial Plan incorporates a budget for an Atlanta Restaurant Consulting group. Their services are budgeted for the business start-up analysis, rollout, and on retainer for 4 months of business operations. The selec ted firm has experience with over 72 Restaurant launches, specializing in the Atlanta Market. We will be rec ruiting a seasoned chef (national search) whose style is in accord with the Restaurant concept and our market segment. We will be offering an equity interest to our selec t Chef to maintain the industry knowledge. Our Ac counting service will be contrac ted to a firm specializing in Restaurant ac counting. 3. The current Economic slowdown and recovery state was a key consideration in our Page 33
  • 38. Zara Restaurant & Loungerestaurant concept. How do we manage a successful restaurant in current marketconditions? Our original effort was to open a restaurant twice the proposed size. As we are in the midst of an economic rec overy, we have sc aled bac k the size to reduce business overhead, startup requirements, and business operating capital. Another mitigation has been our overall Restaurant concept. We have the menu priced at a mid-tier level with no entrée over $20. In addition, we have an extended Tapas and Appetizer selec tion priced between $3.50 - $9.50, allowing budget dining in a distinguished restaurant.4. How do we confirm that our Funding Requirement is sufficient? Peter Smith has an extensive bac kground in restaurant startup. He is currently an International Consultant for various restaurant ventures, and we will use his expertise in past projec ts as a comparative basis. We have leveraged our membership with the National Restaurant Association to look at industry averages for this market segment for Restaurant startup and Operations. Additionally, we included a contingency buffer in the financial estimates to ac count for any potential cost variance. We have worked with our Restaurant Consulting firm to validate our cost estimates to their industry knowledge.5. How do we know we have selected the right location for this concept? Again we will draw on the Consulting group that has the expertise in site selec tion and lease negotiation. In all, there are no guarantees with loc ation, but we took a very objec tive approach with our concept. Instead of going in with a predefined business concept, we let the Market Analysis define the need. Based on the results, the Zara Restaurant concept was formed specific to Midtown Atlanta. Site selec tion was based on space, visibility, and functionality; the city grant award confirmed our dec ision.6. What if there is an additional need for Business Capital after the Restaurant hasexhausted its 6-month buffer? Our intent is to be a self-sufficient business far in advance of the 6-month probation period. But as we are considering all contingencies, we have looked at this risk. We have ac counted for an operational contingency budget that will be used to supplement any slow periods. Our next step would be to approach our private investors for capital by extending their return on investment. We would also look to the partners capital reserves as another source of funds.Table: General AssumptionsGeneral Assumptions Year 1 Year 2 Year 3 Year 4 Year 5Plan Month 1 2 3 4 5Current Interest Rate 6.00% 6.00% 6.00% 6.00% 6.00%Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00%Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00%Other 0 0 0 0 0 Page 34
  • 39. Zara Restaurant & Lounge8.3 Profit and Loss Statement The most important assumption in the Projec ted Profit and Loss statement is the gross margin. We show an adjustment increase in Year 2 as we exit our start-up phase of the business and move into our expec ted annual sales forec ast. This transition shows the restaurant managing through its start-up period, and gaining efficiency and customer loyalty. In summary, the restaurant will develop its customer base and reputation and the growth will pick up more rapidly towards the second and third years of business. Month-by-month assumptions for Profit and Loss are included in the appendices. Page 35
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  • 42. Zara Restaurant & LoungeTable: Profit and LossPro Forma Profit and Loss Year 1 Year 2 Year 3 Year 4 Year 5Sales $1,073,769 $1,211,088 $1,279,204 $1,341,260 $1,406,670Direct Cost of Sales $371,416 $398,407 $406,976 $415,276 $423,597Other $0 $0 $0 $0 $0Total Cost of Sales $371,416 $398,407 $406,976 $415,276 $423,597Gross Margin $702,353 $812,681 $872,228 $925,984 $983,072Gross Margin % 65.41% 67.10% 68.19% 69.04% 69.89%ExpensesPayroll $399,588 $400,788 $429,828 $431,128 $432,728Marketing/Promotion $18,656 $22,000 $25,000 $15,000 $15,000Depreciation $6,500 $6,500 $6,500 $6,500 $6,500Leased Equipment $12,000 $12,000 $12,000 $12,000 $12,000Accounting/Payroll Processing $6,600 $6,600 $6,600 $6,600 $6,600Legal Retainer Fees $2,400 $2,400 $2,400 $2,400 $2,400Business Licenses & Permits $6,000 $6,000 $6,000 $6,000 $6,000Credit Card Expense $18,576 $19,983 $21,107 $22,131 $23,210Bank Fees $1,200 $1,200 $1,200 $1,200 $1,200Music & Entertainment $3,744 $3,744 $3,744 $3,744 $3,744Training / Employee Retention Programs $0 $5,008 $6,008 $6,008 $6,008Repairs & Maintenance $9,000 $9,000 $9,000 $9,000 $9,000Utility Services (Gas/Electric/Water/Sewer) $24,996 $26,496 $27,821 $28,933 $30,091Telephone/Communication Expense $1,800 $1,800 $1,800 $1,800 $1,800Insurance: Fire/Theft/Liability/Liquor/ $20,400 $21,624 $22,705 $23,613 $24,558ProductRestaurant Occupancy Cost (Lease) $75,000 $77,250 $79,568 $81,955 $84,413Payroll Taxes (FICA/FUTA/SUTA) & $0 $0 $0 $0 $0Employee BenefitsExterminator/Trash Removal $4,800 $4,800 $4,800 $4,800 $4,800Dishware/Uniforms/Cleaning Supplies/ $11,760 $12,466 $13,089 $13,612 $14,157DecorPrinting/Paper/Postage/Subscriptions $9,156 $9,500 $9,500 $9,500 $9,500Facility (Exterior Cleaning/Grease Trap/ $3,333 $3,640 $3,640 $3,640 $3,640Hood/Windows,etc.)R&D Meals $2,200 $2,400 $2,400 $2,400 $2,400General Business Comps $12,400 $22,850 $23,125 $23,125 $23,125Owner Comps $2,124 $2,124 $2,124 $2,124 $2,124Other Expenses (ComAreaMaint, etc.) $4,200 $4,200 $4,200 $4,200 $4,200Total Operating Expenses $656,433 $684,372 $724,158 $721,414 $729,198Profit Before Interest and Taxes $45,920 $128,309 $148,070 $204,571 $253,875EBITDA $52,420 $134,809 $154,570 $211,071 $260,375 Interest Expense $19,189 $15,984 $12,640 $9,296 $5,952 Taxes Incurred $8,020 $33,698 $40,629 $58,582 $74,377Net Profit $18,712 $78,628 $94,801 $136,692 $173,546Net Profit/Sales 1.74% 6.49% 7.41% 10.19% 12.34% Page 38
  • 43. Zara Restaurant & Lounge8.4 Break-even Analysis For our First Year Break-Even Analysis, we have an average running fixed costs of $60,230 per month which includes our full payroll, rent, and utilities, and an estimation of other running costs. With direc t cost of goods (inventory, in this plan) at 35% of sales, our monthly break- even point is $92,081. We will surpass our break-even point in October of our first year. As we exit the start-up phase of the business and foc us on cost control, we will drive the Cost of Goods Sold (COGS) down, dropping our break-even value, and increasing our Gross Margin. Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even $83,630 Assumptions: Average Percent Variable Cost 35% Estimated Monthly Fixed Cost $54,703 Page 39
  • 44. Zara Restaurant & Lounge8.5 Cash Flow Statement The cash flow depends on assumptions for inventory turnover and payment days. We have no sales on credit, so our cash flow does not trac k ac counts rec eivable. Our projec ted same- day collec tion is critical, and is reasonable and customary in the restaurant industry. We do not expec t to need any additional financial support, even when we reach the less profitable months, as the downturns are incorporated into the monthly revenue variance figures. Month- by-month assumptions for projec ted cash flow are included in the appendices. Page 40
  • 45. Zara Restaurant & LoungeTable: Cash FlowPro Forma Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5Cash ReceivedCash from OperationsCash Sales $1,073,769 $1,211,088 $1,279,204 $1,341,260 $1,406,670Subtotal Cash from Operations $1,073,769 $1,211,088 $1,279,204 $1,341,260 $1,406,670Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0Subtotal Cash Received $1,073,769 $1,211,088 $1,279,204 $1,341,260 $1,406,670Expenditures Year 1 Year 2 Year 3 Year 4 Year 5Expenditures from OperationsCash Spending $399,588 $400,788 $429,828 $431,128 $432,728Bill Payments $601,114 $724,989 $745,324 $765,976 $792,442Subtotal Spent on Operations $1,000,702 $1,125,777 $1,175,152 $1,197,104 $1,225,170Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $47,772 $47,772 $47,772 $47,772 $47,772Purchase Other Current Assets $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0Dividends $0 $20,000 $10,000 $10,000 $15,000Subtotal Cash Spent $1,048,474 $1,193,549 $1,232,924 $1,254,876 $1,287,942Net Cash Flow $25,295 $17,539 $46,280 $86,384 $118,727Cash Balance $172,276 $189,815 $236,095 $322,479 $441,206 Page 41
  • 46. Zara Restaurant & Lounge8.6 Balance Sheet Statement The projec ted Balance Sheet is quite solid. We do not anticipate difficulty meeting our debt obligations based on ac hieving the specific goals outlined in this plan. On a linear projec tion, Zara Restaurant & Lounge has a positive Net Worth beginning in Year 3. Table: Balance Sheet Pro Forma Balance Sheet Year 1 Year 2 Year 3 Year 4 Year 5 Assets Current Assets Cash $172,276 $189,815 $236,095 $322,479 $441,206 Inventory $37,839 $39,175 $38,109 $38,843 $39,608 Other Current Assets $73,311 $73,311 $73,311 $73,311 $73,311 Total Current Assets $283,426 $302,300 $347,514 $434,633 $554,125 Long-term Assets Long-term Assets $65,000 $65,000 $65,000 $65,000 $65,000 Accumulated Depreciation $6,500 $13,000 $19,500 $26,000 $32,500 Total Long-term Assets $58,500 $52,000 $45,500 $39,000 $32,500 Total Assets $341,926 $354,300 $393,014 $473,633 $586,625 Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5 Current Liabilities Accounts Payable $58,194 $59,713 $61,398 $63,097 $65,315 Current Borrowing $0 $0 $0 $0 $0 Other Current Liabilities $0 $0 $0 $0 $0 Subtotal Current Liabilities $58,194 $59,713 $61,398 $63,097 $65,315 Long-term Liabilities $252,228 $204,456 $156,684 $108,912 $61,140 Total Liabilities $310,422 $264,169 $218,082 $172,009 $126,455 Paid-in Capital $440,000 $440,000 $440,000 $440,000 $440,000 Retained Earnings ($427,209) ($428,496) ($359,869) ($275,068) ($153,375) Earnings $18,712 $78,628 $94,801 $136,692 $173,546 Total Capital $31,504 $90,131 $174,932 $301,625 $460,171 Total Liabilities and Capital $341,926 $354,300 $393,014 $473,633 $586,625 Net Worth $31,504 $90,131 $174,932 $301,625 $460,171 Page 42
  • 47. Zara Restaurant & Lounge8.7 Business Ratios Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5812, Ethnic Food Restaurants, are shown for comparison. The following table outlines some of the more important ratios from the Ethnic Food Restaurants industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 5812.01. Page 43
  • 48. Zara Restaurant & LoungeTable: RatiosRatio Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Industry ProfileSales Growth n.a. 12.79% 5.62% 4.85% 4.88% 6.96%Percent of Total AssetsInventory 11.07% 11.06% 9.70% 8.20% 6.75% 3.90%Other Current Assets 21.44% 20.69% 18.65% 15.48% 12.50% 28.39%Total Current Assets 82.89% 85.32% 88.42% 91.77% 94.46% 37.68%Long-term Assets 17.11% 14.68% 11.58% 8.23% 5.54% 62.32%Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Current Liabilities 17.02% 16.85% 15.62% 13.32% 11.13% 19.17%Long-term Liabilities 73.77% 57.71% 39.87% 23.00% 10.42% 29.21%Total Liabilities 90.79% 74.56% 55.49% 36.32% 21.56% 48.38%Net Worth 9.21% 25.44% 44.51% 63.68% 78.44% 51.62%Percent of SalesSales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Gross Margin 65.41% 67.10% 68.19% 69.04% 69.89% 59.31%Selling, General & Administrative Expenses 62.09% 59.39% 59.95% 58.34% 57.31% 39.09%Advertising Expenses 1.74% 2.07% 2.00% 0.00% 0.00% 2.75%Profit Before Interest and Taxes 4.28% 10.59% 11.58% 15.25% 18.05% 1.59%Main RatiosCurrent 4.87 5.06 5.66 6.89 8.48 1.26Quick 4.22 4.41 5.04 6.27 7.88 0.87Total Debt to Total Assets 90.79% 74.56% 55.49% 36.32% 21.56% 3.27%Pre-tax Return on Net Worth 84.85% 124.62% 77.42% 64.74% 53.88% 54.38%Pre-tax Return on Assets 7.82% 31.70% 34.46% 41.23% 42.26% 7.17%Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5Net Profit Margin 1.74% 6.49% 7.41% 10.19% 12.34% n.aReturn on Equity 59.40% 87.24% 54.19% 45.32% 37.71% n.aActivity RatiosInventory Turnover 10.91 10.35 10.53 10.79 10.80 n.aAccounts Payable Turnover 11.33 12.17 12.17 12.17 12.17 n.aPayment Days 27 30 30 30 29 n.aTotal Asset Turnover 3.14 3.42 3.25 2.83 2.40 n.aDebt RatiosDebt to Net Worth 9.85 2.93 1.25 0.57 0.27 n.aCurrent Liab. to Liab. 0.19 0.23 0.28 0.37 0.52 n.aLiquidity RatiosNet Working Capital $225,232 $242,587 $286,116 $371,537 $488,810 n.aInterest Coverage 2.39 8.03 11.71 22.01 42.65 n.aAdditional RatiosAssets to Sales 0.32 0.29 0.31 0.35 0.42 n.aCurrent Debt/Total Assets 17% 17% 16% 13% 11% n.aAcid Test 4.22 4.41 5.04 6.27 7.88 n.aSales/Net Worth 34.08 13.44 7.31 4.45 3.06 n.aDividend Payout 0.00 0.25 0.11 0.07 0.09 n.a Page 44
  • 49. Zara Restaurant & Lounge8.8 Expansion, Payback & Exit Strategy In addressing this question we look at the Exit Strategy as a definition of our business vision and goals, as well as a contingency in the event the business is unsuccessful. We have addressed this question at several levels: Expansion as a Business Goal We have set multiple financial goals to grow the success of the Zara concept, and compound the profit return for Zara Investors. 1. Expansion (Option 1): Our overall goal to maintain Zara as a unique and ec lec tic concept. Based on projec tions, the business has captured market share by the end of the first year. In addition Year 2 brings an increased sales and profit margin to sustain the addition of a full-time General Manager. By second quarter of Year 2, the owners will look to launch a second restaurant concept. This is not a chain, but another unique restaurant concept with strong growth potential. Expansion will be considered with our Financial bac kers and Investor partners. 2. Expansion (Option 2): Throughout our business plan we have stayed foc us that Zara would be successful as a larger venue, with greater sales capacity and revenue potential. Our objec tive with the site selec tion and lease negotiation is to have the opportunity to expand the restaurant as a logical growth and profit plan. 3. Private Sale: We are in the business of making money. At the close of Year 3, we see Zara as meeting 80.4% of its optimum sales potential with the current seating and space alloc ation. At this stage the business debt is reduced, profit margins are increasing, and Zara has established market share. We will look at the private sale of the majority interest via A) Leveraged Buyout, or B) A larger Restaurant consortium. In both c ases, our interest is in delivering healthy profits to our Investors and Financial bac kers. Sales and profit margins will be based on the restaurant valuation in Year 3. 4. Financial Solvency: The financial projec tions indicate that exit will be ac hievable over 3 years for the operating capital line of credit. Under a realistic sc enario the Company should have over $70,000 in c ash in the bank after income taxes the second year. The entire financial debt would be retired by Year 7. Exit Strategy to Retire the Business We at Zara are committed to our concept and its viability. We step into this venture with confidence and the success of our respec tive prior business efforts. No one attempts a business anticipating failure, however sometimes ventures do not fulfill their promise. In the event that our venture cannot ac hieve profitability and retire the encumbrances, we will first attempt to sell the operation and use the proc eeds to clear all outstanding balances. If we are unable to sell the operation for sufficient proc eeds we will forced to default whereby the SBA loan will be in senior standing. Any further outstanding balances will be borne by the investors on a weighted percentage basis of the total amounts due. Page 45
  • 50. AppendixTable: Sales ForecastSales Forecast Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12SalesTotal Sales Food 0% $44,579 $50,948 $57,975 $65,441 $79,057 $81,253 $83,449 $74,665 $83,449 $74,665 $79,057 $79,057Total Sales Bar/Beverages 0% $11,499 $13,141 $14,954 $16,880 $20,392 $20,958 $21,524 $19,259 $21,524 $19,259 $20,392 $20,392Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Sales $56,078 $64,089 $72,929 $82,321 $99,449 $102,211 $104,973 $93,924 $104,973 $93,924 $99,449 $99,449Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Total Cost of Sales: Food $15,603 $17,832 $20,291 $22,904 $27,670 $28,439 $29,207 $26,133 $29,207 $26,133 $27,670 $27,670Total Cost of Sales: Bar/Beverages $3,795 $4,337 $4,935 $5,570 $6,729 $6,916 $7,103 $6,355 $7,103 $6,355 $6,729 $6,729Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Direct Cost of Sales $19,397 $22,168 $25,226 $28,475 $34,399 $35,355 $36,310 $32,488 $36,310 $32,488 $34,399 $34,399 Page 1
  • 51. AppendixTable: General AssumptionsGeneral Assumptions Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Plan Month 1 2 3 4 5 6 7 8 9 10 11 12Current Interest Rate 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%Other 0 0 0 0 0 0 0 0 0 0 0 0 Page 2
  • 52. AppendixTable: Profit and LossPro Forma Profit and Loss Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Sales $56,078 $64,089 $72,929 $82,321 $99,449 $102,211 $104,973 $93,924 $104,973 $93,924 $99,449 $99,449Direct Cost of Sales $19,397 $22,168 $25,226 $28,475 $34,399 $35,355 $36,310 $32,488 $36,310 $32,488 $34,399 $34,399Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Cost of Sales $19,397 $22,168 $25,226 $28,475 $34,399 $35,355 $36,310 $32,488 $36,310 $32,488 $34,399 $34,399Gross Margin $36,681 $41,921 $47,703 $53,846 $65,050 $66,856 $68,663 $61,436 $68,663 $61,436 $65,050 $65,050Gross Margin % 65.41% 65.41% 65.41% 65.41% 65.41% 65.41% 65.41% 65.41% 65.41% 65.41% 65.41% 65.41%ExpensesPayroll $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299Marketing/Promotion $1,457 $1,457 $1,457 $6,457 $0 $1,457 $2,457 $1,457 $0 $0 $0 $2,457Depreciation $542 $542 $542 $542 $542 $542 $542 $542 $542 $542 $542 $542Leased Equipment $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000Accounting/Payroll Processing $550 $550 $550 $550 $550 $550 $550 $550 $550 $550 $550 $550Legal Retainer Fees $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200Business Licenses & Permits $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Credit Card Expense $1,548 $1,548 $1,548 $1,548 $1,548 $1,548 $1,548 $1,548 $1,548 $1,548 $1,548 $1,548Bank Fees $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100Music & Entertainment $312 $312 $312 $312 $312 $312 $312 $312 $312 $312 $312 $312Training / Employee Retention $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0ProgramsRepairs & Maintenance $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750Utility Services (Gas/Electric/ $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083Water/Sewer)Telephone/Communication $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150ExpenseInsurance: Fire/Theft/Liability/ $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700Liquor/ProductRestaurant Occupancy Cost $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250(Lease)Payroll Taxes (FICA/FUTA/SUTA) & 17% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Employee BenefitsExterminator/Trash Removal $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400Dishware/Uniforms/Cleaning $980 $980 $980 $980 $980 $980 $980 $980 $980 $980 $980 $980Supplies/DecorPrinting/Paper/Postage/ $763 $763 $763 $763 $763 $763 $763 $763 $763 $763 $763 $763Subscriptions Page 3
  • 53. AppendixFacility (Exterior Cleaning/ $0 $303 $303 $303 $303 $303 $303 $303 $303 $303 $303 $303Grease Trap/Hood/Windows,etc.)R&D Meals $0 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200General Business Comps $0 $0 $1,240 $1,240 $1,240 $1,240 $1,240 $1,240 $1,240 $1,240 $1,240 $1,240Owner Comps 15% $177 $177 $177 $177 $177 $177 $177 $177 $177 $177 $177 $177Other Expenses (ComAreaMaint, $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350etc.)Total Operating Expenses $53,111 $53,614 $54,854 $59,854 $53,397 $54,854 $55,854 $54,854 $53,397 $53,397 $53,397 $55,854Profit Before Interest and Taxes ($16,430) ($11,693) ($7,151) ($6,007) $11,653 $12,003 $12,809 $6,582 $15,266 $8,039 $11,653 $9,196EBITDA ($15,888) ($11,151) ($6,609) ($5,466) $12,195 $12,544 $13,351 $7,124 $15,808 $8,581 $12,195 $9,738 Interest Expense $1,727 $1,704 $1,680 $1,657 $1,634 $1,611 $1,587 $1,564 $1,541 $1,518 $1,495 $1,471 Taxes Incurred ($5,447) ($4,019) ($2,649) ($2,299) $3,006 $3,118 $3,367 $1,505 $4,118 $1,956 $3,048 $2,317Net Profit ($12,710) ($9,378) ($6,182) ($5,365) $7,013 $7,274 $7,855 $3,513 $9,608 $4,565 $7,111 $5,407Net Profit/Sales -22.66% -14.63% -8.48% -6.52% 7.05% 7.12% 7.48% 3.74% 9.15% 4.86% 7.15% 5.44% Page 4
  • 54. AppendixTable: Cash FlowPro Forma Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Cash ReceivedCash from OperationsCash Sales $56,078 $64,089 $72,929 $82,321 $99,449 $102,211 $104,973 $93,924 $104,973 $93,924 $99,449 $99,449Subtotal Cash from Operations $56,078 $64,089 $72,929 $82,321 $99,449 $102,211 $104,973 $93,924 $104,973 $93,924 $99,449 $99,449Additional Cash ReceivedSales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Received $56,078 $64,089 $72,929 $82,321 $99,449 $102,211 $104,973 $93,924 $104,973 $93,924 $99,449 $99,449Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Expenditures from OperationsCash Spending $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299Bill Payments $959 $29,247 $42,873 $48,926 $57,675 $65,013 $62,220 $63,929 $52,812 $65,248 $51,624 $60,586Subtotal Spent on Operations $34,258 $62,546 $76,172 $82,225 $90,974 $98,312 $95,519 $97,228 $86,111 $98,547 $84,923 $93,885Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $3,981 $3,981 $3,981 $3,981 $3,981 $3,981 $3,981 $3,981 $3,981 $3,981 $3,981 $3,981Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Spent $38,239 $66,527 $80,153 $86,206 $94,955 $102,293 $99,500 $101,209 $90,092 $102,528 $88,904 $97,866Net Cash Flow $17,839 ($2,438) ($7,224) ($3,885) $4,494 ($82) $5,473 ($7,285) $14,881 ($8,604) $10,545 $1,583Cash Balance $164,819 $162,381 $155,157 $151,272 $155,765 $155,683 $161,157 $153,871 $168,752 $160,148 $170,693 $172,276 Page 5
  • 55. AppendixTable: Balance SheetPro Forma Balance Sheet Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Assets Starting BalancesCurrent AssetsCash $146,980 $164,819 $162,381 $155,157 $151,272 $155,765 $155,683 $161,157 $153,871 $168,752 $160,148 $170,693 $172,276Inventory $27,500 $21,337 $24,385 $27,749 $31,322 $37,839 $38,890 $39,941 $35,737 $39,941 $35,737 $37,839 $37,839Other Current Assets $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311 $73,311Total Current Assets $247,791 $259,467 $260,077 $256,217 $255,905 $266,915 $267,884 $274,409 $262,919 $282,004 $269,196 $281,843 $283,426Long-term AssetsLong-term Assets $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000Accumulated Depreciation $0 $542 $1,083 $1,625 $2,167 $2,708 $3,250 $3,792 $4,333 $4,875 $5,417 $5,958 $6,500Total Long-term Assets $65,000 $64,458 $63,917 $63,375 $62,833 $62,292 $61,750 $61,208 $60,667 $60,125 $59,583 $59,042 $58,500Total Assets $312,791 $323,925 $323,994 $319,592 $318,738 $329,207 $329,634 $335,617 $323,586 $342,129 $328,779 $340,885 $341,926Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Current LiabilitiesAccounts Payable $0 $27,825 $41,252 $47,012 $55,505 $62,942 $60,075 $62,184 $50,621 $63,538 $49,604 $58,580 $58,194Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $0 $27,825 $41,252 $47,012 $55,505 $62,942 $60,075 $62,184 $50,621 $63,538 $49,604 $58,580 $58,194Long-term Liabilities $300,000 $296,019 $292,038 $288,057 $284,076 $280,095 $276,114 $272,133 $268,152 $264,171 $260,190 $256,209 $252,228Total Liabilities $300,000 $323,844 $333,290 $335,069 $339,581 $343,037 $336,189 $334,317 $318,773 $327,709 $309,794 $314,789 $310,422Paid-in Capital $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000 $440,000Retained Earnings ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209) ($427,209)Earnings $0 ($12,710) ($22,087) ($28,269) ($33,634) ($26,621) ($19,346) ($11,491) ($7,979) $1,629 $6,194 $13,305 $18,712Total Capital $12,791 $82 ($9,296) ($15,478) ($20,843) ($13,829) ($6,555) $1,300 $4,813 $14,420 $18,985 $26,096 $31,504Total Liabilities and Capital $312,791 $323,925 $323,994 $319,592 $318,738 $329,207 $329,634 $335,617 $323,586 $342,129 $328,779 $340,885 $341,926Net Worth $12,791 $82 ($9,296) ($15,478) ($20,843) ($13,829) ($6,555) $1,300 $4,813 $14,420 $18,985 $26,096 $31,504 Page 6
  • 56. AppendixTable: PersonnelPersonnel Plan Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12General Manager (Year 2+) 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Partner/Manager 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000Partner/Asst. Manager/Exec. Chef 0% $2,680 $2,680 $2,680 $2,680 $2,680 $2,680 $2,680 $2,680 $2,680 $2,680 $2,680 $2,680Hostess (Full Time) 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000Hostess (Part Time) 0% $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100Waitperson 1 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 2 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 3 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 4 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 5 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 6 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 7 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 8 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Waitperson 9 0% $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470 $470Wait/Barperson 0% $870 $870 $870 $870 $870 $870 $870 $870 $870 $870 $870 $870Bartender 1 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200Bartender 2 0% $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600Busboy 1 0% $760 $760 $760 $760 $760 $760 $760 $760 $760 $760 $760 $760Busboy 2 0% $980 $980 $980 $980 $980 $980 $980 $980 $980 $980 $980 $980Busboy 3 0% $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600Assistant Chef 0% $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700Sous Chef 0% $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700Cook 1 0% $2,020 $2,020 $2,020 $2,020 $2,020 $2,020 $2,020 $2,020 $2,020 $2,020 $2,020 $2,020Cook 2 0% $1,580 $1,580 $1,580 $1,580 $1,580 $1,580 $1,580 $1,580 $1,580 $1,580 $1,580 $1,580Prep Cook/Dishwasher 0% $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024Prep Cook/Dishwasher/Cleaning 0% $1,080 $1,080 $1,080 $1,080 $1,080 $1,080 $1,080 $1,080 $1,080 $1,080 $1,080 $1,080Dishwasher 1 0% $720 $720 $720 $720 $720 $720 $720 $720 $720 $720 $720 $720Dishwasher 2 0% $475 $475 $475 $475 $475 $475 $475 $475 $475 $475 $475 $475Cleaning/Dishwasher 0% $980 $980 $980 $980 $980 $980 $980 $980 $980 $980 $980 $980Open 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total People 20 20 20 20 20 20 20 20 20 20 20 20Total Payroll $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 $33,299 Page 7