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Business plan angelina's cantinas fratton for slideshare

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This is a business plan I developed in the course of 2012, at my own initiative after I noticed so many beautiful buildings going to waste. I was offered a year's free rent for this one, but was unable to accept the offer as I obviously would have needed at least one suitable business partner for this plan. I also carried out a less thorough study for another local property. I also have a condensed version of this report (not for a specific building).

Maybe someone can still put this to some good use.

Published in: Business
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Business plan angelina's cantinas fratton for slideshare

  1. 1. Angelina’s Cantina Business plan for the redevelopment of former pub The Contented Pig in Fratton, Portsmouth, UK Photo: A passing pedestrian eating chips at The Contented Pig in Fratton on 19 June 2012 June 2012 Updated October 2012 Business model for redevelopment of derelict commercial properties in the UK Angelina Souren 6F Kingston Road Portsmouth PO1 5RZ United Kingdom
  2. 2. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page1 Contents 1.0 Summary ............................................................................................. 2 2.0 Introduction.......................................................................................... 4 2.1 General market background ............................................................... 10 3.0 The concept ........................................................................................ 12 4.0 Market analyses .................................................................................. 19 4.1 Market analysis fast food in general .................................................... 19 4.2 Market analysis ice cream .................................................................. 21 4.3 Market analysis Tex-Mex.................................................................... 29 4.4 Market analysis falafel ....................................................................... 31 4.5 Market analysis fish & chips ............................................................... 35 5.0 The Fratton location ............................................................................. 38 6.0 Marketing strategy............................................................................... 43 7.0 Management and staffing ..................................................................... 45 8.0 Implementation................................................................................... 47 9.0 Financial plan...................................................................................... 50 10.0 Key factors for success ....................................................................... 69 Appendix Startup budgets, 34 pages
  3. 3. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page2 1.0 Summary This report contains a proposal for the development of an empty commercial property – former pub The Contented Pig in Fratton, Portsmouth – into a micro- mall with a fast-food restaurant. This concept latches on to market developments, and addresses the demand for healthier and more varied fast foods. The restaurant also has a MiniMart, which includes products sold by retailers on the first floor and items like umbrellas, tortilla chips, Vosges chocolates, and art posters. It will also offer some convenience items, such as teas and coffees. Its weekly schedule encompasses face-painting and balloon-sculpting; we also want to schedule live music and will have 3D-street art. We want an ambulant family/children’s photographer on the site as well. Customers will be able to make donations toward a food event and a counter displays the current total. There will be a photocopy machine for customer use, and a community table. We also offer take-away and delivery. Although our restaurant brand will be our own – Angelina’s Cantina - its food offer is “multi-brand”. Multi-branding may become the future of the quick-service food industry, and is expected to “wow” customers. Multi-branding will allow us to eliminate the power of the so-called veto vote (“No fish & chips!” “I won’t go if they don’t have vegetarian food.”), hence attract groups of people with differing tastes. Consumers prefer multi-brand restaurants six to one over single- brand restaurants, says fast-food operator Yum! Brands. The fast-food restaurant will have at least the following food types: • Luxury ice cream (Italian); • Falafel; • Tex-Mex; • Fish & chips. In the winter, we will have hot soups and hot chocolates to help balance the dip in the ice cream trade. As winters in Portsmouth are relatively mild, the dip here is not as severe as it is in areas with a lot of snow and ice in the winter. I have looked at several buildings in Portsmouth and really like The Contented Pig in Fratton. The building is well known and has played a role in the community for more than two centuries. It is highly visible, but is not listed as a monument. It has a decent footfall and no food offer in the immediate surroundings (200 to 500 metres, with no food offered on its own side of the street within about 500 metres). On football match days, footfall is much higher, and so is vehicle traffic, which is already high on all days. Passing motorists and pedestrians cannot help but notice the changes to the venue and become aware of the new opportunities. There is a wonderful space for an outdoor terrace (with activities) – oriented toward the west-southwest – as well as parking, and the venue can be accessed on foot from three directions. The building is also ideal for having an ice-cream vending window opening into the street in the summer; a second window is envisaged on the side of the terrace. The building’s second floor would be converted into retail space, accessible through a highly visible staircase as well as a lift. The top floor or the top floor of the wing could become housing for the manager (i.e. me, certainly in the beginning). The side wing’s ground floor could house the office.
  4. 4. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page3 Financial picture The building was originally purchased in July 2008 for £475,000. Without having details for the building – such as “does it require treatment for dry rot?” – I estimate that its renovation will cost around £200,000 (see startup budgets at the back of this report). Launching the commercial enterprise Angelina’s Cantina requires £600,000; this includes an operational buffer of £100,000 and buffers in the actual startup costs (undefined capital expenditure listed as “other costs”). Although the building’s renovation is an essential condition for starting this enterprise, strictly speaking, it is not part of it. The value of the property will have increased after the renovation (as would the value of any surrounding properties). I expect to be able to turn over between £400,000 and £1,200,000 per year. I made calculations for a £600,000 turnover and the following four scenarios: • Operating at a 35% margin and a £800,000 loan for 10 years at 8%; • Operating at a 25% margin and a £800,000 loan for 10 years at 8%; • Operating at a 25% margin and a £600,000 loan for 10 years at 8%; • Operating at a 25% margin and a £600,000 loan for 5 years at 8%. Taxes – other than council tax – were not taken into account yet. In the first scenario, we would be operating at a loss during the first months and ending in the black at the end of the year. The balance sheet, of course, would look very negative because of the loan. The fourth scenario signifies savings of about £150,000 on the loan repayments. After the first year, we will have around £40,000 extra cash, on top of the £100,000 buffer. This buffer could go toward paying off our loan faster, could be applied toward the renovation costs (depending on the source/s of our funding) or could start earning some interest. No income from the retail floor (shop rental, room hire) is included in these scenarios. The MiniMart’s turnover is set at reaching £50,000 at the end of the year, but I did not research its potential, and I think it can be higher, for instance because it will include artworks and reproductions. All scenarios include 12 fte employees who will receive a so-called living wage (which is still only at the level of the Netherlands’ minimum wage), and in principle also a £100 tax-free vacation bonus and a £100 tax-free Christmas bonus. The bonuses are not part of their contracts and are planned as a surprise. The ground floor will be finished first. In the month before opening, we will run at least 4 sessions of about 2 hours to which we invite 20 volunteers from the public, including potential job candidates. These sessions will test different food varieties as well as pricing. They will also give me a chance to observe potential job candidates in a more or less operational setting in which they will be more relaxed and more genuine than in job interviews. Staff will be trained in the week before opening. This training will include obtaining food hygiene certificates for those who don’t have them yet, and health and safety matters. It will also result in the establishment of preliminary Standard Operating Procedures, to be included in manuals for each section of the enterprise.
  5. 5. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page4 2.0 Introduction The UK currently has many empty commercial properties as town centre vacancy rates have doubled over 2010 and 2011. In February 2012, the percentage of empty shops hit the highest level ever recorded - 14.6% - and it has stayed at that level throughout March, April and May. On 5 September, Tiffany Holland reported in RetailWeek that vacancy rates “remain stubbornly high”. Photo: Two empty shops (opposite a third empty shop, not visible in this photo) Cascades shopping centre, Portsmouth, 19 June 2012 At the same time, as many as fifty pubs close each week. Most are demolished or converted into housing, but others remain empty for years. Apart from simply being a waste of resources, abandoned buildings also are a problem as they are often broken into and sustain fire damage due to arson. Not surprisingly, derelict and empty properties have a detrimental effect on the prices of the surrounding properties. It is easy to blame the economy, but the real reason for the many empty properties is more complicated. “A new approach is needed to attract the public and meet its changing tastes and demands”, says Mary Portas about it (The Portas Review, An independent review into the future of our high streets, 2011). The public does not want more of the old, which it has already abandoned. On the other hand, the fast-food sector in the UK is doing very well in spite of the recession (in contrast to regular restaurants). 'There’s a curious obsession with
  6. 6. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page5 takeaways in the UK and despite a precarious economic situation, they are as popular as always.' ( Read more at: http://www.dailymail.co.uk/news/article- 2074180/Average-Briton-eats-2-500-takeaways-lifetime-thats-46- year.html#ixzz2Ac7hGyMQ ) Counter service is much faster than service at traditional restaurants, and allows annual turnovers that are 3 to 5 times higher (after Peter Smale, marketing director 1976 – 1983 of former fast-food chain Wimpy, on the BBC in 2012, in “The men who made us fat”). Around town, new food-related businesses such as coffee shops and notably branches of fast-food chains have been popping up like mushrooms after a rain shower. However, they tend to offer merely more of the same. Nothing is refreshingly new. The number of empty seats in some of those new tea and coffee establishments shortly after their start makes obvious that they likely won’t last long. The owners may also have overlooked footfall. A marked contrast can be observed with one new establishment that seemed to be flooded with new customers from day one because it seemed to offer something new at a location that is hard to miss. It’s the Garage Lounge, on 1 Albert Road. Work was underway for a long time, making me curious as to what was going on, and then suddenly, it was there, in the first half of 2012. It has long opening hours, of 7am until 11pm. One online review for it said the following: “This is a great alternative to going to the pub on an evening, which seems to be our only other option in the UK! I hope more cafes will see that this is what people want, and will also jump on board. I know of an ice cream parlour in Eastbourne of all places that does a roaring trade in the evening!” Others, however, commented that the food at the Garage Lounge could be better and found the level of care to detail lacking. One person mentioned The Tenth Hole on Eastern Parade, which has a slightly more enticing menu (note that it includes falafel). Several people mention the fact that the establishment seems to have become too focused on getting too many people seated (in an attempt to meet its targets?). First of all, if you want to seat strangers at the same table in Britain, you have to offer something to make up for it. My plan has included this from the start, and in a different form, as on purpose. Also, this is why having take-away can be a real plus, and having delivery helps too. These comments all indicate that customers want more than they are currently getting. They are eager for something new, and I am curious to see whether the Garage Lounge will remain as busy as it has been so far. Also, I think that a large portion of Portsmouth’s population – the more down-to-earth people – is not attracted to such a place. Somewhat in line with these developments is the fact that old-fashioned convenience stores are not doing well either, whereas modern express supermarkets appear to flourish. Many new ones have opened recently in Portsmouth, even within relatively short distances from each other and from the same chain. More are planned. The Uk’s convenience sector is growing faster than the overall grocery market.
  7. 7. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page6 Photo: Recently started express supermarket, a few feet from a new Greggs and an older Subway Southsea, Portsmouth, June 2012 Customers clearly want more, these days. They are tired of the old dreary dusty places; they want an up-to-date environment, perhaps with a touch of London, Rome, or the States. They want to socialize in new ways. Notably younger people in the UK state that they are bored, and that it is the main reason why many of them drink. Portsmouth’s population is young. That brings me back to the empty buildings. Empty commercial buildings often have a lot of character, which gives them a unique marketability that new buildings almost always lack. That character can be useful. Some of those empty pubs and hotels as well as certain office buildings can be converted into micro- malls that provide some of the entertainment value the public is looking for these days. It does require a thorough overhaul, and the absence of any traces of shabbiness or lack of care. Caring, says marketing guru Seth Godin, is a competitive advantage, and one that takes effort, not money. Besides the requirements of character and location, such empty commercial buildings must have a ground floor with good access – from at least two sides – and one or two higher floors that can be redeveloped for commercial use. They may also have a top floor that could be used as living quarters for the manager; banks tend to like that which can help in the acquisition of financing. Footfall must be reasonable to good (200 to 300, with higher peaks) and there has to be a lot of (nearby) vehicle traffic. They must have a good-sized outside space that will get sufficient sunshine and can be used as a European-style terrace in good weather, the parasols contributing to visibility.
  8. 8. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page7 Terraces are inviting, as you can see in the photo above in which people are standing talking on a terrace. In colder weather, a terrace can have heating sources that add character. Amsterdam’s Vondelpark has a popular restaurant – ‘t Blauwe Theehuis – with a large terrace and balcony which have such heating, and keep it popular all-year round. (Seating for 700!) Suitable buildings are located in an area with a minimum of 50,000 households. Not all derelict former pubs or hotels are suitable for redevelopment into a micro- mall. Good buildings for redevelopment may have fire damage as they often have been empty for years and are not listed, but they do have character and stand out. Their high visibility is often enhanced by the fact that they have been landmarks in the social landscape for decades if not centuries. There may be a council requirement to maintain the outside appearance, which limits certain other commercial uses, but could contribute to the ambiance of such micro-malls. They cannot be listed buildings; being listed would make them too hard to work with and too expensive to develop. To be successful, such a micro-mall also has to contribute to the local community, and actively develop ties with its surroundings. Redeveloping an abandoned building into a micro-mall will not only boost the value of the upgraded property and create jobs, it will also increase the value of any surrounding buildings. In addition, it may slightly lower the burden on local fire brigades and law enforcement.
  9. 9. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page8 Photo: Characteristic building that has been unused for years Portsmouth, June 2012 A micro-mall is also called a multivendor retail space. The type of micro-mall I am proposing has a fast-food restaurant on the ground floor, called Angelina’s Cantina. It offers the following kinds of food: • Luxury ice cream (Italian gelato, both milk-based and water/fruit-based); • Falafel; • Tex-Mex; • Fish & chips. In the winter, it also serves hot soups and hot chocolates – underserved markets! – to help counter a dip in the ice cream trade, which will probably be relatively mild in Portsmouth. We will also offer take-away and delivery. Additional items can be hotdogs and I am also very eager to experiment with okonomiyaki (a traditional easy-to-prepare Japanese street food, sometimes called “Japanese pizza”).
  10. 10. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page9 I have looked at various locations in different areas of Portsmouth. I selected The Contented Pig as it is centrally located, is easy to find, and has a variety of neighbourhoods around it, with a dense population. The building seems ideal for this purpose, and does not appear to lack a thing. Photo: The Contented Pig, at a rare moment with no cars and no pedestrians passing Portsmouth, 27 May 2012
  11. 11. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page10 2.1 General market background As already mentioned, new food-related businesses such as coffee shops and tearooms, and branches of chains like Greggs and Subway – as well as express supermarkets - are popping up all over Portsmouth. It fits within the UK’s upward market trend for fast food. However, these and many other new businesses tend to offer merely more of the same. Hand-made cakes, pastries, sausage rolls, orange juice, tea, and coffee. Places “all doing a similar menu” (quotation is from an online review for an establishment in Marmion Road in Southsea). Nothing is refreshingly new, and the entertainment factor is often low. These businesses are not innovative. Innovating means taking a chance and starting a new type of business, doing something different than what everyone else is doing. Photo: Recently opened tea and coffee shop in former pub Southsea, Portsmouth, 19 June 2012 In The Portas Review (December 2011), Mary Portas wrote the following: An increasing number of shops are falling by the wayside as they fail to meet the expectations of today’s increasingly sophisticated, time-poor yet experience-rich, consumer. The high street has a lot to learn from the new malls – 21st century urban entertainment centres. These malls understand how to curate a space and ensure that there is a balance of retailers so that the consumer has a
  12. 12. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page11 vibrant and diverse shopping experience. Their marketing is sophisticated, focusing more on experiential and uplifting messages rather than the practical and the functional. The British Property Federation submitted this response to the above Portas Review: Shopping centres and other out-of-town formats often have the advantage of single ownership. The landlord is able to create an identity for the centre, choose the retail mix, manage the centre so that it reinforces the brand, co-ordinate marketing and refresh the centre through regular reinvestment. Single ownership is rare on our high streets, but that shouldn’t stop some of these elements being replicated. Our high streets need to plan their identity and shape their retail offer accordingly. They need leadership, business plans and day-to-day delivery. These two statements emphasize the viability of the business model I present in this report. An innovative business provides unique value that customers can’t get elsewhere. It’s not about marketing or slogans. It’s about taking a chance on a different type of business than everyone else in town is already operating. Many retail shops are adding the sales of coffee and other beverages to increase dwell time, but they have to worry about visibility. The model I present here takes the reverse approach. Our fast-food restaurant with its minimart will create footfall and dwell time for the retailers on the other floor. John Ryan wrote in RetailWeek (5 September, 2011): Perhaps the best example of a retailer being at one with an implanted in- store cafe or fast food restaurant is actually in Cologne where C&A has a branch of McDonald’s in the basement, adjacent to its young fashion department, Clockhouse. This is normally packed and unlike regular coffee shops, it acts as a downtown Cologne destination in its own right, meaning incremental footfall for the retailer. The wonder is that Primark hasn’t done something of the kind as well, although it is fair to say that footfall is not necessarily an issue in a large number of its stores. Consideration also needs to be given to where to locate a coffee shop if the green light is given to put one in a store. The dilemma that faces any retailer is that a coffee shop has to be accessible, but it should not interrupt trade and for those wishing to take a break they want and need to be able to see the shop, but also to relax from the rigours of shopping it. Solutions to this vary and one of the more common is the glass-sided box that is part of the shop and yet separate from it.
  13. 13. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page12 3.0 The concept My brand is: Indulgence, abundance, generosity, fun, ethical, adventure, social, local, down to earth and practical. “Cantina” matches the combinations of food brands that I have selected, and conveys a sense of abundance and generosity, and a relaxed atmosphere. It also has a tinge of the local – as a cantina is something local – and, at the same time, of the adventure because it is a foreign word and we are offering new foods. The micro-mall itself will serve as minor attraction. Curiosity will drive a certain percentage of the customers into the venue, as they know in advance that they will not have to spend a large amount of time inside if they find they don’t want to, once inside. In contrast with large shopping centres, which take up much more time for even a cursory exploration, customers can quickly pop in and out of a micro-mall, not having to wind their way through long corridors lined with shops. That also lowers the threshold for impulse visits considerably. The ambiance must be a welcoming one, but also one in which customers can feel free to browse, without feeling crowded by staff. Ground floor The ground floor contains Angelina’s Cantina which is a multibrand-type restaurant, positioned between a traditional fast-food restaurant and a sit-down restaurant. It will not offer any alcohol. In addition to luxury ice cream, it offers three types of fast-food – falafel, Tex-Mex and fish & chips – capturing that part of the public in which different fast-food tastes may prevent family members or friends from entering a fast-food restaurant as a group. Customers can enjoy the ice cream as a treat on its own, but also grab it as dessert after one of the other foods. Fast-food franchise operator Yum! Brands (KFC, Pizza Hut, Taco Bell, Long John Silver's) believes: Multibranding can bring great excitement to the future of the quick service industry. Offering more than one type of food allows you to "eliminate the veto vote" and give your customers a WOW experience. Research shows that consumers prefer multibrand restaurants six to one over single-brand restaurants. Online (for instance at http://www.yelp.co.uk/topic/london-taco-bell-opens-in-uk) consumers in the UK occasionally express the wish for multi-brand fast-food restaurants, such as a KFC/Taco Bell combination or a Pizza Hut/Taco Bell combination. In the winter, the ice cream parlour has luxury hot chocolates, and we will also sell hot soups. Hot chocolate is an underserved market, and so is hot soup. Name The word “cantina” was chosen to convey a sense of welcome and relaxation, but also of adventure and culture. It contains a loose link to the Tex-Mex element, but is not too specific. I prefer the word “cantina” over for example “kitchen”, as the latter does not provide that feeling of adventure and culture. It also goes less well with my first name.
  14. 14. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page13 I looked into the meaning of the word and found that, depending on which country a cantina is located in, it can be an establishment that predominantly serves alcoholic drinks. Angelina’s Cantina will not serve any alcohol. It can also be a men-only venue. In Mexico, a cantina can also be a place where people gather to play dominoes, cards or other table games (but it does not have to be). In Spain, “cantina” can refer to any establishment that serves food and drinks and is located at or near a workplace. There is also of course a link to the word “canteen”, indicating a food service location within an institution in which there is little or no waiting staff table service. The latter connotation would lower the threshold. London has a Canteen “restaurant brand” at five locations; it serves British food. Customer base and demographics The take-away will notably attract customers from the immediate surroundings of the micro-mall. The take-away will also benefit from footfall (people who pass on their way home or somewhere else and grab a snack on the way) and passing traffic. The delivery service will attract people from within the entire radius in which we decide to deliver. Delivery attracts larger orders. The sit-down restaurant and take-away will also attract customers from a much wider area, who will come to the restaurant specifically for the types of food it provides as well as its entertainment value, also from places like Southampton and Chichester. The fast-food sections of Angelina’s Cantinas are aimed two types of customers: • A trendy crowd consisting of for example students, faculty, and professionals aged 15 to 90, but notably people between 15 and 35, and their children; • A more traditional public in which parents or grandparents may opt for the fish & chips while the youngsters would rather have a taco or a burrito or go for healthy vegetarian. The ice cream parlour will also draw two types of customers: • People who come in specifically for the ice cream; • Customers who have sat down to enjoy their fast food, find their eyes wandering off to the scrumptious ice creams and decide to go for dessert. The demographics of Portsmouth match well with the above. The population density of Portsmouth is high; this is related to the housing mix which is different from that in the rest of the UK. It is caused by the physical constraints of the city, which is located on an island. One consequence of that is that it limits the local branch’s growth. Growth may have to come predominantly from expansion to other towns. Ideally, I wanted to be able to service the Gosport area and Hayling Island (delivery) and I have pondered solutions. Hayling Island is too hard to reach and its population does not fit my target groups. Gosport can be reached via the ferry; this would lead to longer delivery times, but customers ordering from Gosport will be aware of that, and be made aware of it by us as well, to avoid disappointment. (It may be better to open a second branch later, perhaps in Fareham. )
  15. 15. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page14 The 2011 census counted a total population of 205,100 and 85,500 households in Portsmouth. This would likely not be enough to support two of these multi-brand fast-food restaurants in Portsmouth. Portsmouth’s total population in June 2010 was 207,100 (according to the local authority). That this figure was slightly higher than the census data may be related to student and tourist numbers, or be caused by a typo. Portsmouth has a larger proportion of young people than the rest of the UK. It is also the city with the highest number of immigrants in the UK, particularly the most skilled (BBC South Today, 11 April 2008). In June 2010, the situation was as follows (census data). Age % of population in Portsmouth % in South East England % in South East England 0 - 15 16.6 18.9 18.7 16 - 24 18.7 11.4 12.0 25 - 49 36.6 33.9 34.8 50 - 64 12.3 15.4 15.0 >65 (m) >60 (f) 15.8 20.4 19.5 To be more precise, Portsmouth has a higher number of people aged 20-29 relative to other age groups in the Portsmouth population, and in comparison with England and Wales, overall. Portsmouth has a lower number of people aged 0-15, but also fewer people aged between 35-84 in comparison with the rest of England and Wales. Some background for possible future expansion Hayling Island is part of Havant. The population of Hayling Island is approximately 16,000 people, with a relatively high age (Havant’s highest proportion of residents aged over 70) and continuing to age. Gosport has a population of around 75,000, and about 35,000 households. The population of Fareham is around 112,100, in about 46,600 households. Layout ground floor Angelina’s Cantina is not a traditional sit-down restaurant, but resembles the kind of facilities found in museums, supermarkets and at airports, in the sense that the level of convenience is high and the service fast and efficient. Picture a rectangular area with the food counters to the right. At the back, a doorway leads to office space and at the front is a vending window from which ice cream and food can be sold to people passing the building. There is also a vending window that opens onto the terrace. This would allow me to serve passing customers, and customers on the terrace with limited staff and without the need for cleaning inside the restaurant. It adds flexibility. Inside, payment will take place at the quick-service counters when the customers place their food orders. Customers in the UK often complain about the slow speed of payment in restaurants. Quick-service counters should not have such a problem. “Every 15 seconds you can cut in bringing food to the customer adds 1% growth to the company,” according to Mike Donahue, former Vice President and head of communications at McDonalds, and current fast-food restaurant owner. On the left is a MiniMart, with a separate till (checkout). Customers who come in and grab a drink only can pay for it at the MiniMart as I want to avoid long lines. I
  16. 16. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page15 have walked out of fast-food restaurants too many times at the sight of the lines in front of the counter if all I wanted was one item or I was quite “desperate”. There will not be a separate take-away counter. It tends to feel discriminatory (“cheap”) and not having a separate counter makes it much easier to keep all the prices the same. Image of an inspiration for the idea of the community table The eating area has individual tables and chairs. There is also a long “community table” at which customers can sit down with strangers and enjoy and pass each other condiments. It is aimed at encouraging communication, and to increase turnover (fewer empty chairs when it’s busy). I have contemplated making the food at this table cheaper, but that is not practically doable. This table may have better chairs. It will have flowers to make it more inviting. It will also have newspapers into which we slip discount coupons every morning, and there will be a wide variety of magazines (adding a light educational touch). This is to compensate for the fact that people sit down at a table with strangers. Who doesn’t want to talk can grab a magazine. The food counters are the four following: • a falafel bar where falafel (by definition vegetarian) is sold in pitta breads – two or three choices (white, whole-meal and luxury) and where the customers add their own sauces (at least three available), vegetables and pickles and can top up their pittas as often as they like; • A TexMex counter that serves Texan-Mexican food like tacos and burritos, and salads; • A fish & chips counter, which will likely also sell the hot soups in the winter, and possibly hot dogs; • An Italian luxury ice cream counter which will sell hot chocolates in the winter (I may still have to add items for the latter to the startup budget); • Display cabinets with luxury cold espresso macchiatos and the like, orange juice, cola, and water, which customers can select and take to the checkout counters. Having them out in the open encourages turnover and speeds up the counter interactions over customers having to inquire which drinks we have.
  17. 17. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page16 • Coffee and tea will likely also be self-serve. We may introduce the good old American habit of being allowed free refills. It won’t cost us too much, but again will add a sense of abundance, and hospitality. The eating areas are flanked by a minimart shopping area behind a stainless-steel railing and turnstile, to prevent customers from wandering into the area with their food. It is located to the left. It will attract customers who suddenly remember that they still need a gift for a friend’s birthday, find themselves without umbrella when they notice it’s started to rain outside or remember they have been wanting to shop for a new umbrella but somehow never get around to it, or are otherwise tempted by what they see while enjoying their food. It will display items like art posters, exclusive reproductions, jars of olives, bags of tortilla chips (also available at the food checkout), jars with dips for the tortilla chips, possibly a taco kit (which would also be for sale at the food checkout), gift vouchers (also at the food checkouts), Belgian chocolate (Jacques), Vosges chocolates, and handy design items, besides the umbrellas. The umbrellas will be modern, wind-proof designs such as the one developed at or in conjunction with Delft University of Technology and the one offered by the Guardian http://essentials.guardianoffers.co.uk/buy.cfm/accessories/windproof-umbrellas- /41/yes/61963 Important is that this minimart also has to function as a traffic generator for the retailers on the first floor, and contain items selected from their merchandise, such as jewellery, or men’s ties. An open staircase and a lift provide access to the higher floor. The higher floor has to be highly visible for anyone who comes inside for food, whether to take away or eat in. This is a matter for the interior designer/architect. Higher floor On the higher floor, we will offer retail space to other merchants, which we select. The shops will sell items such as men’s ties, umbrellas, jewellery, (specialty beers if allowed), perfumes, art posters and similar products, and there may be small clothing boutiques. I still need to study on the specific mix, but I want it to have a browse and entertainment factor. The idea here too is to tempt those customers who remember they still need a gift for someone or want a bit of distraction. It will be a bit more difficult to attract customers from outside who do not purchase any fast food, as there will not be any accidental footfall on those upper floors. There will, however, be some cross-fertilization (word of mouth) from the fast-food customers who will help spread the word, in addition to other kinds of marketing. There will also have to be signage outside (on the building). Another option can be to house an art gallery on the higher floor, but the art may have to contain an entertainment factor. It may have to be video art or similar. Ideally, the art will have a hands-on factor, offering the visitors an experience that goes beyond merely watching artworks on a wall. It could have a high tech angle. I also want to have one or two meeting rooms upstairs which can be hired by the hour, or for three hours. Over the years, I have participated in many meetings at locations like these, and have a pretty good idea of what is needed. There is a market provided our prices are reasonable and we offer good facilities including coffee, tea and water and have a package that includes food as well. It
  18. 18. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page17 will get people onto that higher floor and create footfall, dwell time and added word-of-mouth publicity. I have not yet included equipment required for such meeting rooms in the budget, specifically. In practice, it could become part of “other capital expenditure”. Delivery The delivery department will have its own staff. At all times, one person stays who is aware of all the orders that have come in within the past 30 minutes or so. I have seen how confusing and crazy it can get when you have that dealt with by the same people at the same time, and I don’t want this to interfere with counter service. Delivery will be housed in an office at the back, out of sight; staff will collect orders from the kitchens. Delivery hours are 5pm to 9pm. I will have four part-time employees on delivery. They can also cover breaks and assist whenever the counters and tills are busy and delivery is quiet. Piaggio vans would be a great marketing tool, and are likely safer than mopeds. However, they can get stuck in traffic when mopeds can squeeze past. We will have one Paiggio van, and two mopeds. Most takeaways cover 5-10 miles for free. We will offer free delivery for orders over £15, and charge £1 for delivery of smaller orders, and limit delivery to postcodes including Cosham, Drayton, Farlington and Wymering. Southsea, Landport, Eastney, Fratton, Milton, Buckland, Hilsea, North End, Baffins etc. That covers postcodes PO1, PO2, PO3, PO4, PO5 and PO6. Delivery to Gosport (PO12 only) may have to be for orders of £30 and more only. Opening hours I am currently working with opening times of noon to 9pm, Monday through Saturday. I want to be open on Sundays too, certainly in the summer. I will likely have to include “on the job trainees” (Job Centre) to cover this financially, in the first year. Initially, I will only sell from the vending windows on Sunday, also to assess demand. Taco Mundo’s opening hours are only 4 pm to 10 pm, but we would miss out on the lunch crowd, and such opening hours would not be good for ice cream sales either. The retailers on the first floor would have to fit their opening hours within our opening times. I may need to adapt this, and can also envisage opening one vending window between 7:30 and 8:30 in the morning. Twice per year, I want to ask our customers what they think of our opening hours (and pricing etc). Mission Our mission is to offer a healthy variety of fast food that is currently not on the market in Fratton and Southsea – with the exception of fish & chips, which will be offered at approximately the same price as when sold at other fish & chips chops. The variety and the type of food we offer in combination with an elegant yet relaxed atmosphere and attractive shopping on the site will quickly establish our reputation as the most pleasant and innovative fast- food restaurant in Portsmouth. It will also attract customers from neighbouring towns.
  19. 19. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page18 Community ties and entertainment Angelina’s Cantina wants to develop ties to the local community in the following ways. Here are some ideas. • FOOD FOR PEOPLE: Customers can make a donation when they order their food, whether take-away, eat-in or delivery. The web site as well as the venue will have a donatometer, which indicates the total donated amount at that point. As soon as this amount reaches a certain value… there will be a day on which everyone who comes in can have a free burrito, taco or falafel (up to a point; details to be worked out), food will be brought to a care home, homeless people can come in for a free meal, or something similar. People can also walk in merely to make a donation; they do not have to purchase any food. • Other activities, such as a cookie-baking or brownie competition, can be considered. • The shutters will not be boring steel-grey, but we will invite local (street) artists to come up with designs for them. The winning design can then be carried out by the winning artist. This can be arranged via Facebook, AboutMyArea, and Twitter and other channels. • There will be one large coin-operated photocopier for the public. • At certain fixed times during the week, Angelina’s Cantina will offer face- painting for kids and balloon-sculpting. If there is insufficient space indoors and the weather is good, this may have to be restricted to the outside terrace and the summer period. • There can be an ambulant photographer for families or children, but customers would pay for the photography service. He or she does not pay us and we won’t pay him or her, but we will select him or her. This could be in conjunction with a photography service on the first floor. • After 6 to 12 months of operation, we will consider whether it is possible to offer live local music during times of low, either indoors or outdoors. Live music during times of low sales would draw more customers. During times of higher sales, however, customers would stay longer to enjoy the music, which would likely depress the sales volume, but it would also interfere too much. (Theoretically, customers may decide to have another taco while they stay for the music, but this is not very likely.) Live music might also be a very good way to attract customers during the startup. • There will be taster sessions/test panel sessions, starting one month before the initial openings. We will invite people, and get their votes on products, pricing and food variations (recipes). The enterprise should be established with the firm intention that positive interactions between a commercial enterprise and the residents benefit both the community and the enterprise. Moreover, it will add a clear local character to the restaurant, distinguishing it very clearly from a Greggs or a MacDonalds.
  20. 20. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page19 4.0 Market analyses 4.1 Market analysis fast food in general Jim Riley, co-founder of tutor2u, was a director at Thomson Travel Group Plc and a Corporate Finance and Strategy specialist at PwC. He is graduate Economist, a Fellow of the ICAEW and has an MBA (Distinction) from Bradford Management School. In 2010, he wrote a blog post about how the recession is turning the UK into a fast-food nation. He based this on the 2009 annual survey by the Local Data Company, which has its researchers walking around in the UK’s largest towns and cities and note which retailers are trading. The fast-food sector increased its presence by more than 8% in 2008; the number of fast-food restaurants in the UK’s top 10 cities increased by 8.2% to more than 1,450. The survey found that the most successful fast-food brands in 2009 were Domino’s, Eat and Prêt-A-Manger. Domino’s increased its presence by a whopping 50%, while “healthy” fast-food group Eat boosted its portfolio by 36.4% and sandwich chain Prêt A Manger by 29.7%. Burger King was the least successful, and had to close 11.8% of its outlets in the top 10 cities. This matches what is currently being said about sector trends. Consumers have less money to spend, but do want to treat themselves, and are becoming more health-conscious. The FT quoted Stephen Broome, leisure analyst at PwC, as saying: People still want their burgers and chips . . . but more and more people are understanding the need for a balanced diet and that is stimulating the demand for healthier fast food. According to Keynote, said Riley, the fast-food and takeaway market was worth around £9.3bn in 2007, having risen by 16% over the previous four years. All the evidence from results reported by the likes of Prêt-A-Manger, Domino’s and Subway during 2008 and 2009 suggests that the market has increased its growth rate during the recession. The growing popularity of fast-food has been driven by simple economics, as people trim their budgets and stay at home more in the face of rising unemployment in the UK. “Recession sees growth in fast-food outlets,“ agreed the FT. At a time when restaurant chains, hit by higher operating costs and lower spending among diners, are scaling back growth plans, fast food companies, emboldened by new custom and lower rent, have expanded their presence on high streets. The Local Data Company currently reports an increase of more than 25% in the fast-food sector and a growth of 25% for take-away.
  21. 21. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page20
  22. 22. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page21 4.2 Market analysis ice cream Fortunately, Portsmouth has the UK’s highest population of foreigners (and most of them are highly educated) as well as a mild climate with lots of sun, both of which make the ice cream outlook in Portsmouth relatively positive. To many people from other countries, the UK appears to have almost no ice cream tradition at all, and anyone who loves ice cream often really misses it in the UK. In the US, it is a popular product that everyone loves, but I feel that it is still a hugely underdeveloped market in the UK. The supermarket offer is poor relative to that in the US, although some change is underway. Even the best ice cream available is often a bit cheap and dull compared with those of the US. There is not enough innovation, Instead, I see variations on what it is already out there. Also, whereas Dutch supermarkets often prominently place their wrapped ice cream treats near the checkouts, certainly in summer, the offer in British supermarkets is often extremely limited. I believe this is because ice cream has an image problem in the UK, where ice cream is not seen as a dairy snack or a luxurious treat like chocolates, but as something one gives to children. Photo: Jamie’s selling ice cream from a cart but only attracting children
  23. 23. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page22 Ice cream consumption is not encouraged in the UK. You can do a lot of walking here, in search of nothing more than some ice cream in a cone. Even at Marks & Spencer, a chain with a tradition of catering to the discerning palate, the ice cream offer in the summer is downright sad. Photo: Ice cream offer at Marks & Spencer in Portsmouth on 25 June 2012 More seriously, ice cream is sometimes mistreated, which acts as a major deterrent on ice cream sales. Some supermarkets allow their ice cream to be exposed to higher temperatures, and refreeze, which leads to the formation of ice crystals (frozen water) in the ice cream, which damages the taste experience. There is almost nothing more disappointing than bad ice cream. I have even had the displeasure of having purchased a Magnum almond in Portsmouth – costing £1.50 - that not only clearly had been allowed to thaw and re-freeze, the juices of a thawed syrupy water ice had seeped into it and later refrozen around the Magnum. Ice cream must be kept at the right temperature and certainly never be allowed to thaw; this is crucial. A study carried out at the Dairy Science Department of South Dakota State University in 2011, however, indicates that light and full-fat ice cream can be safely stored at -26.1 °C instead of at the customary -28.9 °C; this results in energy savings. Do it right, however, and you can turn over £350,000 per year. Lucy Tobin wrote the following in the Evening Standard in July 2010.
  24. 24. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page23 “The ex-Lehman banker who is making ice cream” In the second of our series on London entrepreneurs, an Italian tycoon says his crazy' idea is making serious lolly... When Carlo Del Mistro decided to quit his lucrative job in corporate strategy at Lehman Brothers in Canary Wharf to open an ice cream parlour in rainy London, his family thought he was crazy. "No one could understand why I wanted to leave the salary and security of my job at a blue-chip giant to sell ice cream in a cold country," he says from the Notting Hill branch of his burgeoning London chain Gelato Mio, where a queue of hungry shoppers is snaking out the door onto Portobello Road. "But I couldn't find any decent ice cream in London. It was all pre-made with flavourings, not fresh. I knew how popular ice cream shops were in Italy and thought they'd work here. "I took a two-year sabbatical from Lehman rather than quitting — it was my back-up. I was supposed to go back last year, but by then, Lehman had gone bust, whilst my risky ice cream business was doing very well." In two years, Del Mistro, 29, has built up Gelato Mio from a single store in Holland Park to a chain of four London branches. The others are in St
  25. 25. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page24 John's Wood, Fulham and Notting Hill. Its ice creams are also served in top restaurants including Villandry. Last year, with two stores, turnover hit £700,000. It's expected to rise to £1.5 million this year with four. In fact, since Del Mistro dreamed up the business idea during a London Business School MBA which was funded by Lehman in 2007, Gelato Mio could have been one of the collapsed bank's last successful investments. But not everyone saw the potential from the start. Ice cream is a dramatically cyclical business. And while Del Mistro had no fear of a cash- flow chart that looks like an inverted ice cream cone — soaring in summer, ignored in winter — lenders were anxious. "It was 2008, the banks were running away from all business ideas, especially one involving a foreigner with no property in the UK opening an ice cream company," he says. "Instead I started off with £25,000 from my savings and money from friends and family." Next, the ice cream entrepreneur zipped around town researching a site on his silver Vespa, before inputting his research into a spreadsheet. "It was the banker in me," he laughs. "I wanted the shop to be near a school, park, and Tube station, and have wide pavements. I put all the data into a model, and Holland Park came out as best, so I found my first shop there. "It wasn't easy. I was looking during the apex of the bubble for demand for property. Landlords were extremely picky about their tenants. I was turned down a few times. But now I've noticed some of those shops I tried to rent are lying empty." In the early days, Del Mistro — who swears he eats three scoops a day, but has no belly to show for it — flew over a master Italian ice-cream maker for training in the best recipes. Now his team are experimenting with their own, including a World Cup competition pitting national flavours against each other. Pimm's of England and Nigeria's guava are doing well — despite both teams being knocked out of the real thing. The ice creams are made using just-in-time production. "Two days ago the strawberries from our strawberry sorbet were in the field, today they're frozen in a cone. We need the best quality to make sure customers come back," Del Mistro explains. Now his business is established, it's easier to get the suits on side. "For the first time, I managed to get a bank loan this year. Lenders were wary because the restaurant industry was badly hit in the recession. They were terrified by the cyclical cashflow, but I showed them what I've done so far and eventually Royal Bank of Scotland agreed a £100,000 loan. Landlords are much happier to deal with me now they can see the existing branches doing well." Next year, he plans to open another four branches in London and one outside of the capital. Being an entrepreneur in Britain is, Del Mistro says, easier than in Italy — "there everything is bound up with red tape" — but he finds business rates in the capital expensive, and laments the time it takes for planning applications to come through. "The council takes three months to decide whether you can have tables and chairs on the pavement, and the delays can hit business."
  26. 26. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page25 But that's not enough to send this ice cream entrepreneur back to banking. "The salary is definitely not as good, but I could never return," he says. "In finance everything you do is intangible, there's nothing to show for it. Here, I see smiling customers enjoying the ice cream. It's a great way to make a living." To encourage people to buy our ice cream and let them experience how good it is, we will give out free samples. One employee could walk around the restaurant offering free scoops in the first month and whenever our trade volume is a bit low. The UK ice cream market has expanded greatly over the past decades and reached a value of £1 billion in 2011 (Mintel, September 2012). In the past five years, the market for cream, sorbet and frozen yogurt grew by more than 19%, reports Mintel. Sales of sorbets dropped, but frozen yogurt sales increased dramatically. Volume sales, however, have been declining. Ice cream, however, is certainly still seen as an affordable treat, and the sales are expected to increase and reach £1.13 billion in 2016. Globally, the UK takes tenth position with a consumption of 6 litres per person. In terms of value, the UK also is in tenth position, with a £17 spend per person. As many as 85% of all Brits buy ice cream. As many as 49% of the British love buying a tub of old-fashioned ice cream and 35% prefer a cone. 25% buy from ice cream vans. Between March 2011 and March 2012, consumption of ice cream was 9% lower among one-person households. 27% of these one-person households reported that ‘It’s hard to fit ice cream in my freezer’, compared to 21% on average. This indicates that there clearly is room for the impulse market for ice cream. One-person households also seem to be more likely to limit their ice cream consumption because of health reasons. This indicates that opportunities must particularly be found in healthier varieties and in providing good nutritional information. It also hints toward one-scoop and two-scoop treats being seen as permissible, as opposed to taking home large tubs from the supermarket. Ice cream brands have been playing into this by providing small tubs. Ice cream products can largely be divided into two main sectors: 'impulse' and 'take home'. We are targeting both markets, but will have an obvious emphasis on the impulse segment. Impulse products include cones, bars, small tubs and stick products. We will offer cones and small tubs. Take-home products include large tubs and multi-packs. We will offer large tubs. According to Santander, both ice cream sectors have benefited in recent years from more households owning freezers and the increased popularity of adult and premium products. Ice cream was once thought of more as a children's product, but notably the types that we want to offer appeal to adults as a sophisticated dessert or snack. Ice cream is also rapidly becoming a popular treat for all year round and no longer limited to the summer. As mentioned before, while the ice cream, sorbet and frozen yogurt market has been growing and continues to grow, Mintel’s estimate is that volume sales declined by 6% over the period 2006-2010 (even though others report that ice cream is becoming more popular in the UK). Price inflation was a major factor in
  27. 27. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page26 this value growth and volume decrease. Rises in the cost of ingredients and packaging, and in fuel and energy costs have put upward pressure on prices, their effect partly offset by heavy promotional activity, says Mintel. Santander agrees that the economic downturn hit the catering and hospitality sectors hard, while rising ingredient prices didn’t help. However, particularly in the difficult times, people like to cheer themselves up with a treat. There are signs that people are getting fed up with the recession and are looking for the bright side of life again. Recession or not, overall consumer behaviour is likely starting to change somewhat now. It is paramount to get the menu and the prices right, and even more importantly, our ice creams must be delicious and of very high quality. Given that we will offer an excellent choice of high-end ice creams, with innovative and traditional flavours, at the right price, people will certainly be coming into our ice cream parlour. This market is not well served yet in Portsmouth, and is underdeveloped. Pricing scoops will be very important. It is very hard to raise prices once started; it is likely easier to drop the price somewhat. Supermarkets around town do not offer much at all in terms of impulse buys, but I have noticed with interest that Tesco now occasionally moves a small ice cream freezer to its check-out area. Fast-food chains like McDonalds offer ice cream variations on their menu, but the lines can be too long to make it worth the wait if all you want is ice cream. There is a soft-serve ice cream cart in Commercial Road, but its cones are the kind I avoid if I can (and throw away as soon as I can, eat as little of as possible, as they taste like soggy carton and ruin the taste of the ice cream, lessen its enjoyment, in my opinion). It does not have any other cones or small tubs. It would be ideal if we could make our own ice cream as that would give us optimal flexibility, also to experiment with new flavours. However, making good ice cream is an art that one cannot learn overnight, and requires devotion and passion. It also requires a substantially higher investment. Purchasing the right ingredients could take up a lot of time as well. It is certainly something to be kept in mind, but it is not what we envisage for the start. We would like to offer Italian gelato, which tastes richer but is milk-based and less fat than cream-based ice cream. It results in the tastiest, fullest flavoured ice cream. Ice cream trends can suddenly change, and for that reason, we must monitor the trends. A second option would be fruit-based, dairy-free sorbetti (also known as gelato). This would appeal to a health-conscious public. A third option would be soft-serve, simply because soft serve ice is very popular. Soft serve contains a lot of air, which allows it to be pumped through a machine (which is relatively expensive, however). Frozen yogurt, containing live-culture bacteria, should also be considered. It’s a growing market segment in the UK and also attracts the more health-conscious customers. Suitable venues for an ice cream parlour have outdoor and indoor seating, are located in an up-scale commercial business district including a residential and office mix, have weekend and evening traffic, can be in a prominent location in a food court corner or high-traffic corridor, have strong foot traffic, and high visibility. Population is a key factor. Ideally, the area is somewhat congested. The Contented Pig has many of these attributes. It is, however, not in an up-scale environment and currently, no office buildings are within sight. It does have the
  28. 28. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page27 church on the other side of the street, and the surrounding residential areas offer a nice and dense mix of households. The city centre is within walking distance and we aim to make the restaurant and the mini-mall a popular lunch break destination for office and shop staff who have seen the Cascades and Commercial Road more times than they care to remember. It is very good that there is sufficient footfall. Also, passers-by have a bit of a tendency to hang around to make phone calls and things like that around The Contented Pig. That too indicates that it is a good location for ice cream. The location feels comfortable to pedestrians. We will closely monitor the relationship between the weather and our ice cream trade volume. If we see a strong correlation and a downward trend, we will start offering luxury hot chocolates and a range of hot soups during the winter. “Hot chocolate is a massively under-served market”, said Nick Holzherr on The UK’s Apprentice. He has his own coffee and hot chocolate business (in addition to a technology business). Brands like Options cover the home market with a delicious and innovative range of flavours, but there is a lot more possible. Particularly on market days and during events, ice cream, hot chocolates and hot soups could also be sold from a van to increase our visibility. Hot soup appears to be a largely overlooked market in the UK. In September 2012, Progressive Grocer wrote that “soup is a reliably hot commodity at retail these days”, not just at supermarkets, but also at delis. “Soup is growing for the first time in years, due to marketing efforts by the leading manufacturers, new item introductions and pricing strategies.", reported Massachusetts-based company Big Y. “Soup is now competing with simple meals; it has become a simple, convenient alternative that extends to different meal occasions," says
  29. 29. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page28 Jason Homola, director of business development for soup and simple meals at The Campbell Soup Co. in Camden, N.J. Soup fans want to enjoy delicious soup, without having to make it themselves. A new trend in soup consumption appears to be underway, although it is not clear yet where it is headed. We can create our own market niche, by offering it not as part of a meal, but as a delicacy in its own right. "We expect to see increased segmentation and product specialization, rather than the traditional canned- commodities approach," says Bookbinder's O'Neil, according to Progressive Grocer. The margins for an ice cream parlour are considerably smaller than those of the fast-food sector. Housing a parlour inside a restaurant can help keep its operational costs down and result in a slightly higher net margin.
  30. 30. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page29 4.3 Market analysis Tex-Mex As far back as 2005, I already heard Britons state online that they would love to see Taco Bell, one of the States’ major Tex-Mex chains open up franchises in the UK. Later, a Facebook group was started to this end: Bring Taco Bell to the UK. They had some franchises fail in the UK before, apparently, but their web site now states that they have one restaurant in Manchester, one in the Lakeside Shopping Centre (L3 Food Court) in Essex and one in the Eastgate Shopping Center in Basildon. They are planning on opening more locations soon. In the Netherlands, TacoMundo is becoming very successful. They started with one shop in Amsterdam, not far from where I was living at the time. Now they have ten branches, three of which are only take-out and delivery. From what I can see online, TexMex food may have a mixed reputation in the UK. People who have visited the US or have live there, often love it. However, I saw one person associate it with cheap and low quality and another one with ‘chavs’. This puzzled me and surprised me; it is something I need to look into. I don’t think it is a problem at all, but I would like to understand it where it comes from if this impression is shared by more than two people. Prices at Taco Bell are 99p for burritos, tacos, and Mexican rice. I may have to go a bit higher. Portsmouth has one Tex-Mex restaurant – Las Iguanas in Gunwharf Quays - but it is a full sit-down restaurant in which customers have a full meal. But what it you do not want the whole enchilada, but just want to grab a burrito and walk out? That market segment is not served yet in Portsmouth. I have heard reports (from local police officers, who enjoy the food) of a mobile concession, but its appearance is erratic and sporadic. I have heard it was in front of the local Sainsburys once and I may have seen it on the seafront once (and if I did, its offer was very limited). TK Snax has very recently opened up in Gosport near the ferry stop. They offer “Tasty Mexican and Caribbean food, Rolls and snacks, super Coffee and Tea”. Their menu includes three kinds of burritos for £3.95: beef, pork and chicken, various rolls, and Carribean food. This is a very interesting development. However, their web site just had a server crash and it offers information like
  31. 31. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page30 “packages are generally dispatched within 2 days after receipt of payment” for “delivery”. There is also a Chiquitos restaurant in Gunwharf Quays, as well as in Port Solent. Several online reviews for it are negative. Then there is Chimichanga in Port Solent. These are traditional sit-down restaurants. Illustration: Menu of Dutch Tex-Mex chain TacoMundo
  32. 32. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page31 4.4 Market analysis falafel Falafel has a young and healthy image, fitting Portsmouth demographic profile very well. Falafel is a delicious vegetarian product, often served in pitta bread with lettuce, cucumber, tomato and a variety of (pickled) vegetables and condiments. Customers can get up from their seats and top up their pitta as often as they want. Unlike with other fried foods, there is not even a trace of dripping fats from falafel and it has a reputation as a very healthy vegetarian food. It fits very well within British market trends. Falafel bars are so abundant and successful in the Middle East that even McDonalds tried to grab a slice of the market. Its generic McFalafel – slices of
  33. 33. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page32 falafel served in a wrap with something sitting around it - didn’t do well enough and McDonalds discontinued it. This failure could easily have been foreseen, as nothing beats the falafel served in a real falafel bar, and falafel just doesn’t fit within the McDonalds profile. While the product may not be known as widely in the UK yet as Fish & Chips, supermarkets like Waitrose and Asda do carry falafel. Boots offers wraps with falafel, but doesn’t always have it available. Starbucks sells it too as a Falafel Mezze bistro box. Anyone who loves good falafel and has enjoyed it numerous times knows why these supermarket and coffee shop varieties are not suitable for acquainting the wider public with this delicious food. Only genuine falafel bars can do that. The (gross) margin for falafel bar chain Maoz which started in the Netherlands is about 75%; in general, the (gross) fast food margin is 65-73%. http://thefranchisehound.com/2011/03/01/mixing-health-with-potential-wealth The net (profit) fast food margin tends to be around 60%. The Maoz chain’s establishments are not the kind of location where you dwell after having consumed your falafel. In towns that have no other falafel restaurants, a falafel bar can serve as a destination. In towns like Amsterdam, where you can eat falafel in many locations throughout the city centre, you tend to end up buying it when you pass an outfit while walking down the street. Falafel as a fast food, however, may do less well away from city centres, on its own.
  34. 34. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page33 Photo: Example of a Maoz location Maoz has recently branched out to the US; below is an American Maoz income statement. Maoz’s Potential Income Statement Amount % of Sales Average Store Sales $575,000 Royalties and Advertising $40,250 7.0% Cost of Food and Packaging $149,500 26.0% Labor $106,375 18.5% Rent $69,000 12.0% Other $57,500 10.0% Owner Operated Cash Flow before Interest and Taxes $152,375 26.5% Another successful chain is Just Falafel, which started in the United Arab Emirates in 2007. The chain is now present in more than eight countries, and is expanding rapidly to other countries. At the end of 2011, it announced that it wants to open more than two hundred stores in the UK. I haven’t been able to locate on yet. Fadi Malas, CEO of Just Falafel, said: "Just Falafel took the idea of a humble, regionally popular food, developed a number of international flavour varieties appealing to different palates, and is turning it into a global phenomenon through quality, value and service. Potential franchise partners have recognised the success of the Just Falafel formula, and we're currently seeing strong demand from the UK, India, and Canada – all of these markets are key growth destinations between 2012 to 2015." “Ah falafel. Food of the gods.” someone posted under a falafel film on YouTube. That is how delicious it is.
  35. 35. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page34 Falmouth in Cornwall has had a mobile falafel business since 2007. This is what people are saying about it: “I am very jealous - I wish Fal Falafel could be a permanent feature of Penzance. These are not just falafels, these are perfect falafels - my reason for popping down to Falmouth on Saturday.” - Gabriella Nonino “I love Fal Falafel x” - Jessica Gulliver “The best and healthiest food in town! A cultural service to be enjoyed.” -Tom Jones “The best thing to happen to the centre of Falmouth in years…and it’s unique!” -Jo Tracy “Beautiful food, also very healthy and well presented by Fal Falafel.” - Ger Murphy
  36. 36. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page35 4.5 Market analysis fish & chips On his web site, Jamie Oliver writes: Good fish and chips are becoming harder to find these days, but there are still some good boys out there making the real deal. Sources: Santander’s business guide for fish & chips shops Fish and chips, although still a great British tradition, has suffered a decline over the last couple of decades. The fast-food market changed rapidly during the 1980s and 1990s - burger bars sprang up everywhere and other new types of fast food cafe opened, giving people a huge amount of choice. Fish and chip shops didn't move with the times - people began to think of them as dull and old fashioned. Fish and chips also came to be seen as an unhealthy meal because everything is fried in fat. All this meant that, while other fast food sectors have prospered in recent years, fish and chips were left behind. Recently, many fish and chip shops have woken up to the fact that they need to change. Some of the ways in which fish and chip shops have successfully adapted to changing times include: - Refurbishing the shop, to make it look smart and attractive; - Serving a range of different meals, for example pizzas and even sandwiches; - Always serving top quality meals, cooked with the best available ingredients; - Trying new, healthier, cooking methods; - Offering smaller lunchtime portions and meal deals; - Sourcing fish and potatoes as locally and sustainably as possible. Trade bodies representing the fish-frying industry have made great efforts to promote fish and chips as a national institution that is part of Britain's heritage.
  37. 37. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page36 Photo: Two young women eating fish & chips Southsea, 30 May 2012 Santander warns that we should be aware that the current economic downturn means that people now have less money to spend on take-away and restaurant meals. They emphasize that it is very important a fish & chips shop offers customers the range of meals they want as well as giving them good value for money. One issue which has become more and more important over the last few years is the shortage of cod in the North Sea and reports of falling stocks of other fish. Although cod from other sources is still reasonably plentiful, this has driven up prices and caused many people to think twice about ordering cod. In fact, there's growing pressure on caterers to take cod off the menu altogether. Meanwhile, other food prices have also risen - as have rents, rates, energy prices and cooking oil. It can be difficult to keep menu prices at reasonable levels while still covering costs and making a realistic profit. While this analysis is less positive for someone trying to start a facility that offers only fish & chips, it fits well within our plans as fish & chips would help increase the sales for our other food segments, while they also bear some of the overhead for the fish & chips. At locations that have no fish & chips shops nearby – such as at the Fratton site – the fish & chips section might do really well, also in view of the somewhat traditional nature of the surrounding residential areas. We also want to add a Dutch-Belgian touch by adding mayo to our offer as well and an American accent through hot dogs. Rolls and sauerkraut are additional purchases for the latter; ketchups and sauces already are part of the fish & chips
  38. 38. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page37 food inventory. These too are great items for the window that opens onto the street. Photo: Office worker in shirt sleeves, eating a hamburger in Fratton on 30 May 2012
  39. 39. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page38 5.0 The Fratton location The Contented Pig is located at 249 Fratton Road in Portsmouth, just before Lake Road, close to St Mary’s church. It has three main advantages. It is highly visible, it has a lot of motorized traffic and sufficient footfall, and the building looks ideal for the purpose. There also appears to be a gap in the market, locally. There are no food shops or any other shops within a radius of certainly about five minutes on foot (a radius of approximately 500 meters). The section between Holbrook Road and Fratton Road contains only residences. The same applies for the area to the north of it, west of Kingston Road. Fratton Road and Kingston Road have various food providers, but only slightly further down. In the direction along St Mary’s road, some food providers are present. As it is currently the only building on that side that lines the sidewalk, it is impossible to miss the building, both for motorized traffic and for pedestrians. It’s light-colored facade on the north side enhances that. Footfall is decent, as the location is on the way to the Bridge shopping centre, with Asda, and other shops on either side. It is also on the way to Fratton train station as well as Fratton football stadium. Home matches have a marked effect on footfall. St Mary’s Church, located on the other side of the road, will also bring some extra footfall, notably on the days of its fairs. What is not clear at this point is what will happen to the parking area and
  40. 40. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page39 recently vacated council-owned building next to it, Merefield House. It would be good to talk to the council and explore whether we can arrange car access from the west side, from the entrance to Merefield House. Also, there is an adopted public footpath to the south of Merefield House, which benefits us. Merefield House will be sold subject to this footpath and if a purchaser wishes to divert or formally close the footpath, a stopping up order will need to be obtained. In the photo on the left, The Contented Pig is located right under the area indicated in red. This is the area indicated in green in the figure on the right. Currently, potential customers pass the Contented Pig on three sides. This may change somewhat in the future, depending on what will happen with the public footpath next to Merefield House, but the visibility of The Contented Pig is likely to remain high.
  41. 41. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page40 The following tables list the traffic counts for the Market Way count point (MW) and the Kingston Crescent count point (KC). These figures are not robust, but give an indication. Table 5.2: Traffic to the west of The Contented Pig MW Year Pedal Cycles Motor- cycles Cars Taxis Buses Coaches Light Goods Vehicles All HGVs All Motor Vehicles 2004 55 90 9110 194 1169 364 10927 2005 47 74 8691 183 1246 377 10571 2006 547 142 10346 642 1077 222 12429 2007 341 136 10180 585 1133 210 12244 2008 383 130 9957 508 1157 211 11963 2009 383 144 10176 502 1175 198 12195 2010 385 138 10114 569 1255 205 12281 Table 5.3: Traffic to the north of The Contented Pig KC Year Pedal Cycles Motor- cycles Cars Taxis Buses Coaches Light Goods Vehicles All HGVs All Motor Vehicles 2004 705 199 11323 704 1838 290 14354 2005 675 209 10972 737 1851 278 14047 2006 474 236 11438 770 1786 420 14650 2007 423 336 11015 749 1939 415 14454 2008 343 221 11158 614 2136 497 14626
  42. 42. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page41 2009 634 376 10862 734 1391 348 13711 2010 994 326 10655 680 1412 329 13402 The footfall is nowhere near what it is like in Commercial Road, but our micro- malls would not depend on footfall only. They would become a destination as well (a percentage of the customers would make a special journey to us) and also attract customers from the surrounding residential areas. The homes notably on the west side of Fratton Road are all well-cared for; people care about where they are living, feel at home, take pride in their homes. I conducted several footfall counts, as summarized in the table below. Evening counts were useless at the time, as EURO2012 was in full swing and everyone was watching telly. Table 5.4: Footfall Fratton location Description 13:20 – 14:20 Sat, June 9, 2012 17:05 – 18:05 Wed, June 13, 2012 17:07 – 18:07 Tues, June 19, 2012 Passed in front 112 118 321 (total, on both sides)Passed on other side 123 135 Of those, parties with children 21 21 14 Passed in front on bicycles 21 18 44 Total real footfall 235 + 21= 256 253 + 18 = 271 321 + 44 = 365 Details In November 2010, there was a small fire in an upstairs bedroom of the Contented Pig. Apparently, two homeless people were living in the building at the time. Hampshire Fire and Rescue Service and Community Wardens then visited the premised. The building was boarded up so that entry was no longer possible. It has a twentieth-century front of red brick, but the rear is estimated as Georgian or earlier. This building has seen continual use for the same purpose for around 200 years. The council apparently would like the building preserved (also the Vicarage and Vicarage Cottage) so as to be in keeping with the character of the area. It is not sympathetic toward what it calls overdevelopment. It might be good to alter currently present alterations or decorations that do not fit well within the area. It would be good to talk to the council and explore whether we can arrange car access from the west side, from the entrance to Merefield House. Also, there is an adopted public footpath to the south of Merefield House, which benefits us. Depending on what happens with the foot path, we may have to decide that we prefer to have car access from Nutfield Place rather than from Fratton Road, also for the sake of traffic safefy. The purchaser of Merefield House will need to obtain a stopping up order if it wishes to divert or close the footpath.
  43. 43. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page42 It is essential to get good advice and consult with the city council before putting in any planning applications in any case. In practice, the Planning Committee often rejects applications on sheer technicalities. This can be avoided. It is also important to supply the right maps that accurately represent the situation on site. The Planning Committee does not always define its criticisms and wishes very clearly, but is aware of this. Phrases like “in keeping with the character of the conservation area” are incredibly vague. In practice, this can boil down to “such that no citizens object, and all us like it”. Citizens’ concerns tend to focus on any inconvenience such as finding it harder to park their own cars. There will be no alcohol on the site and opening hours will be decent, but it is imaginable that some citizens may have questions about noise coming from the terrace in summer. As the area has a great deal of traffic, I think we can make the point that the traffic – on the other side - will usually produce more decibels than a couple of families enjoying ice cream. The person to contact at the Planning Committee appears to be: Mr James Brewer, Planning Services, Portsmouth City Council, Civic Offices, Guildhall Square, Portsmouth, PO1 2AU. Telephone 023 92 834825. Email: james.brewer@portsmouthcc.gov.uk
  44. 44. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page43 6.0 Marketing strategy Social media I want to hire a social media consultant. I could outsource social media, but that would cut into authenticity. It can also create complicated legal angles if I outsource the social media. I should be able to get by with 10 to 30 minutes per day on Facebook, Twitter and similar media. I have already set up a Facebook page and Twitter account. I will hire a consultant and a designer in the startup phase to set it up for me (branding). We will also use this branding for our printed materials. I have already decided on a colour scheme that fits well with what people are currently looking for (bold and vibrant colours). It consists of the two colours TacoMundo is using (a very rich golden yellow and a warm terra red) and a warm and rich blue that will add a touch of style. These are colours I have used before and they create a good atmosphere, slightly classy, but very relaxed. They are tropical colours, colours of an ocean sunset. From time to time, we will need to get the social media consultant in to have a look at what we are doing, what is working and what is not. Publicity I want to advertise on AboutMyArea and I want a review from one of their restaurant visitors. Portsmouth’s AboutMyArea site is the country’s second-best visited AboutMyArea site and its owner and operator, Haley Storey, is very dedicated and hard-working. QR code We can have a QR code painted on shutters and doors, or the side walls, linking to the web site. This could be a great way to link up with passing traffic. Flyers and coupons I want to hand out flyers and coupons, also at the Hoovercraft and ferries, for either a free burrito, taco, chips, pitta with three or four falafel balls or a free ice cream cone to be used in the first two weeks of business. If they use the coupon later, it will give them a 10% discount. Entertainment I want to have face-painting, balloon-sculpting, and, if possible, live music in the week when we open, all week. I want 3D street art (Julian Beever). This is
  45. 45. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page44 wonderful to see and it will certainly draw publicity. People will video this and those videos will be posted to YouTube. That can really jumpstart our turnover. His works take up to four days to complete, so would be great for opening week. Street artist competition Prior to opening, I want a competition for local (street) artists to come up with a design for the shutters (if they are fully closed ones, not a mesh). The winner would then get to implement his or her design. This too will involve the above media. Test panels The test panel sessions that we run prior to opening will also generate publicity, as will any food give-aways and so on. Community ties Developing strong community ties (by for instance offering the photocopier) will also generate good word of mouth publicity. Radio stations, etc Some radio stations are also event sponsors. They may even want to sponsor the street artists or the 3D art. The marketing strategy does need to be elaborated. See also “Community ties and entertainment” on page 18.
  46. 46. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page45 7.0 Management and staffing As I have developed this plan, I would be the appropriate person to lift this plan off the ground, do the purchasing, develop any recipes, standard operating procedures and such. I would hire several people as consultants before we open, to get expert input on vital matters. After a year or so, when operations have stabilized, I could hire a new manager at a better salary, withdraw and remain available (on-site) for advice and for emergencies. In the first year, I would very likely also do a great deal of the cleaning (including toilets). Once a cleaning service starts taking care of the rest of the premises, this service could also clean the restaurant floor, the toilets and possibly the break room. All staff will be able to fulfill all functions at the premises (including tills). Delivery staff will also be able to deliver food to customers; not all other employees will be suitable for that role, and they won’t be selected on it (but it may be good to keep in mind. Tills will be placed strategically and all food types and products can be handled on all tills. At some hours, we can operate with limited staff by using the two vending windows and service the terrace only, and we could also for example only offer ice cream at the vending windows (for example on sunny Sundays, or Sundays with events). This would also mean that the restaurant area wouldn’t need cleaning. The vending windows add a lot of flexibility. MiniMart I will have one employee solely for the MiniMart. Food sections, and general Scheduling will cover breaks. I, as manager, will be able to cover some of the breaks, and small-scale absences too. In the event of, say, a flu epidemic, I won’t be able to cover, and there will likely be a heavy demand on delivery. In such an event, I should hire tem staff to help out. I have started making rosters. I haven’t worked out the holiday cover in detail yet, but I think that I can plan them such that the manager (i.e. I) can fill those temporary vacancies. I may have to hire an occasional temp or engage work placement trainees, but that should be fine. 15 seconds less of waiting time for customers generally means 1% of growth. Adequate staffing is therefore important. Therefore, I initially wanted to start up with 2 persons per food section, full-time, but that would mean that we would be overstaffed at some hours of the day. It also signified a pretty heavy payroll load. I came up with a workable alternative, which involves employing 12 employees, in fte, and that includes me. After all, a Maoz store typically can operate with only 3 to 4 employees depending on the time of day. The ones I know usually only have one or two employees present (but they don’t deliver). Fish & Chips shops also operate with 2 to 4 employees (but don’t deliver either). In general, a limited-service restaurant like ours should spend between 25% and 35% of revenue on staffing, and, if possible, less.
  47. 47. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page46 I will monitor turnover and profits as well as waiting times closely. Twice a year, I will ask customers about waiting times, opening hours, pricing and the like. If my turnover is large enough to support it and I think that waiting times are limiting our turnover, I can hire more staff. Delivery The delivery department will have four part-time employees. We only offer delivery, from 5 pm to 9pm. The delivery employees can also cover for the other staff’s dinner breaks etc, when needed and possible. All staff will get the so-called living wage, which is still only at the level of the Netherland’s minimum wage, and price levels are much lower there for almost everything. In principle, all staff will also get a £100 Christmas bonus (per fte), but this is not in their contracts. In principle, they will also get a £100 vacation bonus (per fte) at the end of May. This too, will not be in their contracts. I want my staff happy and dedicated and motivated. Happy staff also generates good word-of-mouth publicity. A surprise bonus works better than having bonuses in the contracts. Vacation money is standard in the Netherlands, and much higher (usually one month’s wages, but it is taxed higher than regular wages). Dutch businesses also used to have Christmas bonuses or Christmas baskets/gifts, but this is not a rule and related to how the economy is doing. I have included these bonuses in the budget as 200 per year per employee, tax- free. If need be, I can economize on this by halving the bonuses, and skip my own. I do want two bonuses as it is fairer on new or leaving staff. Staff will enjoy a 10% discount on all food, drinks and ice cream. Table: Personnel Personnel plan Year 1 Managers (1) £14,976 Food section staff (8 full-time equivalents) £119,808 Delivery staff (4 half-time) £29,952 MiniMart staff (1 full-time equivalent) NIC due from us is 13.8%, on top of the above (reality may be slightly different for the part-time staff) £14,976 £24,800 Total 12 fte Total payroll (including NIC due from us) £204,512 This is exclusive of any bonuses. In general, a limited-service restaurant like ours should spend between 25% and 35% of revenue on staffing, and, if possible, less. 35% of a turnover of £600,000 is £210,000.
  48. 48. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page47 8.0 Implementation Sourcing When the renovation is underway, I will develop the sourcing. I will consult the owners of successful established business who are at such distances that they will feel no competition from me. I want to talk with three business owners in Southampton, one of which I have discussed his business with before. I want to hire one person as a consultant for the Tex-Mex food. Ideally, I want to go on a purchasing expedition with that person locally too, but if not, then I will go shopping with the person for his or her business. As I will make most of the falafel-related dishes on location, I will also start experimenting with that, and order ingredients from various suppliers. That way, I can test various factors. Some suppliers offer training for new clients. Some suppliers also happily offer the first batch or order for free. It is in the suppliers’ interest to help me get started and keep me running, and I can work with that. The fast food and ice cream are also available as take-away and delivery. The food will be high-quality and will not contain ingredients like corn syrup and high fructose levels. We will make our own falafel. That will allow us to come up with the best quality as well as cut costs. Falafel can be frozen, stored frozen, and thawed prior to use. We will order the pitta bread from a supplier. We will include pickled ginger among our pickled foods. Falafel bars rarely offer pickled ginger; it tends to go with sushi. We will pickle our own ginger. That will save on costs, and that way we can create exactly what we like. People either love ginger or hate ginger, but the latter can easily avoid it. Ginger lovers will appreciate having the option, and may seek us out for that reason. We do not plan to make our own ice cream, as it is highly specialized work that requires extreme dedication and high-quality fresh ingredients that may not always be easy to find. It would take up too much time and effort for the sort of establishment I have in mind, but I do want high-quality ice cream from a supplier. I cannot rule out that eventually, we will make our own ice cream. We will order the tacos, tortillas and the like from a supplier. We will obtain beef, cheese from another one. A third one will be the source of the vegetables for the falafel bar as well. We may (have to) make our own pickled vegetables as well. We will process potatoes and fish on-site. We will make our own batter, and we will also have several sauces, for customers who would rather not have salt and vinegar. I want to offer mayo as an option with the chips as well; this is a Dutch/Belgian option. As mayo contains vinegar, British people may like this too. Pricing Taco Bell’s products are all 99p. McDonalds has many items for 99p as well. I cannot compete with that, but I will have items that cost only 99p. Fish and chips tends to cost around 4 pounds.
  49. 49. Angelina’s Cantinas fast-food micro-mall model for The Contented Pig in Fratton, Portsmouth Final version d.d. 4 November 2012 Page48 Taco Mundo has a wide range of prices, with increments of only 20 eurocents, starting at €2.25, and going up to €6.95 (except multi-product combinations). It seems to work for them. Greggs uses various prices as well, starting with drinks at £1.85, and products at £2.15 and £2.40 and the like. It seems to work for them as well. I will have to establish the exact prices after I have developed the sourcing in detail. I have a tendency to go for simple pricing, but in reality, complicated pricing seems to work much better. This can be tested in our panel sessions. We can also ask the participants what they think of the prices, and see how that compares with what they actually “purchased” during the sessions. Menu deals are a must and we will have items for 99p. Test panels and finding job applicants The ground floor will be finished first. In the month before opening, I will run at least 4 sessions of about 2 hours to which I invite 20 volunteers from the public, including potential job candidates. These sessions will test different food varieties as well as pricing. They will also give me a chance to observe potential job candidates in a more or less operational setting in which they will be more relaxed and more genuine than in job interviews. The idea is to hand everyone £10 or £20 “spending money”, which can be in the form of coupons, and ask them to go to the counters and buy food. I will monitor and evaluate what happens. I will also have a list of questions, let them try and vote on recipe variations and the like. It will also be a great way to start creating a buzz, if people have managed to overlook the obvious developments at the building for example because they are living in a different part of town. I can liaise with the Job Centre about applicants, but also hand out flyers. Publicity A Facebook page and Twitter account have been set up. I will liaise with Haley Storey of About My Area about publicity via her site. I will also hand out flyers and coupons in the mornings to passengers arriving with and leaving with the Isle of Wight hovercraft and ferry. Other combined marketing actions, with other businesses and organizations, are likely. See also the chapter titled “Marketing Strategy” that starts on page 43. Staff training Staff will be trained in the week before opening. This training will include obtaining food hygiene certificates for those who don’t have them yet, and health and safety matters. It will also result in the establishment of preliminary Standard Operating Procedures, to be included in manuals for each section of the enterprise. The first-level food hygiene courses can be done online for as little as about £25, but I would like to hire someone from for example Highbury College to conduct a session on-site. Facilities for customers There will be wireless internet for our customers. Not having it will prevent some people from visiting. One guy who works in a corner for four hours is not such a problem, but one guy like that not being able to tell his contacts about us or worse (being negative about us not having the service) would be a problem.

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