6. 9.4.2 Front of the House Manager (FOH) “Smile Expert”....................................... 66
9.4.3 FOH Employees “Smile Geniuses” .................................................................. 67
9.4.4 Back of the House Manager (BOH) “Culinary Expert”................................... 68
9.4.5 Back of the House Employees “Culinary Masterminds”.................................. 69
9.5 IMPORTANT LAWS TO FOLLOW .................................................................................. 70
9.6 DRESS CODE POLICY.................................................................................................. 70
IMAGE 9.1 ................................................................................................................. 70
9.7 LABOR FORECASTS.................................................................................................... 71
9.7.1 Labor Forecasts for Monday-Thursday............................................................ 72
TABLE 9.2.................................................................................................................. 72
9.7.2 Labor Forecasts for Friday............................................................................... 72
TABLE 9.3.................................................................................................................. 72
9.7.3 Labor Forecasts for Saturday ........................................................................... 73
TABLE 9.4.................................................................................................................. 73
9.7.4 Labor Forecasts for Sunday.............................................................................. 73
TABLE 9.5.................................................................................................................. 73
9.8 THREE YEAR FORECAST OF TOTAL NUMBER OF EMPLOYEES REQUIRED PER SHIFT PER
QUARTER ........................................................................................................................ 74
9.8.1 Forecasting Number of Employees required for Quarter One ......................... 74
TABLE 9.6.................................................................................................................. 74
9.8.2 Forecasting Number of Employees per Quarter per Year................................ 75
TABLE 9.7.................................................................................................................. 75
9.9 COST OF EMPLOYEES ................................................................................................. 76
9.9.1 Cost of Hourly Employees................................................................................. 77
TABLE 9.8.................................................................................................................. 77
9.9.2 Cost of Salaried Employees............................................................................... 77
TABLE 9.9.................................................................................................................. 78
9.9.3 Total Cost of All Employees by Shift per Quarter............................................. 79
TABLE 9.10................................................................................................................ 79
X. NON-HUMAN RESOURCES PLAN WITH THREE YEAR FORECAST
BY QUARTER................................................................................................................ 80
10.1 OFFICE, OPERATIONS AND STORAGE........................................................................ 80
10.2 INSURANCE ............................................................................................................. 81
10.3 UTILITIES ................................................................................................................ 81
10.3.1 Electricity ........................................................................................................ 81
10.3.2 Water and Sewage........................................................................................... 82
10.3.3 Web & Telephone Services.............................................................................. 82
10.3.4 Natural Gas..................................................................................................... 82
10.3.5 Trash................................................................................................................ 83
10.3.6 Utility Forecast by Quarter for Three Years................................................... 83
TABLE 10.1 – Utility Forecast for Three Years......................................................... 83
10.4 PROPERTY TAXES .................................................................................................... 84
10.4.1 Forecasted Property Taxes ............................................................................. 84
TABLE 10.2 – Property Taxes for Three Years ......................................................... 84
7. XI. FINANCIAL ANALYSIS WITH THREE YEAR FORECASTS BY YEAR
........................................................................................................................................... 85
11.1 INCOME STATEMENT ............................................................................................... 85
TABLE 11.1 – Income Statement ............................................................................... 85
11.1.1 Wages .............................................................................................................. 85
11.1.2 Supplies ........................................................................................................... 86
11.1.3 Equipment........................................................................................................ 86
11.1.4 Utilities & Insurance....................................................................................... 86
11.1.5 Other Expenses................................................................................................ 87
11.1.6 Income Taxes & Property Tax ........................................................................ 87
11.2 BALANCE SHEET...................................................................................................... 87
11.2.1 Current Assets ................................................................................................. 87
TABLE 11.2 – Balance Sheet ..................................................................................... 87
11.2.2 Long-Term Assets............................................................................................ 88
11.2.3 Liabilities......................................................................................................... 88
11.2.4 Owner’s Equity................................................................................................ 88
XII. E-COMMERCE................................................................................... 90
12.1 E-COMMERCE SUMMARY......................................................................................... 90
12.2 TABLETS ................................................................................................................. 90
12.3 WEBSITE................................................................................................................. 91
12.4 FINAL THOUGHTS ................................................................................................... 92
XIII. PROCESS MAPS ............................................................................... 93
13.1 RELATIONSHIP MAPS............................................................................................... 93
IMAGE 13.1 ............................................................................................................... 93
13.2 CROSS-FUNCTIONAL MAP ........................................................................................ 94
IMAGE 13.2 ............................................................................................................... 94
13.3 PROCESS MAPS ........................................................................................................ 95
IMAGE 13.3 ............................................................................................................... 95
IMAGE 13.4 ............................................................................................................... 96
IMAGE 13.5 ............................................................................................................... 96
IMAGE 13.6 ............................................................................................................... 97
IMAGE 13.7 ............................................................................................................... 98
XIV. FINAL SUMMARY………………………………………………. .. 99
14.1 MEGHAN MCCLURE ............................................................................................... 99
14.2 ZACKERY WITHROW............................................................................................. 100
14.3 KAITLIN KRUG-BYRD........................................................................................... 101
14.4 ASHLEY GARCIA................................................................................................... 101
XV. REFERENCES............................................................................103-113
8. 1
I. Executive Summary
Blue Ember Steakhouse LLC. is a Steakhouse restaurant and bar located in The Orchard
Mall Parkway of Broomfield, Colorado. Blue Ember can loosely be described as the price of a
casual dining restaurant but the atmosphere and quality of a fine-dining restaurant. The name
Blue Ember comes from a combination of water and fire. These elements are incorporated into
our theme with intimate fireplaces on the patio, personal fire lanterns above each table, and a
15’x12’ water fountain that crusades down the wall first seen when customers enter. The
combination of water and fire will attract our target market and be a key source of differentiation
among competitors.
Blue Ember is targeting individuals between the ages of 25-34. This age demographic
makes up 28.1% of the Broomfield population and income ranges from $60,000-100,000. Our
central location to I-25 will provide a quick travel time of 24 minutes for customers in the
Denver-Metro area.
The Orchard Mall is the optimal location to launch a Steakhouse because we will be the
only Steakhouse within 4.3 miles of the mall. Our goal is to have a 100% customer satisfaction
rating, or the guest gets their money back. Our main differentiator among our competition will be
our superior service; we strive for no less than a five star review on websites like Yelp, Google,
and Tripadvsior.
We are requesting initial seed money of $500,000, which we will repay over five years
with an 8% interest rate. This agreement will be bound under contract to eliminate risk for the
investor. This should be no problem for us to pay back because the previous owner of this
location earned $100,000 in monthly revenues. The ideal location and steady foot-traffic of the
mall make Blue Ember a wise investment.
9. 2
Graph 1.1
This plan outlines our company concept, philosophy, and forecasted financials.
1.1 Objectives
1. Attain revenues of 5,360,000 the first year
2. Increase in second year sales by 3.7% and third year sales by 4.03%
3. Repay our blanket loan of $500,000 in five years, plus interest
1.2 Mission
Our mission is to be a value leader by providing five star quality, nutritious meals at a
four star price. We aim to have every guest leave feeling 100% satisfied and strive to treat our
employees and customers like family. Our goal is to generate a generous profit to repay our
investment, help fund growth, and give back to our community.
1.3 Keys to Success
Providing a five star experience at a four star price through superior quality and customer
service
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
1 2 3
Financial Highlights
Revenue Gross Profit Net Income
10. 3
Follow our “hire the best, be the best” motto, and retaining key employees through
recognition programs
Give back to the community
11. 4
II. Introduction
2.1 Company Description
Blue Ember Steakhouse will be a modern, high-end, casual dining steakhouse aimed at
appealing to a mass market of customers while being a value leader. When guests walk into Blue
Ember Steakhouse, the goal is to make them feel very comfortable and welcome. To do this,
there will be a beautiful waterfall in the center of the restaurant that grabs your attention, as well
as fire pits on the patio and personalized fire torches which will hang above each table and booth.
The lighting will be dim, but the fire torches will provide extra lighting at each table and booth to
create a personal experience for our guests (Palo Alto Software. Inc., 2014).
Blue Ember Steakhouse will be open for business 7 days a week with hours of:
Monday: 11:00am- 10:00pm
Tuesday: 11:00am- 10:00pm
Wednesday: 11:00am- 10:00pm
Thursday: 11:00am- 10:00pm
Friday: 11:00am- 10:00pm
Saturday: 10:00am- 11:00pm
Sunday: 10:00am- 10:00pm
2.2 Location
Blue Ember Steakhouse will be located at 14694 Orchard Parkway Westminster,
Colorado 80023. The location is 6,644 square feet, and includes an outdoor patio. The location is
in the Orchard mall, which provides a steady flow of customer flow year round. The location is
very close to I-25 and our main customer base will come from Northern Westminster, Thornton,
Northglenn, and Broomfield; while also reaching Denver, Boulder, Arvada, Brighton,
Image 2.1
12. 5
Henderson, and Longmont. We are expecting that 75% of our customer flow will be from mall
traffic and the surrounding areas of Westminster and Broomfield, due to the long commutes
required from other cities. We then expect the remaining 25% of our customer base to come
from outlying cities commuting along I-25.
2.3 Legal Structure of the Business
The legal structure of Blue Ember Steakhouse will be a Limited Liability Company. An
LLC requires that the business name contains LLC in the name; legally our business will be
called Blue Ember Steakhouse LLC (Small Business Association 2014). An LLC provides
advantages such as members are protecting from personal liability from business decisions or
actions of the LLC, an LLC offers less registration paper and startup costs than an S-corporation,
and there are fewer restrictions of profit sharing with an LLC (Small Business Association
2014). Members are allowed to distribute profits how they see fit. Disadvantages are members
are considered self-employed and must make all the self-employment contributions to Medicare
and Social Security, which are subject to the income of the entire business (Small Business
Association 2014). Another disadvantage of an LLC is that the business dissolves if a member
chooses to leave the business. However, we will state in our provisions of our operating
agreement to prolong the business if a member dies or chooses to leave (Small Business
Association 2014).
2.4 Strategy and Implementation Summary
Our strategy is to provide our guests with the best quality dining experience and be a
value leader in our industry. We intend to achieve this high level of quality through our food and
service. This high-energy atmosphere, superior service, and quality will appeal to our target
market. Our marketing strategy will be to increase awareness of who we are and what we do to
13. 6
the surrounding cities (i.e. Westminster, Broomfield, Thornton, and Northglenn) and the cities
that border those cities (i.e. Erie, Dacono, Frederick, Brighton). Our main source of marketing
will be word-of-mouth (Palo Alto Software. Inc., 2014).
We will create an electric, fun, classy restaurant that offers superior quality at a
reasonable price. With our superior service and delicious menu items, we will be the talk of the
town. Therefore, the execution of our concept is the key to our success. Our menu items will be
reasonably priced for the area. Though we will not be the lowest priced restaurant in town, we
are will be a value leader (Palo Alto Software. Inc., 2014).
2.4.1 Target Market
We are targeting individuals between the ages of 25-34. In Broomfield County, this age
demographic consists of 28.1% of the population. With an annual median income of $75,000 this
demographic can easily support our concept of being a five star restaurant at a four star price
(City Data). A local competitor, Asti D’Italia in the Orchard Parkway area, has menu prices
similar to ours and has seen immense success over the past five years, proving that our price
point is successful in this area.
2.4.2 Competitive Edge
Our competitive edge is the atmosphere, the menu, the staff, and the service. When
customers walk into Blue Ember Steakhouse, they will immediately feel calm and welcome with
our beautiful waterfall flowing down the center of the restaurant and with the personalized fire
torches at each table. The menu is prepared with the freshest of ingredients; we will locally
source as many ingredients as possible without compromising the value or quality of our dishes.
We will train our staff and management that the customer experience is their main priority and to
14. 7
uphold our 100% satisfaction guarantee promise. All of these things create superior value for our
customers and will bring customers back repeatedly (Palo Alto Software. Inc., 2014)!
We researched reviews from Trip advisor, Yelp, and Google for all of the surrounding
restaurants to get a feel for the quality and expectation that consumers have in that area. As you
can see below the average rating in the area is just over three stars. We are going to strive to be a
five star restaurant with four star prices. This will give us excellent competitive edge over our
competition.
Table 2.1 outlines the average customer rating for both the restaurants within a mile
radius of the mall and the surrounding steakhouses. This provides a glimpse of what style
restaurants customers enjoy in that area. It is clear that people view steakhouses highly in this
area as Hideaway Steakhouse has an average rating of 3.73 and Texas Roadhouse has an average
rating of 4.30.
Table 2.1
15. 8
2.4.3 Main Competitors
Our main competitors within a one mile radius of the mall are not steak houses. Though
they do not provide the same type of food we serve, they are still our competition because we are
estimating that customers would not be willing to travel more than a mile outside of the Orchard
Parkway area for a meal. The nearest steak house from our location is 5.6 miles away (Google
Maps).
The restaurants within one mile of the mall are: Asti-D’Italia, Wine and Cheese, Rock
Bottom Restaurant and Brewery, Hu Hot Mongolian Grill, Marco’s Pizza, Three Margaritas, The
Happy Sumo, Red Robin, and Which Wich. However, as outlined in table 2.1 below, Blue
Ember Steakhouse will be the only steakhouse within a mile radius of the mall (Google Maps).
Our biggest competitors within a radius of the mall are Asti-D’Italia and Rock Bottom.
1. Asti-D’Italia is fine dining restaurant that serves Italian cuisine. They are open seven days a
week from 5:00pm-9:00pm on Monday, 11:30am-2:30pm and 5:00pm-9:00pm Tuesday-Friday,
11:30am-2:30pm and 5:00pm-10:00pm Friday and Saturday, and 12:00pm-8:00pm on Sunday
Table 2.2
16. 9
(Google). Their lunch menu prices range from ($12-$15) and their dinner prices range from
($15-$28) (Google). They offer take out or dine in options. They serve wine, and have a
romantic atmosphere that is not good for children (Yelp).
2. Rock Bottom is a casual dining restaurant that serves a variety of menu options ranging
from seafood to wings. They are open seven days a week from 11:00am-11:00pm except on
Fridays and Saturdays when they close at 12:00am (Google). They serve lunch and dinner and
appeal to a wide demographic. Rock Bottom is a brewery, so they specialize in handcrafted beers
that complement their dishes. Their lunch menu prices range from ($10-$20) and their dinner
prices range from ($13-$22). They offer take out and dine in options (Yelp).
Our main steakhouse competitors within a 5.6 miles radius from our location are: Lone
Star Steakhouse, Outback Steakhouse, Damon’s Grill, Ted’s Montana Grill, Hideaway
Steakhouse, and Texas Roadhouse (Palo Alto Software. Inc., 2014).
Our biggest steakhouse competitors within 5.6 miles of our location are: Hideaway Steakhouse
and Outback Steakhouse.
1. Hideaway Steakhouse is our biggest steakhouse competitor because of their fine dining
experience and their average customer review rating from Google, Yelp, and Trip Advisor is
3.73 out of 5 stars. Their hours of operation are from 11:00am-9:00pm Monday-Thursday,
11:00am-10:00pm on Friday, 3:30pm-10:30pm on Saturday, and 3:30pm-9:00pm on Sunday
(Google). They serve high quality, aged steaks and seafood. According to Trip Advisor, their
menu prices range from ($30-$60) (Yelp).
2. Outback Steakhouse is our second biggest steakhouse competitor because of their well-
known name and their average customer review rating from Google, Yelp, and Trip Advisor is
3.23 out of 5 stars. Their hours of operation are from 11:00am-9:30pm Monday-Thursday,
17. 10
11:00am-10:30pm on Friday and Saturday, and 11:00am-9:30pm on Sunday (Google).
According to Trip Advisor, their menu prices range from ($11-$30). Outback is a casual dining
restaurant (Yelp).
Table 2.3 provides information about our nearby steakhouse competitors regarding
service type, average customer rating, and distance from our location to help us grasp the
distance and service type of other steakhouses in the area. This information aids in determining if
opening a new steakhouse in this area would be profitable. Clearly, the closest steakhouse to the
Orchard Town Center, Damon’s Grill, has a terrible customer rating of 2.42 out of 5 stars. The
lack in high quality steakhouses within the Orchard mall show that opening a steakhouse would
be profitable and a wise investment.
However, any restaurant that sells prepared meals is competition because we are all
competing for the same meal-replacement dollar. Casual and fine dining restaurants will be the
biggest competition, because their quality and service models are most similar to ours. However,
being a value leader means providing the best service and quality at the best price, which is the
heart of Blue Ember Steakhouse (Palo Alto Software. Inc., 2014).
Table 2.3
18. 11
2.4.4 Marketing Strategy
The Orchard Town Center Mall is in Broomfield County with a population of 59,471.
There are 2.61 people per household in Broomfield County. The household income for a radius
of five miles from The Orchard Parkway Mall is between $80,000 and $160,000 (City-Data).
Blue Ember’s target market is between the ages of 25 and 34 with median income of
$75,000. Our location in the Orchard Town Center is situated perfectly for this demographic. In
Broomfield County our target age market makes up almost 30% of the total population in
Broomfield. This is roughly 24,000 people. There are also an abundant percentage of married
couples in this area (City-Data). In Broomfield, 41.4% of the population is married and 40.8%
are married with children. This accounts for over 80% of the population (US-Census). Keeping
that in mind, Blue Ember Steakhouse will target a more family oriented environment, while
retaining a classy and relaxed atmosphere.
Blue Ember Steakhouse is in a central location situated at the edges of Thornton,
Broomfield, Northglenn, and Northern Westminster. The median income and median age vary
slightly for these locations; however these cities contain demographics that appeal to our target
market (City-Data).
I-25 will provide a vast source of customer flow. According to CDOT’s website there are
averages of 100,000 commuters per day on I-25 in Colorado alone. Though these commuters are
most likely spread over the many miles that I-25 covers, we can still gain market leverage by
targeting potentially hungry commuters on this busy highway (C-DOT).
The cities in table 2.3 make up the 25% of our market share forecasted by customers
willing to commute along I-25. The median age and income of individuals living in this area fall
within our target market. We also researched restaurants per 10,000 people to see how many
19. 12
restaurants were provided in these surrounding areas, and found that the number of restaurants
per 10,000 people was much less than that of Broomfield. Based on median age of individuals in
these cities, median annual income, and restaurants per 10,000 people, we believe these cities
make up the 25% of our market that will commute to our establishment (City-Data).I-25 will
provide a vast source of customer flow. According to CDOT’s website there are averages of
100,000 commuters per day on I-25 in Colorado alone. Though these commuters are most likely
spread over the many miles that I-25 covers, we can still gain market leverage by targeting
potentially hungry commuters on this busy highway (C-DOT).
The cities in the chart above will not be in our main customer flow. Due to I-25 and
customer tastes we may see a small customer base from these cities because the demographics
are similar to that of our target market (City-Data).
2.5 Marketing Approach Summary
We will employ three different marketing strategies to raise customer awareness of Blue
Ember Steakhouse. The most crucial marketing tactic will be word of mouth/in-store marketing,
because this will be the cheapest form as well as the most effective (Palo Alto Software. Inc.,
2014).
Table 2.4
20. 13
2.5.1 Word-of-mouth/in-store Marketing:
● VIP Party- this will be held before our Grand Opening. It will serve the dual
purpose of training our staff and introducing ourselves to the community. The
invite list will come from the Chamber of Commerce.
● Grand Opening- open to all of public
● Valentine’s day
● Labor Day celebration
● Annual customer appreciation event
2.5.2 Social Media/Web Marketing:
● We will create and maintain a Facebook, Twitter, LinkedIn, and Instagram
account to keep customers up to date on specials, promotions, and events. This
will be successful because our target market (25-34) makes up 26% of all social
media platform users (Pingdom 2012)
● Yelp Reviews- we will offer 10% off to our customers who create a Yelp
Review of our business
● Encourage customers to follow us on our social media accounts by offering
incentives such as “Like us on Facebook for a chance to win a free meal.”
● Reward Program- we will offer a reward program that encourages customers
to come to Blue Ember Steakhouse. All the customer has to do is create an
account online with their email address and they can earn things like a free
appetizer and free entrée on their birthday!
● Website
21. 14
2.5.3 Local Store Marketing:
● We will create a flyer to raise awareness for our Grand Opening event. These
flyers will come with coupons (i.e. 10% off a dessert or appetizer) and we will
post these flyers throughout business in the mall, on doors of homes surrounding
the area, and in local businesses such as King Soopers and Wal-Mart.
● Create a brochure for local hotels and bed and breakfasts establishments in
town to provide their guests, containing interior and exterior pictures, menu items,
and pricing.
22. 15
III. Data Overview
3.1 Target Market Data
When researching the demographics of our restaurant’s location and surrounding
locations City-data.com was the primary source. City-data.com has very detailed demographic
statistics that were very helpful when determining our target market. One of the most unusual
and useful statistics was the restaurants per 10,000 population, called restaurant density. City-
data also had many statistics like total population, median and mean incomes, and age
breakdowns of residents. However, it was difficult to drill down to the data that was pertinent
because city-data also offers many other statistics like elementary schools in the area and natural
disaster statistics. Though these could give helpful insights, we found that they were a stretch
compared to the more useful data points offered. However, we did not just use one source to base
our demographic information. We compared the data found on City-data with those on various
other websites such as us-census and C-DOT.com. By using a variety of statistical platforms we
were able to verify that the data found on City-data was accurate, and assured that we had stable
information to base our decisions.
3.2 Competitor Data
We also needed to identify our competitors in the immediate area. We used Google Maps
to identify the competitors within the Orchard Mall and steakhouses near our location. Once we
recognized our competitors, we used Yelp.com, Tripadvisor.com, and Google Reviews to
identify what foodservice they offered and how well they are spoken of in the community. This
provided some insight of how threatening the competition would be; understanding that there
may be potentially corrupt data points using this method, such as owners reviewing their own
restaurants and hard to please patrons. To combat these data outliers, we pulled from various
23. 16
websites that offered similar data; by using an average from several sources, the data was more
reliable and accurate.
3.3 Equipment Data
When selecting equipment there were many websites used, such as wasserstrom.com,
westaurant.com, foodservicewarehouse.com, and ckitchen.com. These websites were the primary
source that we used to research equipment and various supplies for our restaurant. To gain a
better understanding of brands and quality of equipment, we used blogs written on
foodservicewarehouse.com which helped us forecast the number of supplies that would be
required to efficiently run our restaurant. We also read blogs from the others sites listed above by
experts in the industry to base our forecasting. The primary focal points of these sources were to
gain insights on quantities needed, quality of products, and leasing or new purchasing strategies.
3.4 Floor Layout
When drawing the floor layout for our restaurant we used pertinent expert advice. These
experts will be clarified at the end of this section. Johnee and Justin Freeman aided us with
restaurant equipment selection, and made recommendations regarding glassware, silverware, and
dishwasher purchases. Jamie Craft gave us her personal accounts of busy and slow seasons and
recommendations for placement of tables and other equipment throughout the restaurant. Finally
we used Left Hand Brewery to source our craft beers, where marketing director Bubba Love
gave us pricing and availability.
3.5 Demand Forecasts
When forecasting our table turns per hour, we tapped many different data sources in an
attempt to get as accurate of data as possible. Some of our data sources were restaurants.org and
Jamie Craft’s personal accounts of working in a similar area. Restaurants.com offered national
24. 17
data of monthly trends in customer purchases. In conjunction to the national data, Jamie’s expert
advice was cross-referenced to the national data to help build our demand forecast.
3.6 Process Mapping
For the process mapping section the main sources used were in class lectures and the
process mapping book. For reference, Process maps were pulled from the internet in order to
compare the ones created for our restaurant and actual maps that are being used in the field. The
maps used for comparison are included in section thirteen.
3.7 Restaurant Location and Initial Capital/Lease Financing Plan
For the restaurant leasing and capital financing plan section, the main source used was
Loopnet.com. Loopnet provided demographics and key information regarding our location
selection. For example, it had the previous owner’s average revenues, key demographic
information, and all of the building information.
3.8 Menu Plan
When creating the menu plan we used a variety of sources in order to get pricing and
availability for food for our restaurant. First off, we used we used Omaha Steaks in order to
source meat products. They provided us with costs and sizing options. We also used Sysco to
source many of our ingredients. Expert Fred Esposito allowed us to use his account in order to
gain access to the pricing, availabilities, and delivery schedules. We also sourced our wine from
CTS distribution, which provided pricing and availability as well.
3.9 Job Descriptions
When creating the job descriptions multidimensional analysis was used. First off, we
used the textbook to attain a decent understanding of what a job description should look like and
referenced our expert Jamie Craft to help us define what personnel is required to maintain the
25. 18
restaurant. Then, we looked at LinkedIn, Outback.com, and Redlobster.com to see what other
restaurants in the field were using for their job descriptions. Information not included was
qualifications and skills for certain positions due to the fact that this information would be more
crucial for recruiting and is not necessary for a business plan.
3.10 Number of Employees Needed
To find the number of employees required to maintain our restaurant, a drill down
approach was used. Based on the table turns per hour forecast created in section eight, a
correlation to the number of employees needed for the amount of customers in our restaurant was
formed. After this we cross referenced this data with expert Jamie Craft in order to make sure our
assumptions seemed accurate and to gain information such as, how many wait staff and cooks
are required to meet table demands. We adjusted these numbers accordingly based on the
demand forecasts per quarter and increased these numbers by 4% every year to support our
growth.
3.11 Cost of Employees
To forecast the cost of hourly employees we used the department of labor to look up laws
regarding tipped employees including minimum wage for tipped and non-tipped employees.
Based on advice from Rinad Abdul (HR/Operations manager) we decided to restrict hourly
employees to a maximum of 25 hours per week in order to avoid having to provide health
insurance to reduce our cost of labor. The Department of Labor also provided information
regarding FICA taxes that was used for both hourly and salaried employees.
The wages for salaried employees were forecasted using Glassdoor.com and Salaries.com
to ensure that our pay was competitive with the market. Salaries.com and Glassdoor.com are also
26. 19
reputable sources, and are commonly used to compare and lookup salaries. Information that was
not needed was laws and salaries from different states and within other industries.
3.12 Expert Bios
Johnnie & Justin Freeman: Collectively they have 20 years of experience in various
restaurants and styles. Justin is currently the general manager for a family diner called Kozy
Kitchen and has worked in all areas of a restaurant including bussing, waiting, and head
chef. Johnnie’s career focus has been in fine dining and steakhouse style restaurants, with
primary focuses on waiting and bartending. She has worked in several states and is an expert at
building customer rapport.
Jamie Craft: Jamie has 24 years of experience in various positions including chef,
hostess, bartender, and server with emphasis in the last two positions. She has worked for various
restaurants from Outback Steakhouse to Rock Bottom, and was involved in the grand opening of
a new restaurant. Jamie’s knowledge includes delivery schedules, knowledge of liquor laws and
regulations, and information regarding payroll and taxes for tipped employees.
Fred Esposito: Fred Esposito is responsible for the creation of menu items and ordering
food and supplies for Atria Senior Living. The kitchen at Atria demands a fast paced cooking
environment with little errors because of the huge surges of clientele at mealtimes. Fred Esposito
allowed us to use his Sysco account to attain live commercial pricing.
Bubba Love: Bubba Love is the marketing director for Left Hand Brewing Company and
is in charge of sales. Bubba Love provided us with pricing and key advice about demand
forecasts and restaurant dynamics.
27. 20
Rinad Abdul: Rinad is the assistant manager for TJ Max in Westminster Colorado. She
has 15 years of experience with staffing and other human resources tasks. She provided us with
information about laws, and how to adequately staff an operation.
28. 21
Image 4.1
IV. Restaurant Location and Initial Capital/Lease Financing Plan
4.1 Restaurant Location
Finding a location proved more challenging than initially expected. However, we
ultimately decided on a large building within the Orchard Mall in Westminster, CO. The building
measures at 6,644 square feet and is for sale for $195,000 (Elfner). The price is on the lower end
of the price spectrum, but the building does not appear to suffer from any obvious blemishes to
induce the low price.
According to Ian Elfner, the Commercial Real Estate Agent involved in this sale, the
current owner of the restaurant is selling his restaurant because his company is downsizing and
changing focus. The previous owner greatly benefitted from the mall environment, as the
previous restaurant consistently earned positive cash flows. There are approximately 178,000
people (as of 2013) within a five mile radius who have a median household income of $75,000-
$85,000. In other words, there are thousands of middle class families and households nearby that
will most likely enjoy a restaurant of this caliber. Our restaurant would be a wise investment, and
sustainable business opportunity in this
thriving Westminster territory.
The building includes a generous
dining space, a functional restaurant
kitchen, a large built-in bar, an outdoor
patio, and a modern style throughout.
There is plenty of potential for
personalization, and it’s a perfect
29. 22
Image 4.2
Image 4.3
foundation for the type of restaurant we are going for.
The patio really caught our attention because it opened up more opportunities for
differentiation, and it gives us
more creative freedom to draw in a broader range of people.
Our goal is to utilize the
outdoor fireplaces, outdoor seating,
and slightly change the ambience of
the restaurant in order to broaden
our net of potential customers. If
anything, the dining experience at
Blue Ember will be memorable.
The steakhouse style of restaurant will be profitable and give us a completive advantage
because there are not any steakhouses within
a mile radius of the Orchard Mall. By
targeting a broad demographic, with
emphasis on targeting families, we are sure
to be successful. There are currently 13
restaurants in this region, which consist of a
handful of breweries, some burger joints, a
few Italian restaurants, and a couple other
miscellaneous cuisines; however, there is
Image from Loopnet
30. 23
Image 4.4
very little selection when it comes to good quality steaks and seafood. Although we will
obviously still have sufficient competition from these already established restaurants,
we will have a competitive advantage of serving a style of food unique to the Orchard area (The
Orchard).
On the map below, the purple arrow denotes the restaurant location, and blue stars denote
immediate competition.
Image from Loopnet
31. 24
Image 4.5
In addition to our style of food, the location of
the restaurant is exemplary. It’s situated along the
outside of the mall, and it’s one of the first buildings
customers can see if they’re on their way to a number of
the mall’s anchors, such as Forever 21, REI, or the
AMC Theater around the corner. Not to mention the
plethora of other shops and boutiques in the surrounding
area, along with an adequate parking along the outside
of the mall. This corner spot offers a multitude of opportunities along with high visibility,
serving as a perfect spot for a new restaurant (Greene).
Another perk of being a part of the Orchard is consistency; there’s ample foot traffic
year-round. We will not have to worry about a slow winter season because so many people will
be on site throughout the shopping season. Steady customer flows occurs because the mall
attracts people in the summer months because of good weather and in the winter due to the
holidays and there is also a very large apartment complex within walking distance to our
restaurant.
4.2 Financing Plan
To pay for our location, we intend to pursue debt financing. Although the building itself
only costs $195,000, we intend to borrow one blanket loan to cover the initial costs of our fixed
assets along with startup costs. We anticipate a $500,000 investment should adequately cover
these costs. We expect our business to perform well enough that we will be able to repay the
32. 25
investment under a 5-year plan, which would translate to a repayment of about $7,000 per month
(Mortgage Payment Calculator). This should be no problem considering the success of the
previous owner in the mall environment. Considering the centralized location (right between the
Denver and Boulder Metropolitan areas), the demographics of Westminster, and the history of
this location’s success, we anticipate that paying off this loan should not be a challenge.
33. 26
V. Menu Plan
5.1 Menu Summary
In order to match our elegant style of restaurant, our products must do the same.
Distributors will include Omaha Steaks, Sysco, CTS Distributing Inc., and Left Hand Brewing
Company. These suppliers will provide our meats, general produce, wine and beer, respectively.
Omaha Steaks will provide our red meat, to ensure we are serving well graded meats to meet the
USDA standard of quality (Talavera). Sysco will provide the produce necessary to complete the
majority of the remaining sides and entrees. They will be providing local fresh produce, canned
items, refrigerated items and freezer items for Blue Ember Steakhouse (The Sysco Brand Family
– Produce). Sysco of Colorado is located twenty-five minutes away from the restaurant as well
as Omaha Steaks. Overnight shipping will be required from each distributor in order to get the
freshest and highest quality goods for our customers. CTS Distributing Inc. is located in
Colorado and specializes in the distribution of wine from different areas around the world. This
company has specific wines to coordinate with the meals we serve at Blue Ember Steakhouse,
creating a more personalized atmosphere by pairing wine with entrees to enhance the flavor of
the wine and food (All Wines). The three distributors listed above have been chosen as they fit
the criteria of Blue Ember. Only one distributor is needed for each specific category as they each
fulfill the menu items listed below. Finally, the Left Hand Brewing Company and Coors
Distributing Company will be providing local brewery and well known beers to Blue Ember to
supply the bar area at our location. Left Hand has a wide selection of year round and seasonal
beers. As the seasons change, Blue Embers beer menu will coincide to incorporate the festivities
of the season. This will help in differentiating Blue Ember from our competition (Cassaro).
Seasonal Beers are listed in the menus provided below.
36. 29
Image 6.1
Table 6.1
VI. Supply Chain
6.1 Potential and Chosen Suppliers
Each supplier considered for Blue Ember’s business had several factors that appealed to
the company; however, some were better than others. For beef supply, we narrowed the options
to either Stampede Meat or Omaha Steaks. Each company has great quality products and serves
to ultimately satisfy their customers.
Stampede Meat makes sure to provide
Multiple Defense Strategies to provide a
food safety to consumers (Stampede
Meats). This action also provides
reassurance to the consumer that they will
never get poor valued products. Per Contra, Omaha Steaks has a similar guarantee, and the safety
of their meats are ensured by USDA standards. Their guarantee promises that if a consumer is
unhappy with any provided product, they will either replace or refund the purchase. Both
companies appealed to the standards of Blue Ember. Essentially, it came down to prices and
presence of products needed at our restaurant. In conclusion, Omaha Steaks is now the supplier
for beef at Blue Ember. The prices and availability at Omaha Steaks are included in the
following table.
Ingredients Packs
Est. servings &
Units
Cost ($)
Cost per
serving
Skewers 4/8oz 4 Servings $25 6.25
Rib Eye 6/10oz (8/16 - $179) 6-8 Servings 93 16 (11.19)
Top Sirloin 8/5oz (4/7oz - $46) 4-8 Servings 50 6.25
NY Strip 4/9oz 4 Servings 55 13.75
Pot Roast 4Lbs 8 Servings 99 8.25
MEATS
37. 30
Table 6.2
Similar decisions were made for the distribution of wine to Blue Ember. The companies
considered for distribution include Barefoot Bubbly and Empire Distribution. Although each
company has good quality wines, Barefoot has a vast amount of products to match our
atmosphere at Blue Ember. Empire Distribution, however, does not have an ‘empire’ amount of
wines. Empire Distribution has a small collection of similar wines that just wasn’t satisfactory
for the large variety of consumers’ needs of Blue Ember.
The location of Blue Ember has a very large amount of beer handles, totaling twenty six,
at the location. To assure that every handle is being used to satisfy the demographics of Blue
Ember’s consumers, two distributors for beer are being used; they include Left Hand Brewery
and Coors Distributing Company. Left Hand Brewery is a local company providing a new craft
beer taste to customers; for example, the Nitro selection (Bubba Love). Additionally, for the
consumers loyal to the Coors brand, we are providing an optimal selection of Coors products for
our customers to indulge in as well. The variety of beer allows every customer the option to
order a classic and familiar beer, try something local, or try something new. The beers from Left
Hand Brewery, Coors, and wines are listed below respectively.
Type Size Cost for size
Price per
Glass
Servings
per case
Cost/
Glass
Soft Drinks/ Tea/
Lemonade 5 Gallon BIB 50
380 (10oz)
servings $0.13/ glass
400 Pound Monkey
IPA
15.5 gal $115.00 $4.75 110 $1.05
Black Jack Porter 15.5 gal $115.00 $4.75 110 $1.05
Milk Stout Nitro 15.5 gal $115.00 $4.75 110 $1.05
Milk Stout 15.5 gal $115.00 $4.75 110 $1.05
Polestar Pilsner 15.5 gal $115.00 $4.75 110 $1.05
Sawtooth Ale 15.5 gal $115.00 $4.75 110 $1.05
Sawtooth Ale Nitro 15.5 gal $115.00 $4.75 110 $1.05
Stranger Pale Ale 15.5 gal $115.00 $4.75 110 $1.05
Wake Up Dead
Imperial Stout
15.5 gal $115.00 $4.00
165 (8oz
Glass)
$0.69
Wake Up Dead
Imperial Stout Nitro
15.5 gal $115.00 $4.00
166 (8oz
Glass)
$0.69
DRINKS
38. 31
Table 6.3
Sysco will be the main provider for
the remainder of supplies for Blue Ember.
These include, but are not limited to,
produce, seasoning, canned foods and
seafood products. The other company that
was considered for distributing similar products was American Food Distribution. Although they
have similar products, their pricing and quality in the two companies varied greatly. American
Food Distributors did not include all the products necessary to create complete meals at Blue
Ember, whereas Sysco provided all the products Blue Ember needs to create affordable and
satisfying meals.
Type Size Cost for size
Price per
Glass
Servings
per case
Cost/
Glass
Good Juju 7.75 gal $145.00 $6.30 55 $2.63
Fade To Black Vol. 1 7.75 gal $145.00 $6.30 55 $2.63
Fade To Black Vol. 2 7.75 gal $145.00 $6.30 55 $2.63
Fade To Black Vol. 3 7.75 gal $145.00 $6.30 55 $2.63
Fade To Black Vol. 4 7.75 gal $145.00 $6.30 55 $2.63
Fade To Black Vol. 5 7.75 gal $145.00 $6.30 55 $2.63
Oktoberfest Marzen
Lager
7.75 gal $175.00 $7.40 55 $3.18
Warrior IPA 7.75 gal $175.00 $7.40 55 $3.18
Coors 15.5 gal $110 $4.50 110 $1.00
Coors Light 15.5 gal $110 $4.50 110 $1.00
Fosters 15.5 gal $110 $4.50 110 $1.00
Miller Lite 15.5 gal $110 $4.50 110 $1.00
Miller 64 15.5 gal $110 $4.50 110 $1.00
Blue Moon 15.5 gal $110 $4.50 110 $1.00
Barefoot Wines 25 oz $6.99 $5.00 5 $1.40
DRINKS
Image 6.2
39. 32
Table 6.4
As Blue Ember will be ordering food several times per week, we will need to know the
amounts to order and what specifically to order. To help with this, the POS system provided on
every tablet, later discussed in 12.1, will keep track of orders from customers. By keeping track
of every order, the system knows what ingredients have been used and will therefore know what
inventory is running low. A notification will alert the restaurant manager of the low inventory
and will recommend placing an order. To further accuracy of inventory, the closing manager will
perform an inventory count where inventory is told to be low according to the POS system. This
will ensure no extra spending will occur. The breakdown of all food products required for
preparation and serving are listed in the tables on the following pages.
Ingredients Packs
Est. servings &
Units
Cost ($)
Cost per
serving
Romaine Lettuce 24 heads 100 servings $31 0.31/serv
Strawberries 2lb 40 Berries 9.25 0.23/ berry
Chicken Breast 40 pieces 40 breasts 32 0.80/ breast
Cranberries 4 lbs ~180 servings 7 .04/ serv
Almonds 5lbs ~220 servings 33 .04/ serv
Carrots 5lbs 40 carrots 5 0.13/ carrot
Red Potatoes 50lbs 150 potatoes 44 0.29/ potato
Minced Clams 5lbs 20 servings 17 0.85/ serv
Celery 24ct 48 servings 21 0.43/ serv
All Purpose Flour 25lbs ---------------- 7 ----------------
Cornstarch 25lbs ---------------- 24 ----------------
Chicken Broth 4 lbs 16 servings 3 0.19/ serv
Pecans 5lbs ~220 servings 46 0.21/ serv
Olives 4.5lbs 2.5
Cucumbers 24ct ~96 serv 12 0.13/serv
Eggs 30lbs 240 eggs 37 0.15/ egg
Ranch Dressing 1 gal ---------------- 11.5 ----------------
Strawberry Vinaigrette
Dressing
1 gal ---------------- 50 ----------------
Blue Cheese Dressing 1 gal ---------------- 51 ----------------
Italian Dressing 1 gal ---------------- 33 ----------------
Lobster Bisque 4lbs 8 servings 11.5 1.44/ serv
SOUP & SALAD INGREDIENTS
42. 35
Table 6.7
Tables 6.8 & 6.9
6.2 Inventory Management Strategy
Blue Ember will have a specific monthly budget set aside for purchasing the goods listed
above. Although there will be a monthly budget for the products, the ordering will occur two to
three times weekly. The budget will be broken down to accommodate for the procedure. This
ensures that Blue Ember has the freshest products available in the industry. The distributors
selected for Blue Ember have differing time schedules for delivery, therefore are provided in the
following charts:
Ingredients Packs
Est. servings &
Units
Cost ($)
Cost per
serving
Graham Cracker
Crumbs
25lbs ---------------- $45 ----------------
Vanilla 1 gal ---------------- 16 ----------------
Cocoa Powder 25lbs ---------------- 83 ----------------
Baking Powder 5lbs ---------------- 51 ----------------
Chocolate Chips 25lbs ----------------
Vanilla Ice Cream 5 gal ---------------
Vegetable Shortening 35lbs ---------------- 27 ----------------
Granny Smith Apples 113ct ---------------- 30 ----------------
Cinnamon 6/1lbs ---------------- 10 ----------------
Whip Cream 6/.5lbs ---------------- 78 ----------------
Blueberries 12/.5lbs ---------------- 46 ----------------
Blackberries 12/.5lbs ---------------- 41 ----------------
Bananas 1/40lbs ---------------- 48 ----------------
30 ---------------
DESSERT INGREDIENTS
Order Days Delivery Days
Delivery
Times
Monday Wednesday 1-3pm
Tuesday Thursday 1-3pm
Wednesday Friday 1-3pm
Thursday Saturday 1-3pm
Friday Sunday 1-3pm
Saturday Monday 1-3pm
Sunday Tuesday 1-3pm
SYSCO DELIVERY
Order Days Delivery Days
Delivery
Times
Monday Friday All Day
Tuesday Saturday All Day
Wednesday Sunday All Day
Thursday Monday All Day
Friday Tuesday All Day
Saturday Wednesday All Day
Sunday Thursday All Day
OMAHA STEAKS, CTS
43. 36
In receiving products on delivery dates, waitstaff employees will be required to unpack
and store products in their appropriate locations. Every employee will be trained on proper
storage of produce, meats, frozen food items and other products that are delivered to Blue
Ember. By providing this training, Blue Ember can avoid any mishaps of incorrect storage that
can lead to any unnecessary expenditures.
The proper storage of products is essential to the preservation and quality of Blue
Ember’s inventory and will be kept in appropriate facilities. The available storage at the location
of Blue Ember provides a 10x10x6ft refrigerator and freezer space to store cold food items. In
addition, there is also a storage area 10x15x6ft for dry food products.
The fruits and vegetables will be kept in a combination of both fridge and storage area to
maximize shelf life. Meat will be kept in the refrigerator for no more than five days to
accommodate for the FDA regulations and health codes (U.S. Department of Health and Human
Services). Furthermore, all uncooked meat will be kept on a separate shelf than other products
for the safety all foods being stored. This will ensure that no contamination of uncooked meats is
spread to other products. Seafood products will be immediately stored in the freezer to keep the
products from expiring in an untimely manner. The ice cream ordered will also be kept on a
different shelf of the freezer space available. Regular seasonings and specific ingredients, such as
oregano or flour, will be kept on shelves above cooking and preparation areas for readily
available use for chefs and to minimize traffic in the kitchen area. Similarly, canned items and
dry food items will be kept in the storage area in an orderly first-in, first-out routine.
Alcoholic beverages will be kept in multiple storage areas for convenience of the
waitstaff. Beers will be kept in the beer cooling areas close to the bar. This also aids bartenders
for when the beer is to be exchanged in the bar area. Furthermore, white wine and red wine will
44. 37
be kept behind the bar in appropriate storage areas. For example, white wines will be chilled for
customers and red wine will be served at room temperature. All products are accommodated for
in the large available Blue Ember storage space.
45. 38
Table 7.1
VII. Revenue and Product Variable Cost Analysis with Three Year Forecast
by Quarter
7.1 Forecasted Quantity Sales
In order to calculate the quantities of each item that would be ordered by quarter, we
began with our demand forecast. We also mapped out the distribution of orders based on
category (appetizer, salads, entree, desserts, drinks) and then by individual item. This distribution
is demonstrated in the chart below.
Although we recognize that all of the dishes will most likely not be sold at exactly the
same rates, for the sake of simplicity and comparability, we have recorded the quantities
uniformly to follow these distributions.
The process we used to creating the primary demand forecast will be detailed in the
Demand Forecast Sections (VIII). We referenced the Customer Flow per Month (Section 8.7) to
determine the quantities demanded of each dish. In order to simplify the information presented in
the 3-year-forecast, we rounded the quantity values to the nearest hundred to make the values
simpler to process and evaluate.
Type of Dish
% that will
order
Type of Dish % that will order
Appetizer 50% Cajun Rib Eye 5%
*Appetizer as Entree *25% Top Notch Top Sirloin 5%
Crab Cakes 8% NY Strip 5%
Jalapeno Poppers 8% Home Style Pot Roast 5%
Pretzel Bites 8% Red Lobster Tail 5%
Flat Bread 8% Snow Crab Legs 5%
Shrimp 8% King Crab 5%
Lobster Nachos 10% Lobster, Shrimp and Crab Dish 5%
Soups/ Salads/ Kids 20% Desserts 15%
Strawberry Chicken Salad 2.50% Cheesecake 3%
Caesar Salad 2.50% Brownie Bowl 3%
Custom Steakhouse Salad 2.50% Chocolate Chip Cookie 3%
Clam Chowder 2.50% Apple Pie 3%
Lobster Bisque 2.50% Trifle 3%
Chicken Tenders 2.50% Drinks 95%
Shrimp Basket 2.50% Soft Drinks 55%
Cheeseburger 2.50% Tea/ Lemonade 5%
Main Entrees 55% Lefthand Perennials 12.50%
Smoked/ Grilled Salmon 5% Miller Coors Perennials 12.50%
Shrimp 'n' Alfredo 5% Seasonal Beers 5%
Sassy Shrimp 'n' Steak Skewers 5% Wines 5%
47. 40
110000
115000
120000
125000
130000
135000
1 2 3 4 5 6 7 8 9 10 11 12
QuantitiesDemanded
Period (Quarter)
Forecasted Total Quantities Graph 7.3
Annually, we anticipate a growth rate between 3-4% in attendance (“Facts at a Glance”).
Our restaurant has the space to accommodate this increase comfortably for the first several years.
Also, we observe a seasonal trend that peaks during Quarters 2-3 each year. We also increased
the projected quantities of our Lobster Nachos in comparison to the other appetizers because we
plan to market it as one of our signature plates.
It’s important to note that an estimated 30% of our customers will order an appetizer dish
as an entrée (Blount). This is a relatively new trend in the restaurant business, and we would
experiment with ways to capitalize on this statistic if we observe this trend with our customers.
Here is a visual representation of demanded quantities as a whole over the 3 year period:
7.2 Raw Material Cost
From here, determining the cost of each product was a little less daunting. As
demonstrated in the Supply Chain Section (VI), we created an itemized breakdown of each
ingredient including the package size, price, number of servings per item, and the cost to the
restaurant per serving using standard serving sizes (WMU). For the Raw Materials Cost, we
simply used our calculated values for cost per serving along with our forecasted quantities to
determine the total raw material cost per menu item. Again, we rounded to the nearest hundred
whenever possible to maintain consistency.
49. 42
Upon completion of this section, we were able to clearly see which items were the most
expensive to us. Items like the Combo Platter, Cajun Rib Eye, and NY Strip were the priciest
from the restaurants standpoint, so those are the items we want to keep an eye on as far as plate
portions, waste, and inventory. We can also see that our yearly costs average just above $1.6
Million. That’s a pretty huge number, and as a company we will monitor our orders as efficiently
as possible as to eliminate waste whenever possible.
Also, when calculating our cost of beer and soft drinks, we accounted for waste in the
form of excess foam, spills, and pouring error (Bubba Love).
Although we included increased raw material costs as a result of increased demand. We
also accounted for seasonal cost variations by finding the average annual cost of each item. We
made this decision because the some of the food costs fluctuate somewhat drastically from
season to season, and averaging the costs creates a standardized way to see the actual cost of
each item. For inflation, we anticipate an annual rate of about 1.6% each year, and we would
most likely make minor adjustments to our menu prices to counter inflation costs (“Facts at a
Glance”).
7.3 Menu Pricing/Revenues
To start this process, we had to re-evaluate our menu prices to make sure they lined up
with our Raw Material Costs. This meant making sure the items that costs the restaurant the most
were at the highest price point on the menu. After confirming that the item costs and prices were
paralleled, we began to analyze the revenues by each individual menu item. The distribution is as
follows:
51. 44
0
20000
40000
60000
80000
100000
120000
140000
REVENUES($)
DISH
REVENUES (YR2,Q2) Graph 7.6
As expected, the priciest items tended to generate the highest anticipated revenues.
However, it’s important to pay attention to the Lobster Nachos projection and the soft drinks
projection (Koteff). They both have revenues exceeding some of the primary entrées, and we
want to make sure to pay attention to these as our restaurant gets on its feet. Even though soft
drinks are only $2.00 per person, this is an item that sees the highest quantity of orders
(Marburger). To ensure the Lobster Nachos provide the highest profit margin possible, we will
market them as a unique dish to Blue Ember.
Also, we need to be aware of what our totals mean. We expect to have about $5.5 Million
in revenues per year. Although that number may seem a little high, it lines up with our
projections. Blue Ember is providing a more refined dining experience at prices that may be a bit
higher than the surrounding restaurants. The higher prices account for the higher revenues;
however, they are prices that the public will be willing to pay without significantly hindering
demand.
7.4 Gross Profit
This is a primary key performance indicator, and it looks like we are headed in the right
direction. Our gross profit per menu item is distributed as follows:
53. 46
Graph 7.8
As a whole, we aimed for a profit margin of about 75% as recommended by experts (Esposito).
Obviously, this was easier for some items than it was for others. Our projections show a profit
margin of about 70.6% all together.
Below, I have a distribution of revenues compared to gross profits during Quarter 2 of year 2:
By the end of three years, we estimate to have about $11.8 Million in gross profits.
Although this number seems very high at first glance, it’s important to note that this profit value
is before all operating and administrative expenses. However, it’s a strong prediction that reflects
the potential success of Blue Ember if executed properly.
0
20000
40000
60000
80000
100000
120000
140000
CrabCakes
FlatBread
PretzelBites
Jalapeño…
Specialty…
LobsterNachos
Strawberry…
CaesarSalad
Steakhouse…
ClamChowder
LobsterBisque
Chicken…
ShrimpBasket
Cheeseburger
Salmon
Shrimp'n…
Skewers
CajunRibeye
TopSirloin
NYStrip
PotRoast
LobsterTail
SnowCrabLegs
KingCrab
ComboPlatter
Cheesecake
Brownie
Cookie
Pie
Trifle
Softdrinks
Tea/Lemonade
Lefthand…
MillerCoors…
SeasonalBeers
Wines
AMOUNT($)
DISH
Gross Profit (YR2, Q2)
REVENUE PROFIT
54. 47
Image 8.1
VIII. Restaurant Equipment Selection and Floor Layout
8.1 Summary Equipment Selection Strategies
When searching equipment from vendors, multiple purchasing options are available and
all have pros and cons associated. For Blue Ember, we found that the best methods are to buy
used or lease the more expensive and backroom equipment such as freezers, dishwashers and
ovens and purchase the more customer oriented products like tables and glassware. By pursuing
the majority of our equipment used or leased it is going to minimize our initial blanket loan and
lower the risk for our investors and owners. Also, many companies offer free leasing plans for
some smaller pieces of equipment like coffee makers. We will utilize this benefit to the fullest
because it aids in keeping initial debt low. Many of the free leased equipment does not last more
than two years; by leasing this equipment, it will help reduce repair and replacement expenses.
Also, all equipment and supplies in our restaurant will be NSF (National Sanitation Foundation)
certified in order to meet compliance with The Department of Colorado Health and FDA
regulations.
8.2 Kitchen Equipment
8.2.1 Stoves
Before selecting natural gas equipment, we verified
compatibility with our location. It is a benefit our location is equipped
to run natural gas appliances because it is a common occurrence in the
restaurant industry to overload electrical circuits with too many solely
electric cooking units. We reviewed many brands but the two that
stood out were Garland and Vulcan. The Garland units are better rated and more affordable, but
do not offer stoves that meet our requirements. Though the Vulcan brand is more expensive the
55. 48
Image 8.2
Image 8.3
layout of the cooktop would allow for greater cooking flexibility and allow our chefs to cook
with superior efficiency. The Garland unit leases for $130 per month while the Vulcan (upper
right) leases for $185 per month. Due to the variables presented above we found that the Vulcan
unit would better suit our needs (CKitchen).
8.2.2 Cooling and Freezing Equipment
Quality freezers and refrigerators must be selected to
ensure proper food preservation. The final two brands that we
considered are Kolpak and Norlake. These too brands do not
differ much in price and quality. They both offer free freight and
installation and have ample selection of size and additional features. The combined leasing price
for both the refrigerator and freezer per month for Kolpack and Norlake are $308.00 and $274.00
respectively (CKitchen). Ultimately we selected the Kolpak units (shown above) because they
have a much faster installation schedule than their Norlak competitor,
whose wait time was an upwards of two months. We will also have two
smaller food coolers located in the kitchen and the bar area shown to
the right. The total monthly leasing cost of these units collectively is
$64 per month (CKitchen). They are Beverage Air branded and have excellent reviews. These
units will aid the ergonomic design of our restaurant and improve efficiency by reducing the
number of times of our line cooks and bartenders go to the main refrigerator.
56. 49
Image 8.4
8.2.3 Fryers
When selecting a fryer we kept in mind that Blue Ember does not primarily focus on fried
foods, but it is an element to the business. When researching a fryer the key elements kept in
mind are low cost and efficiency. The vendors we considered were Garland and Vulcan (The
same vendors considered in section 8.2.1). Though other brands exist such as Frymaster and
Toastmaster, our best price point was with the Vulcan because of a 15%
discount they offer for bulk purchases of three or more Vulcan units. The
Vulcan unit can be leased for $182 per month and is compact with two fryers
and timers. This provides ample frying power for our needs. The Garland unit
costs $87 per month to lease and has similar features; two timers and baskets
(CKitchen). The Garland unit is rated inferiorly to the Vulcan, and offers two less years of
warranty coverage than the Vulcan. We selected the Vulcan fryer because it is a better quality
machine and we qualify for a bulk discount.
8.2.4 Soda Dispensing System
The soda dispensing system will be one of the only items we
purchase in full. Leasing is quite difficult and many companies that lease
soda machines do not have a good reputation. The life expectancy of a soda
machine increases if kept clean and maintained regularly (Soda-
Dispensers.com). The unit we will add to our back area will be a 6-flavor
soda system sold through sodadispenserdepot.com. It offers a bin to hold ice and CO2 regulators
and tanks built into the unit, making CO2 changes quick and easy. The unit costs $1,199.00 plus
shipping and handling. To be efficient we will pipe a soda gun to the bar area also so that our
bartenders can easily make mixed drinks. The unit we chose costs $950.00 to install in the bar
Image 8.3
