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Business Plan Assignment Sample

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It is a business development proposal, designed for establishing a new venture as an entrepreneur. A new venture needs to have a detailed business proposal plan. This business proposal plan is a prescribed expression of the entrepreneurial vision along with description regarding the operations and strategy of the proposed endeavor. The main advantages of writing a detailed business plan is the offsetting the costs. Business plan enables the top management and executives in the firm to ponder about the business comprehensively, to converse the business objectives to personnel, to include a decision making base and to smooth the progress of the planning (George and Bock, 2012).

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Business Plan Assignment Sample

  1. 1. SampleDocumentbyhttp://www.globalassignmenthelp.com/ Business Plan Business Plan for Start-up: Restaurant in Ulaanbaatar, Mongolia Type of Documents : Business Plan No of Words : 12850 Disclaimer: This is a sample document prepared by globalassignmenthelp.com and has been submitted on turnitin. To order the similar paper please contact at: Email : help@globalassignmenthelp.com Phone: (UK) +44 203 3555 345 Website: http://www.globalassignmenthelp.com/
  2. 2. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 Website: http://www.globalassignmenthelp.com/ Submitted on: 26 th Oct 2012 Words: 12000 Business Plan for Start-up: Restaurant in Ulaanbaatar, Mongolia
  3. 3. This is a sample document owned by http://www.globalassignmenthelp.com/ ACKNOWLEDGEMENT I am extremely indebted for the support presented to me during completion of this business plan by my mentor, family and friends. In sequence, I would like to thank my mentor, for providing me the opportunity to venture this project and guiding me at each step of the work. Furthermore, I also fancy thanking my team members for helping me in the data collection and analysis for primary research in order to have relevant results for the dissertation. This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  4. 4. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 EXECUTIVE SUMMARY This business development plan is intended for establishing a new venture as an entrepreneur. Every new venture requires a detailed business proposal plan. The main advantages of writing a detailed business plan is the offsetting the costs. This business proposal plan is a prescribed expression of the entrepreneurial vision along with description regarding the operations and strategy of the proposed endeavor. Business plan enables the top management and executives in the firm to think about the business comprehensively, to converse the business objectives to personnel, to include a decision making base and to smooth the progress of the planning. This plan supplies detailed information about the proposed business plus the place of business and covers the essential strategic business plan required for preliminary establishment and operation of Aмттай: Food for choosers, a multi cuisine restaurant and bar at Ulaanbaatar. It is a project requiring start-up capital of $350,500. This restaurant will target the tourists coming to the city Ulaanbaatar. This target customer base has been chosen as a result of increasing tourism in the country. Here, customer will experience a completely new theme for enjoying their preferred food choices at a single place in a Mongolian cultural ambience. This restaurant also includes a bar in it. This bar will offer liquor from different origins with best quality service. Actually the restaurant is going to provide Mongolian style hospitality for food of customer’s choice from any cuisine. This plan outlines the business growth, methods, operations, and infrastructure management. This business will be developed by a dynamic and hard-working team of proven managers and chef. This entire work flows in five consecutive chapters. First chapter is of introductory, which offers rationale for the Business idea, chosen place of business, aims and objectives of the work etc. By this, the reader will get acquaintance about the background of the study. The main aims of the study are to provide a detailed business plan to establish the proposed business backed by rigorous feasibility tests. Beginning of the chapter sketches the pertaining business process, client base, situation, working etc at the proposed restaurant. In the second section, the Business Concept has been defined. Here a detailed portrait of the business idea, Mission, Vision, Concerned Product, Positioning, Scale and growth anticipation etc. have been given. It provides details related to the company, company’s management, business process, industry etc. Feasibility Analysis is the third section of the work, which aims to analyze the business proposal’s feasibility from different perspectives,
  5. 5. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 such as Product/service, Industry/market, Organizational and financial angles. Further a resource requirement evaluation has been carried out for the Business. In the fourth section, strategic analysis of the business proposal and a business model has been developed. This incorporates Strategic analysis of the Business Idea through literature review, Value chain and SWOT analysis of the proposal, identification of competitive advantages and sustainability, strategy selection for business success etc. The last section offer an overall assessment of Business Development Proposal, schedule of Business Plan and discussion of critical success/ failure factors for the business. On the basis of the entire work, it can be said firmly that opening a restaurant with the proposed theme, seems to be challenging but is a profitable and has a potential of long term sustainability. This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  6. 6. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 Table of Contents CHAPTER 1: INTRODUCTION .............................................................................................. 1 1.1 Rationale for the Business idea ................................................................................... 1 1.2 Scenario Chosen .......................................................................................................... 2 1.3 Aims and objectives of the work ................................................................................. 3 1.4 Structure of the work ................................................................................................... 4 CHAPTER 2: THE BUSINESS CONCEPT ............................................................................. 5 2.1 Description of the business idea .................................................................................. 5 2.2 Mission ........................................................................................................................ 5 2.3 Vision .......................................................................................................................... 6 2.4 Menu............................................................................................................................ 6 2.5 The Ambience ............................................................................................................. 7 2.6 Positioning ................................................................................................................... 9 2.7 Scale and growth anticipation ..................................................................................... 9 2.8 Start-up summary ...................................................................................................... 10 CHAPTER 3: FEASIBILITY ANALYSIS ............................................................................. 16 3.1 Primary Market research ........................................................................................... 16 3.2 Secondary Market Research ...................................................................................... 18 3.3 Feasibility .................................................................................................................. 18 3.1.1 Product/service ................................................................................................... 18 3.1.2 Economy, Industry and Place ............................................................................ 20 3.1.3 Organizational Feasibility .................................................................................. 22 3.1.4 Financial Feasibility ........................................................................................... 24 3.4 Resource requirement Evaluation ............................................................................. 32 CHAPTER 4: STRATEGIC ANALYSIS AND BUSINESS MODEL ................................... 33 4.1 Strategic analysis of Business Idea ........................................................................... 33 4.2 Value chain and SWOT............................................................................................. 34
  7. 7. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 4.3 Sources of competitive advantages and sustainability .............................................. 35 4.4 Business model .......................................................................................................... 35 CHAPTER 5: BUSINESS PLAN ............................................................................................ 37 5.1 Overall assessment of Business Development Proposal ........................................... 37 5.2 Business Plan Schedule ............................................................................................. 37 5.3 Discussion of critical Success/failure factors ............................................................ 39 APPENDICES ......................................................................................................................... 40 REFERENCES ........................................................................................................................ 42 BIBLIOGRAPHY .................................................................................................................... 46 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  8. 8. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 List of Figures Figure 1 Table arrangements in the Aмттай ---------------------------------------------------------- 7 Figure 2 Interior of the restaurant gers. ---------------------------------------------------------------- 8 Figure 3 Mongolian Hospitality style and clothing --------------------------------------------------- 9 Figure 4 Mongolian traditional art ---------------------------------------------------------------------13 Figure 5 Rating of key competitors for different attributes ----------------------------------------20 Figure 6 Growth representation for Mongolian GDP (Hallberg, R., 2012) ----------------------21 Figure 7 Break Even Analysis -------------------------------------------------------------------------31 Figure 8 value chain at Aмттай ------------------------------------------------------------------------34 List of Tables Table 1 Estimation of customer foot fall at Aмттай ................................................................ 10 Table 2 Start-up human resourse requirement ......................................................................... 10 Table 3 Start-up requirements .................................................................................................. 13 Table 4 Comparative study of competitors .............................................................................. 19 Table 6 Personnel planning ...................................................................................................... 23 Table 21 Gantt Chart ................................................................................................................ 38 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  9. 9. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 CHAPTER 1: INTRODUCTION It is a business development proposal, designed for establishing a new venture as an entrepreneur. A new venture needs to have a detailed business proposal plan. This business proposal plan is a prescribed expression of the entrepreneurial vision along with description regarding the operations and strategy of the proposed endeavor. The main advantages of writing a detailed business plan is the offsetting the costs. Business plan enables the top management and executives in the firm to ponder about the business comprehensively, to converse the business objectives to personnel, to include a decision making base and to smooth the progress of the planning (George and Bock, 2012). Also, an entrepreneur needs to accept the business proposal making task enthusiastically. A business plan needs to be tapped by professionals, such as consultants, accountants, and lawyers for their advice and proficiency. Drafting of the plan facilitates the entrepreneurs for considering all key aspects of the proposed business and assures the familiarity with all the details. This aids in decision making regarding the new venture. A sound business proposal also allures good investment (Hamel, 2000). Backed by the advocacy of the entire benefits, this business proposal plan has been drafted. This plan encompasses the proposal for opening a multi-cuisine restaurant in Mongolia. 1.1 Rationale for the Business idea A multi-cuisine restaurant is proposed to be started in Mongolia, an Asian country. Venturing a multi-cuisine restaurant in an underdeveloped country with FDI playing a key role in economy and having a potential tourism destination, is a prolific idea for young and dynamic entrepreneurs. Restaurant business offers a range of services to a culturally diversified customer base. Being a multi-cuisine restaurant, the restaurant will be able to cater the diversified client base with the different cultural food. This restaurant will also incorporate a bar in it (Sharon and Fullen, 2004). It is a new restaurant, which will be based on a totally unique concept for Mongolia. The idea of opening a tourist targeted restaurant has crept in by seeing the aesthetic beauty of Mongolia. Mongolia has emerged as a new tourist destination in last few years because of its geography and historical importance. This location has proven to be an excellent place for a restaurant. This restaurant will serve dual purposes by providing dining for family as well as an area for expensive intimate dining. The menu includes Indonesian, Mexican, Mongolian, Italian and Indian food alternatives both vegetarian and non-vegetarian. A multi-cuisine menu will fascinate tourists along with a unique Mongolian theme based interior. The decor of the
  10. 10. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 Restaurant will be touched by Mongolian handicraft and culture. This unique combination of Mongolian ambiance and multi cultural food is the point of difference for this restaurant (Brown, 2007). 1.2 Scenario Chosen Geographically, Mongolia is locked between Russia and China. The area covered by this country is 1,565,000 sq km., in which 60% populace lives in Ulaanbaatar, the capital. The estimated population of Ulaanbaatar is 950.000. Besides this, there are two other urban centers, Darkhan and Erdenet, where 95,000 and 74,000 inhabitants live. That is why the place for opening this restaurant has been chosen to be Ulaanbaatar. The diverse landscapes ranging from the vast steppes, forested mountains and Gobi desert in Mongolia attracts the tourism (Developmental Biology, 2010). The Mongols had their roots in the 13th century with Chinggis Khaan’s name in the world history. After the death of Chinggis Khaan, the empire was partitioned into number of powerful states. The Mongols, in the late 17th century, came under the rule of Chinese empire. Mongolia got independence in 1921 and then in 1924, a Communist regime was installed. Backed by a peaceful democratic revolution in the country, in 1990 and subsequently in 1992, the ex-Communist Mongolian People's Revolutionary Party or MPRP won the elections, but in the 1996 elections, the Democratic Union Coalition or DUC defeated MPRP. Now, there exists a coalition government formed by MPRP and DUC. This government has been in power till January 2014. Mongolian economic has been based on agriculture and herding. Besides these, Mongolia's widespread mineral deposits have attracted investment from abroad. Copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten are extracted from the land of Mongolia, which justify the major part of FDI (foreign direct investment) and government revenues. Looking into the performance of Mongolia’s economy, it is evident that it stands as a nation with rapid development amongst the transition economies. The annual GDP growth rate in 2004 has been recorded to 10.7%, in 2005 to 6.2% and in 2006 to 8.4%. Mongolia has recorded the 2nd highest per capita GNI i.e. 1051 USD in 2006 and at the same time the lowest inflation rate. The most important contributors in GDP of Mongolia have been the Wholesale and retail trade dragging agriculture to the 2nd place and mining and manufacturing at 3rd . The growth average, within 2004-08 period, has been nearly 9% per year largely as a result of high copper prices and new gold production. But the existence or soaring inflation in 2008 and the This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  11. 11. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 effects of the global financial crisis, resulted in a trade off for commodity prices and inflation. This has also reduced the government revenues (Mongolia - The Economy, n.d). In 2009, the country has started moving out of the crisis. In October 2009, the long- awaited legislation has been passed on an investment agreement for developing Mongolia's Oyu Tolgoi mine, one of the world's biggest unexploited copper mine. This has resulted in an estimated growth of 7% in 2010. Transfer of funds from Mongolians working abroad are considerably large, but have dropped as a result of the economic crisis. Money laundering is a serious concern in Mongolia. Mongolia is a member of the World Trade Organization since 1997 and looks for expanding participation in the provincial economic and trade regimes (Mongolia: economy statistics and industry reports, 2011). Tourism industry of Mongolia has enjoyed speedy development in the last 15 years. The tourism base in Mongolia is its pristine nature, diverse fauna and flora, unpolluted water, fresh air, unique culture and itinerant life style. Mongolia is a new and unique travel as well as business destination offering a great diversity of untouched options (Ministry of Road, Transport and Tourism, n.d). Ulaanbaatar is the capital of the country. All of the regulations in the country are done from here only. Besides, it is also at the proximity to the international airport, which makes it the first and last tourist destination in the country. Opening up a theme based restaurant in Ulaanbaatar is a potential business proposal (Street map of Ulaanbaatar, capital city of Mongolia, 2003). 1.3 Aims and objectives of the work Aim of the current work is to provide a foundation for a business plan incorporating a multi-cuisine restaurant in Mongolia. This work has been carried out considering an entrepreneurial approach for the business. All the aspects of the business development and operations will be analyzed deeply. This is to provide a detailed business plan by defining all the functional areas (Linder and Cantrell, 2000). After accomplishing this report following aims could be met: 1. A detailed portrait of the Mongolian economy and business environment can be assessed. 2. Assessment of restaurant business in Mongolia. 3. Demonstration of the method of developing a business plan. 4. Preparation of a business plan for opening up a restaurant in Mongolia.
  12. 12. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 1.4 Structure of the work This work has been segregated into 5 chapters. These are named as Introduction, The Business Concept, Feasibility, Strategic Analysis and Business Model and finally the Business Plan (McKeever, 2012). Chapter one is of introductory chapter. Rationale for the Business idea, Scenario Chosen, Aims and objectives of the work and Structure of the work will be defined here. This chapter acquaints the reader with the background of the study. Here the aims and objectives of the study and a detailed synopsis of the entire report’s structure will be disclosed. Beginning of the chapter sketches the pertaining business process, client base, situation, working etc at the proposed restaurant. In the last section, backed by the entire above study, a detailed and finalized business plan will be written. This plan will offer an overall assessment of Business Development Proposal, schedule of Business Plan and discussion of critical success/ failure factors for the business. This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  13. 13. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 CHAPTER 2: THE BUSINESS CONCEPT Business Concept of any business proposal outlines what the business exactly will do and how it will provide value to all its constituents. It supplies base for all the follow on activities. It is one of the essential artifacts of a business plan. It articulates the vision mission, business model, product/service etc. The target audiences, the product features and the unique business value, all will be defined here in this section. Business Concept also covers definitions of strategies for implementing the business proposal, including pricing, revenue, and distribution models. 2.1 Description of the business idea This business proposal is about a multi-cuisine restaurant, which will be started in Mongolia. Name of the restaurant will be Aмттай: Food for choosers. Амттай is a Mongolian word, which means yummy or delicious in English. This prolific business will offer a range of services to the culturally diversified targeted customer base. Basically, by being a multi-cuisine restaurant, it will be catering cultural specific requirements of the diversified tourist with the different cultural food at a single place. A bar will also be established there in it. This new restaurant, based on a totally unique concept for Mongolia, will offer all these services to its customers in a Mongolian ambiance. It will be serving both family and expensive intimate dining requirements of its clients. The menu will include Indonesian, Mexican, Mongolian, Italian and Indian food alternatives both for vegetarian and non- vegetarian consumers. The decor of the Restaurant will be touched by Mongolian handicraft and culture. This unique combination of Mongolian ambiance and multi cultural food is the point of difference for this restaurant. This restaurant will be opened at Ulaanbaatar, the capital city of the country, so as it could drag attention of its targeted customers. 2.2 Mission Mission of Aмттай is to offer delicious and remarkable food and drinks to the coming tourists from different parts of the globe. The food and drink should meet the highest standards of superiority, freshness and seasonality combining both creative and customary styles of cooking. Providing the customers an impeccable service through warmth, civility, effectiveness, acquaintance and professionalism is one of the aims, Aмттай strives for. Friendly, cooperative and rewarding environment should be offered to the employees so as to encourage long-term, pleasing, growth oriented work environment. Aмттай aims to be a
  14. 14. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 benevolent member of the Mongolian community and improve the quality of life in the region. 2.3 Vision The vision statement of Aмттай is as follows: “Aмттай intends to become the first choice for multi-cuisine test seekers in Mongolia among the different origin tourists.” 2.4 Menu This huge menu will demand chefs from different regions and ingredients specific to the cuisine. The food products used will be fresh and of the premium quality, prepared with compassion and care. Along with the tasteful food options, customers will also be able to enjoy wine and other drinks of their preferences. The drink list will be modest in size and chiefly focused on the wines from Italy. A moderate international beer selection will also be featured in the restaurant. The calm softly lit bar features a complete assortment of the finest Vodkas, This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  15. 15. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 homemade Italian aperitifs and digestives (like Lemon cello) and single malt Scotches as well as all of the other favorites. In summers, customers will also be offered a choice to sit outside on the terrace or garden sitting arrangements and enjoy special summer menus, exotic drinks and other non- alcoholic offerings. At the terrace or the garden, some cultural activities of Mongolia will be organized for making the food much special for the customers. Restaurant will be open 7 days a week. 2.5 The Ambience Interior of the Aмттай will be totally based on the Mongolian theme. Basically Mongolian culture is a nomadic based culture and similar to any other nomadic culture, it is popular for its hospitality. So as on arrival of any guest, guest will be treated with traditional offerings such as dairy products in the summer session and meat in the winters. They live in ger. The ger is made up of wood and leather thongs, which are covered with cloths, is the home of the Mongolian itinerant. In the same way, Aмттай will be arranged in gers for sitting arrangements and the interior décor will be done with Mongolian traditional portraits. A soft light would be placed inside each ger. Entire Aмттай will be organized as a bigger ger and many small gers will be there for offering sitting arrangements to the customers. Figure 1 Table arrangements in the Aмттай
  16. 16. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 When a customer walks into Aмттай, he will feel the, musical Khoomi singing (throat singing) and the playing of the Morin Huur or Horse Head fiddle (traditional musical styles of Mongolia). Contrasting to many other restaurants, Aмттай will go with excellent decorating, ambience. Consistency of quality and service will be provided so as to develop a sense of assurance in the customers. The management and servers will handle every detail to make the customer's special evening even more special. All this and our great atmosphere will make customers want to come back again and again. This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  17. 17. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 Figure 3 Mongolian Hospitality style and clothing 2.6 Positioning Through positioning, marketers attempt to give an image or more specifically an identity to the product or services, which resides in the minds of their target customer population. Positioning matters a lot for a new brand as it will decide how the customers will perceive it. According to Kottler, Marketing is nothing but war of positioning. Thus, Aмттай will need a strong positioning to stand on its feet in the highly competition prone restaurant industry of Mongolia. Aмттай will position itself as the place for enjoying Mongolian culture without sacrificing the taste preferences. 2.7 Scale and growth anticipation Aмттай is targeting the tourists coming to the country for its services so the scale of the business and its growth anticipations will be highly dependent on the tourism scenario in the country. According to the available statistics of the tourism industry, in 2005, 338 000 arrivals from divers regions have been recorded. This has generated an aggregate income of 201 million USD in 2005. There has been an average increase of 15 to 20% per year in the number of tourists coming to Mongolia. If this rate of growth continues, the anticipated growth rate of the proposed restaurant will also be the same. Taking a conservative perspective, we take a growth rate of 15% per year. Aмттай’s estimated scale of service is 20% of the total coming tourist in Mongolia once in a while during their stay in the country (Ministry of Road, Transport and Tourism. n.d). Thus the expected scale of the restaurant can be derived as shown in the below table:
  18. 18. This is a sample document owned by http://www.globalassignmenthelp.com/ Table 1 Estimation of customer foot fall at Aмттай Year Growth factor (15% per year) Expected tourists in Mongolia Estimated customers for Aмттай Average per day visiting customers 2013 3.059 1033942 206788 567 2014 3.518 1189084 237817 652 2015 4.046 1367548 273510 749 2016 4.652 1572376 314475 862 The key founder of the company is Mr. X. He will work as the manager managing the entire restaurant from kitchen to personnel, accounts, algorithms, and computerized functions. He will take care of the service standards and food quality plus financial issues of the restaurant. Mr. A will be the Restaurant’s head chef, and will manage the entire cooking section and assure the food quality. Mr. B will be assigned the overall responsibility of the Bar section. For catering the estimated customer visits, a proper floor will be required. As the sitting arrangements are to be done in the form of traditional Mongolian gers, the floor of the restaurant must be an open place. A terrace or a garden will suit the requirement. Total forty tables, twenty in ger and rest twenty is the open floor will be placed. On each table, minimum four persons could sit and eat comfortably (Mongolia's housing market recovering, 2011). The This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  19. 19. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 space required for each table is 4 sqm. Thus the total floor area required for the restaurant can be derived as follows: Floor required for the restaurant = floor required for each table * number of tables + floor required for kitchen area + floor required for administration and other facility area + Area for bar Here, Floor required for each table = 4 sqm Number of tables = 40 Floor required for kitchen area = 30 sqm Floor required for administration and other facility area = 10 sqm Area for bar = 20 sqm  Floor required for the restaurant = 4*40+30+10+20  = 220 sqm Restaurant floor construction will start on November 1, 2012 and open it in January, 2013. An investor for financing the start up of the restaurant is required now. The start-up cost for the venture will be mostly expensed for equipments, furniture, paintings, rent, reconstruction, start-up personnel, liquor license, legal and consulting costs and six months operating cash etc. These are the requirements for starting up of Aмттай to the best of our knowledge and experience of the industry. Cost notes for a number of items have been specified in the below notes:  Stationery, Menus and Guest Checks The exact cost can be calculated for these items from day-to-day experience and a market research. Stationery includes invoices, letterhead, envelopes, catering and event contracts etc. Stationery will be in a very simple format with the Aмттай’s logo on it. Many of the above items can be designed and produced in-house, which will be done by the restaurant admin in-charge. This will save thousands of bucks. The menu will also be designed, developed and revised internally to further save funds. Final printing will be outsourced.  Rent, or lease payments The floor for opening up a restaurant in any centralized location must be rented or leased. We need a place for 250 sqm. The rent rate in Ulaanbaatar is about $17<$18/sqm per month, whereas the land purchase prices are extremely attractive lying in the range
  20. 20. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 of $900/sqm to $1300/sqm. Initially the floor will be hired on rent but later on this can be purchased (Temple View Residence Ulaanbaatar Mongolia. n.d).  Office Supplies and General Set-up All kind of general usage items such as staplers, pens, paper cutter, paper, pads and pencils, shredder and file cabinets for the waiter and host station, kitchen and office are included in this list.  Restaurant Building and ambience With the assistance of a Mongolian ger master, 20 small sized gers with 3 walls will be designed for the restaurant. The average cost for which will be $875 each (Dealing with Construction Permits in Mongolia, 2012). Besides these, 20 sets of Mongolian style furniture will be purchased from any traditional furniture supplier (Cost of Living in Ulaanbaatar, Mongolia. 2012). This furniture and other fixture work will be done by service contract with any furniture maker in Ulaanbaatar. This estimated cost of the work is $4000. This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  21. 21. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 Figure 4 Mongolian traditional art  Start-up employee Cost for initial four Months Service staff will be assigned above the average monthly salary in Mongolia i.e. $500 per month. Salaries for the cooking staff will be $1000 per month and the head chef and chef’s salary will range in between $2000 to $3000 per year.  Liquor licensing As per the law and regulations lay down by the Office of Liquor Control and the Los Santos Government application fee for liquor license in Mongolia is $20,000 and once the liquor license has been granted, a $10,000 monthly renewal fee has to be deposited on monthly basis (Taifun, 2012).  Computers, Printers and Fax Setup Microsoft XP Professional will be the guiding force behind all of the hardware related choices. Table: Start-up Table 3 Start-up requirements Start-up Requirements Estimated cost Start-up Expenses Stationery, Menus, Guest Checks $4,000
  22. 22. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 Printing of Menus $200 Property $18,000 Office Supplies & General Set-up $2,000 Serving Staff Theme Uniforms $3,000 Kitchen Staff Uniforms $3,000 Restaurant Building and ambience $21,500 Liquor License (coming 4 months) $60,000 Computer and computer Software $4,000 Chamber of Commerce/Other Memberships $2,000 Initial Job Hiring Related Advertising $1,000 Initial, Kick-start, Teaser Advertising $5,000 Phone, Electric, Cable and Gas Deposits $5,000 Food and Liquor Setup $8,000 Kitchen Supplies $4,000 Opening Celebration $5,000 Exterior and Interior Signage $1,500 Start-up employee Cost for initial four Months $96,000 Expense Account for Food, Fuel, Bills $2,300 Pre-funding Costs to Fluno Gorgonzola $3,400 printer cum copy Machine (Canon) $800 Fire and Burglar Alarm Installation $5,000 Milestones/Contingency/Other $20,000 Commercial Pre-Inspection of Building $800 Total Start-up Expenses $275,500 Start-up Assets Cash Required $50,000 Start-up Inventory $25,000 Other Current Assets $0 Long-term Assets $0 Total Assets $75,000 Total Requirements $350,500 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  23. 23. This is a sample document owned by http://www.globalassignmenthelp.com/ Email: help@globalassignmenthelp.com, Phone: (UK) +44 203 3555 345 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 Amount $ Total Start-up Expenses Total Assets
  24. 24. Page 16 CHAPTER 3: FEASIBILITY ANALYSIS Setting up a business is headed by the verdict to desire an entrepreneurial career and recognition of a promising business idea backed by a careful examination of the existence of entrepreneurial opportunities. Idea generation is not enough but the business idea should also be feasible from techno-economic, legal and financial perspectives. So after the initial screening of the prima facie promising idea, an in-depth examination for feasibility must be carried out prior to set the one where time, money and energies will be exerted. Feasibility study backs by a detailed primary and secondary market research (Rogoff, 2007). 3.1 Primary Market research Primary research is based on the principles of scientific methods. This theory of investigation has been developed by John Stuart Mill in the mid nineteenth century and discussed this in the book “Philosophy of the Scientific Methods”. There are three methods to conduct a primary research, such as observations, interviews and surveys. Here, for convenience and ease, interview method has been adopted. This is an online interview method conducted through a blog designed for the visitors of Mongolia. This is a well structured interview, where a previously set bunch of questions are asked to the visitors of to the blog and asked for their opinions. In this blog, description of different natural and This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  25. 25. Page 17 heritage sights of Mongolia are discussed with different viewpoints. Visitors the blog are asked to provide their opinions about the concept of Aмттай. Also they can share their experiences during their visits to Mongolia and their food experiences along with suggestions to improve the services. In this interview both past visitors and the potential visitors are addressed. This research has been carried out in a time frame of three months. Almost, 1000 interviews have been collect from the tourists from different region of the world. Interview questionnaire is attached in the appendix section. Observations for the interviews are briefed as below: 1. Majority of the visitors are so allured by the aesthetic nature and awful culture of Mongolia that they wish to be there again and refer this place to their friends and families. According to them the place is full of energy as pollution is not much, besides this, it is an affordable place for the low budget tour plans. Terroristic activities are also not there, which adds to its beauty. 2. The most fascinating thing at Mongolia was its natural heritage and monuments. Colorful and beautiful culture also attracts the individual tourists. Many of the respondents said that the place is a single destination with lots of natural facets in it. 3. Talking about their food experiences, 80% of individuals said that the food was the key issue there. Everything was good but the taste and cuisine preferred was not available with the Mongolian ambience. They have missed the taste of their preferred cuisines in Mongolia. Also, while having food, the main issue was of language. In majority of the places, menus were even in Mongolian script, which made the things much difficult. The hospitality was very warm and comfortable but a weeklong trip made them feel home seek especially in terms of the home like place to enjoy the food of choice. 4. The most preferred cuisines among the respondents are three. These are Italian, Mongolian and Indian. Further, some of the respondents have also shown interest in the Indonesian and Mexican food. 5. According to the collected response, 72% respondents said that the average spent per head for food in Mongolia was £25~£30. 18% said that their average spent on food in Mongolia was over £30 and rest responses advocates the other options. 6. Making payment was a tedious task for the 70% tourists as majority of the food places were not accepting the debit cards. Just for that, they had to take help of the currency converters. 7. Idea of opening a new restaurant in Ulaanbaatar with features of multi-cuisine in the Mongolian cultural ambience plus availability of liquor from different region in the bar
  26. 26. Page 18 section with facility of payments through debit cards has attracted the interest of 90% respondents. They have appreciated this idea. 3.2 Secondary Market Research Secondary market research employs information assembled by outside sources such, as government agencies, trade and industry associations, media sources, labor unions, chambers of commerce, and many others. Secondary sources of information include the following:  Commercial sources  Public sources  Educational institutions 3.1.1 Product/service First and the foremost thing in the feasibility analysis are to analyze the viability of the business idea or the product or service, the business is aspiring to offer to its clients. In the service feasibility test following questions should be answered for refining the business idea: Is the proposed business address to any specified need in the marketplace? Does the proposed business sound profitable? Does the business proposal have the capacity to face the competition in the market? This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  27. 27. Page 19 All the above stated questions can be answered through the observations of the primary research. Primary research provides the buyer’s opinion regarding the proposed business and their willingness to accept such service in the market. According to the primary research conducted by the structured interview, the potential customer reference group or the past visitors of Mongolia have appreciated the idea of the restaurant. Their positive response to the idea of restaurant advocates the market viability. Thus from the customer point, restaurant Aмттай is a good and attractive proposal, which assures that the business will be profitable as a considerable demand of such a restaurant exists in the Mongolian restaurant industry (City Guide - Ulaanbaatar – Restaurants. 2012). Looking into the competition structure in the Mongolian restaurant industry gives the proposal’s viability from the market competition perspective. Ulaanbaatar is crammed with good restaurants, which over and over again surprises the first time visitors to Mongolia. Every as well as any sort of food from any cuisine is available here, including Indian to Korean, Japanese and American food varieties. Every week, new venues open while others close (The Abilities Fund. 2012). It is really a dynamic city for food business. Ulaanbaatar is always re- inventing itself as a regional cooking capital. The most famous and preferred food destinations in the city for outsiders are Namaste, Hazara, Luna Blanca, Millie's Café, The Bull and Sakura Restaurant etc. All the above described restaurants are the highest ranked restaurants by the tourists at the website http://www.tripadvisor.com/Restaurants-g293956-Ulaanbaatar.html. On the basis of the reviews from the website, the competitor structure has been designed. For testing the viability of the proposed restaurant plan, tabulation method will be of much use (MAD Investment Solution, 2012). Table indicating the different competitors and their market performance is as under: Table 4 Comparative study of competitors Name of restauran t Cuisine Interior Theme Servic e Foo d Venu e Ambienc e Prices range Namaste Indian Indian Ambienc e 4 4 4 3 $6 - $10 Reasonabl e Hazara Indian Romanti c ambiance 4.5 4.5 3.5 4 $10 - $15 Luna Blanca Asian, Western and 4.5 4.5 5 4.5 $3 - $15
  28. 28. Page 20 Mongolian cuisine Millie's Café American, European, Mexican, Internationa l 4.5 4.5 4 4 The Bull Asian 4 4 4 4 Sakura Restaurant Japanese 5 5 5 5 3.1.2 Economy, Industry and Place Attractiveness of economy Mongolian economy is not merely a country with hope, but a country with a very remarkable economical trail record of recent. Average GDP growth in the country is over 7% since 2002 (IMF report, 2007), and according to the latest official data about 2006 GDP the growth has been recorded 7.5%. It is a good sign for any underdeveloped economy. Inflation in Mongolia is very low and steady at -0.1% as per the records of 2007 beginning (IMF report, 2007) and is This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  29. 29. Page 21 expected to be at 4.2% for the coming year (Bank of Mongolia, 2007). The economy is overwhelmed with high levels of FDI investment, an open and progressive government, lofty education standards and availability of various schemes and incentives for entrepreneurialism. The unemployment issues are pleasingly low i.e. just 3.3% in 2005 (World fact-book, 2006). Figure 6 Growth representation for Mongolian GDP (Hallberg, R., 2012) Mongolia has been a member of the World Trade Organisation since 1997 and open for cross country trade with 78 countries around the world since then. It has as well been a full member of MIGA (Multilateral Investment Guarantee Agency) of the World Bank Group since 1999. Besides, it also has a Mutual Protection of Investment agreement with thirty one countries plus an Exemption on Double Taxation agreements with 19 countries (Japan Mongolia Business Workshops, 2012). The key industry sectors in Mongolia are as follows: Mining Industry – Mongolia has extensive deposits of minerals. Major part of the mining production is made up of Cooper, coal, molybdenum, tin, tungsten and gold. The high growth of GDP is mainly as a result of higher copper prices and new gold production in the country. 23% of GDP is formed by this sector. Service Industry– 50.4% of the GDP is the result of this industry and it is growing continuously. Science & Technology – Technology industry of Mongolia has been increasingly developing since the democratic revolution in the country taken place in the early 1990s. Since
  30. 30. Page 22 then many new technology firms have founded their operations in the country (Doing Business Guide in Mongolia, 2012). Attractiveness of industry and market Service industry comprises of financial services, hospitality and tourism industry and other services. Economist in the country is estimating high growth in this sector in the coming years. This positive growth of the country’s overall economy and the hospitality and tourism industry are the positive factors for the proposed business line (Mongolia looks to tourism to diversify its economy, 2012). Restaurant is expected to be open in Ulaanbaatar, so the importance of the city in the overall economy both from economic as well as from tourism 3.1.3 Organizational Feasibility Organizational Feasibility analysis’s main purpose is to determine if there exist sufficient skills and resources to bring service to market successfully. This involves analysis of non-financial factors important for the business. Here, 2 primary issues to be considered are the management competence and sufficiency of resources. For assessing the former issue, the ability of the management team must be evaluated on the basis of the passion and expertise for the launch of the new venture. Further to assess the availability of resources needed to launch the proposed venture, focus must be on the nonfinancial resources such as the availability of This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  31. 31. Page 23 affordable floor, possibility of government support, workforce pooling quality, acquaintance of the key suppliers, customers, and competitors etc. To test the resource sufficiency, critical nonfinancial resources must be listed to move idea ahead and if the resources are not sufficiently available, idea should be re-worked. If this estimated customer arrival continues, then for providing the aspired service quality to the visitors, a well versed staff will be required. Staff description is as follows: Table 5 Personnel planning Staff name Number of persons required Head Chef 1 (expert of the proposed menu cuisines) Chef 5 (experts of each cuisine) Assistant cooks 5 Waiters 10 Reception and counter staff 1 Manager 1 Founder of the company i.e. Mr. X, and two other i.e. Mr. A and Mr. B are the faces of the Aмттай. The initial management team will highly depend on their expertise and industry receptiveness. Main management responsibilities will be divided between the top three. While all 3 need to focus mainly on the quality of proficiency, but one must take eventual responsibility of administration, finance and marketing, while the other one of personnel and property and the remaining one for food service and bar services. With the growth of the firm, an additional consulting assistance can also be obtained for graphic, editorial, sales, and marketing issues. If the decisions made for the firm are guided by the company mission and vision statement, the management will not face problems and the success of the firm is certain. Rest of the staff will be recruited from Ulaanbaatar through a public notice for recruitment in the local dailies. Tasks must be assigned to the staff on the basis of their creativity, knowledge, and social abilities. Each member of the Aмттай team is highly valued for it, opinions from each are respected equally as this team will make the business excel. People committed to high standards of excellence will be employed, who blossom on a team atmosphere and have exceptional customer service skills. This idealism is represented by the current staff, and will continue to be the guideline by which new team members are hired.
  32. 32. Page 24 3.1.4 Financial Feasibility Financial feasibility analysis gives a conceptual expression of the business proposal’s ability to seek fund. The financial feasibility is the last element of feasibility analysis. This gives financial merits of the proposed business. This financial plan is based on raising roughly $300,000 through short term loans and $50,500 will come from the owner’s pocket. Profitability depends on the nature of growth. Start-up Funding The start-up capital will come from owner’s fund and short-term loans. The cost of financing is to be financed from owner’s investment. The total fund requirements for start- up are listed in the below table. Table 6 Start-up Funding Capital Planned Investment Owner Equity $50,500 Short term loan $300,000 Additional Investment Requirement $0 Total Planned Investment $350,500 Loss at Start-up (Start-up Expenses) ($275,500) Total Capital $75,000 Total Capital and Liabilities $75,000 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  33. 33. Page 25 Total Funding $350,500 Key Assumptions Entire financial plan is dependent on some important assumptions, majority of which are revealed in the below table. The underlying key assumptions are:  A high-growth economy, exclusive of major recession impact has been assumed in Mongolia. It is assumed that the opening ceremony of Aмттай will be held in the first week of January 2013 and the average per day traffic will be 567 individual.  There does not exist unforeseen changes in the anticipation about the popularity of Aмттай.  Accesses to both investments and financing requirements for the proposed business plan are available with certainty. General financial and investment availability assumptions for the plan are as shown in the tables.  Meal for 2, in any Mid-range Restaurant with Three courses cost to the customers in the range of $20 to $30. The average cost per head is assumed to be $15 per meal.  Alcohol cost per head is assumed to be $15.  It is assumed that the gross profit margin of restaurant industry of Mongolia is 30%.  Liquor section works for 40% profit margin (Happy Mongolia, 2012). Table 7 General Assumptions General Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Plan Month 1 2 3 4 5 Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% Annual inflation rate 4% 4% 4% 4% 4% Sales forecast for the restaurant is dependent on the popularity of the restaurant concept between the tourists and tour agencies. The expected tourists visit is briefed in the below table: Table 8 Customer visit for caste Year Estimated customers for Aмттай Estimated customers in the liquor section 2013 206788 41357 2014 237817 47563 2015 273510 54702 2016 314475 62895
  34. 34. Page 26 It is assumed that the customers in the bar section are just 20% of the total arrivals in the restaurant. Estimation of sales revenue from both restaurant and bar sections for Aмттай is shown in the below table: Table 9 Projected revenue Year 2013 2014 2015 2016 Food section revenue Estimated customers for Aмттай per year 206788 237817 273510 314475 Revenue per head 15 16.5 18 20 Total revenue 3101820 3923981 4923180 6289500 Liquor section revenue Year order Aмттай year food) 2013 9 41357 372213 2543487 2014 9.5 47563 451849 3048810 2015 10 54702 547020 3654094 2016 10.5 62895 660398 4374347 Sales forecast: Sales forecast for the coming four years is as given in the below table: Table 12 Sales forecast for coming four years (a) SALES FORECAST Year 0 1 2 3 4 Units 248,146 285,380 328,212 377,370 Sales Value @£1000/unit 3,722,190 4,708,770 5,957,048 7,534,192 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  35. 35. Page 27 Sales policy Cash flow on Sales 3,722,190 4,708,770 5,957,048 7,534,192 (b) Cost of goods 0 2,543,487 3,048,810 3,654,094 4,374,347 Supplier payment policy Cash flow on cost of goods 0 2,543,487 3,048,810 3,654,094 4,374,347 Cash Flow for the project: Table 13 Cash flow for project (2) CASHFLOW FORECAST Preop Year 0 1 2 3 4 CASH INFLOWS Cash from Sales 3,722,190 4,708,770 5,957,048 7,534,192 Directors loans 300,000 Share capital 50,500 0 Other external finance/loans Other cash inflows TOTAL CASH INFLOW 350,500 3,722,190 4,708,770 5,957,048 7,534,192 CASH OUTFLOWS Payments for materials 0 2,543,487 3,048,810 3,654,094 4,374,347 operating expenses Premises (rent, rates) 9,000 54,000 59,400 65,340 71,874 Wages and salaries 0 288,000 331,200 380,880 438,012 General expenses 0 91,350 117,480 110,214 121,434 Interest and bank charges payable 0 30,000 30,000 20,000 10,000 Lease payments 0 0 0 0 0 Corporation Tax 420,733 431,092 Market survey costs 10,000 Other preliminary expenses 140,000 capital expenditure Plant and other capital expenditure 21,500 financing repayments Loan repayments 0 100,000 100,000 100,000 Dividends 0 0 0 0 TOTAL CASH OUTFLOWS 180,500 3,006,837 3,686,890 4,751,261 5,546,759 Cash flow summary NET CASHFLOW FOR PERIOD 170,000 715,353 1,021,880 1,205,787 1,987,433 OPENING CASH BALANCE 0 170,000 885,353 1,907,233 3,113,020
  36. 36. Page 28 CLOSING CASH BALANCE 170,000 885,353 1,907,233 3,113,020 5,100,452 Projected Profit and Loss It is a financial statement, which summarizes the sales revenues, costs of goods and expenses incurred in the business during the specific time period usually a quarter or year. It gives information about the ability of the business to generate profit by improvising revenue and curtailing costs. It is also known as a statement of profit and loss, an income statement or an income and expense statement (Levine and Michele, 2008). Profit and Loss statement has been prepared following a conservative point-of-view General expenses 91,350 117,480 110,214 121,434 Interest and bank charges payable 30,000 30,000 20,000 10,000 Lease payments 0 0 0 0 Depreciation 2150 2150 2150 2150 Other expenses 150,000 Total expenses/overheads 9,000 615,500 540,230 578,584 643,470 Profit before tax - 9,000 563,203 1,119,73 0 1,724,37 0 2,516,37 5 Tax @25% 420,733 431,092 629,094 Profit after tax 563,203 698,997 1,293,27 7 1,887,28 1 Dividends 0 0 0 0 Transfer to reserves 563,203 698,997 1,293,27 7 1,887,28 1 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  37. 37. Page 29 Projected Balance Sheet Table 15 Projected Balance sheet (5) BALANCE SHEET Year 0 1 2 3 4 ASSETS Fixed Assets Building 0 0 0 0 0 Furniture 21,500 19,350 17,200 15,050 12,900 Vehicles 0 0 0 0 0 Plant & machinery 0 0 0 0 0 Net Fixed assets 21,500 19,350 17,200 15,050 12,900 Current Assets Stock 211,95 7 254,068 304,508 364,529 0 Debtors 0 310,183 392,398 496,421 627,849 Cash 170,00 0 885,353 1,907,23 3 3,113,02 0 5,100,45 2 other - Rent 9,000 54,000 59,400 65,340 71,874 Market survey costs 10,000 other preliminary expenses 140,00 0 subtotal 540,95 7 1,503,60 3 2,663,53 8 4,039,30 9 5,800,17 5 Current Liabilities Taxation 420,733 431,092 629,094 subtotal 0 0 420,733 431,092 629,094 Total assets less current liabilities 562,45 7 1,522,95 3 2,260,00 5 3,623,26 7 5,183,98 2 LIABILITIES Share cap 50,500 50,500 50,500 50,500 50,500 Reserves 563,203 1,262,20 0 2,555,47 7 4,442,75 8 Total equity 50,500 613,703 1,312,70 0 2,605,97 7 4,493,25 8 Loans 300,00 0 300,000 200,000 100,000 0 Total 350,50 0 913,703 1,512,70 0 2,705,97 7 4,493,25 8 Break-even Analysis It is a calculation of the sales volume necessary for covering costs. A lower sales volume than the calculated break-even point would be unprofitable whereas a higher one would
  38. 38. Page 30 guarantee the profitability of the business. This analysis primarily focuses on the existing relationship between, the fixed cost, variable cost and selling price. Sales volume, at which the company breaks even, profits are $0 (Fast4cast, 2012). This point is called the break-even point. Break-even awareness facilitates any restaurant operators to know the possibility for the restaurant to be profitable by just knowing the weekly or monthly sales volumes. This can be calculated by the following formula: Break Even Point = Fixed Costs / (selling price − variable costs) Here the fixed cost will comprise of following elements: This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  39. 39. Page 31 Figure 7 Break Even Analysis BEP i.e. break-even point for the proposed business is below the estimated sales volume level, which males the venture attractive for investment. Pay Back Period Pay back period is a financial evaluation technique. By payback period, the meaning is that the time period required for any project to pay the initial investment back. It is non discounted technique (Dayananda et al, 2002). Here in our proposed plan, $350,500 is required as the start-up fund. This fund will be recovered through the business’ net profit. Calculation for the pay-back period for the restaurant project in shown in the below table: Table 17 Payback period analysis Year Net profit Cumulative net profit 2013 $25,438 $25,438 2014 $143,258 $168,696 2015 $460,848 $629,544 2016 $879,710 $1,509,254 From the above table it is clear that the initial investment will be repaid by the business in the third year of commencement. If a linear distribution of profit is assumed, then the exact pay-back period will be calculated as follows: Pay-back period = 2+ (350500-168696)/460848 = 2.4 years or 2 years and 5 months
  40. 40. Page 32 Pay back period of the employed capital investment is relatively low, which implies the attractiveness of the venture among the investors. 3.4 Resource requirement Evaluation Any physical or virtual entity with limited availability, such as supply of money, materials, staff and other assets required for venturing any business are termed as resources. For Aмттай, six broad types of resources are required. All of which are defined in the below section: This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  41. 41. Page 33 CHAPTER 4: STRATEGIC ANALYSIS AND BUSINESS MODEL Strategic analysis aims to look at the external environment of the organization concerning about the present and the future consequences. Through the strategic analysis two questions must be answered, like:  How the external incidences happening might affect the business?  What should be the best response of the business to the likely changes? While, the business model is the manager’s logic, which allows a venture to capture the market opportunity by mitigating risks. This also aids in identifying the required resource set; and create value for investors and founders. Here, a thorough analysis of the business idea from the strategic view will be carried out and based on this a proper business model will be developed. 4.1 Strategic analysis of Business Idea Restaurant opening seems to be a glamorous business and by being successful restaurateurs, one can attain fame and fortune both, but success in restaurant business is not easy to attain and failures are not rare. Prior to opening a restaurant, one must gain the basic understanding of the industry and competition structure. According to the Entrepreneur website (2009), there has been a tremendous growth of about 155,000 to 900,000 in number of food-service from 1970 to 2009. This trend is expected to persist as now people choose to eat out rather than taking time to prepare meals at home. This advocates the idea of opening the right sort of restaurant at the right location. Restaurant is basically a people business, so a socialist must flourish in such type of business. But, the success highly depends on the staff’s especially the servers ability to entertain the customer requirements and strong people skills. Retains of right people is a serious challenge for the restaurant business. Having young staff leads to higher employee turnover issues (What is strategic analysis?, n.d.). Aмттай is a restaurant starting from scratch and for that things must be designed and managed in the owner’s way. This may result in difficulties for establishing the brand and positioning it in the market. Aмттай is a new concept and generally a new concept involves high degree of risk. Besides, restaurants are not easy to operate. One requires having knowledge regarding the proper equipment to purchase and grow to be versed in food-handling measures and local health codes. An extensive market research must be conducted before taking the plunge in order to assess the acceptability of the business concept by the targeted customers.
  42. 42. Page 34 According to a report of Entrepreneur.com (2010), many restaurants fail all through the first year of commencement, largely due to a poor planning. Taking the time to prepare a carefully researched business plan will give you a better chance of success and is essential if you wish to obtain bank financing to get started. Bank finance for starting up funds can be better acquired on the basis of a good and rigorous business plan. 4.2 Value chain and SWOT This value chain and operational competence of the firm result in specific strengths and weaknesses along with external opportunities and threats from the outer circumstances. SWOT analysis of Aмттай is given in the below chart: Table 18 SWOT Analysis Strengths  Innovative business idea Weaknesses This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  43. 43. Page 35  Backed by proper research and planning  Financially viable  Lucrative market growth of the past  Highly dependent of the acceptability of the restaurant among the tourists  Highly dependent on the growth of tourism in the country  Sensitive to the government laws and regulations  Success is dependent on the staff performance Threats  No entry barriers exists, which makes a threat of increasing competition  Business’ Point of difference is its innovative theme and cuisines, which can easily be copied  Government’s dependency on the FDI investment may cause serious damage to tourism  Counties proximity to the terrorist sensitive countries may spoil the business Opportunities  High growth economy  Increasing tourism 4.3 Sources of competitive advantages and sustainability For survival and prosperity of any business in an industry, companies must meet two decisive factors. First, they must deliver customers what they want to buy, and second that they must endure in competition. Overall competitive advantage can be attained through creating difference between offered customer value and cost of creating such customer value as compared to its market peers. Competitive advantage takes 2 forms namely differentiation advantage and cost advantages. Differentiating advantages can be attained by creating the superiority of the service in the customer minds, while cost advantages can be attained through economies of scale. Here, Aмттай is a completely new venture so it is not possible for it to attain cost advantages. Competitive advantaged through differentiation can easily be attained by it as it involves a completely new idea and theme. Aмттай can fare the uniqueness of cuisines offered at a single place with innovative theme and service for differentiation of services in the market place. This may give a higher sustainability to the restaurant. 4.4 Business model Business model for Aмттай will describe the underlying principle of the organization to create, capture and deliver value in terms of economic, social, cultural, or any other forms.
  44. 44. Page 36 Business model construction process is a part of the business strategy (Peterovic and Kittl et al, 2001). It aids in describing and classifying business, plus exploring the possibilities of future development. For a creative management, business model operates like a recipe (Chesbrough and Rosenbloom, 2002). Business model for Aмттай is given in the below section: Table 19 Business Model This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  45. 45. Page 37 CHAPTER 5: BUSINESS PLAN 5.1 Overall assessment of Business Development Proposal Business set-up is headed by the decision for having an entrepreneurial career and recognition of a promising business idea backed by a careful examination of the existence of entrepreneurial opportunities in the selected market. Aмттай is a multi-cuisine restaurant in Ulaanbaatar, the capital of Mongolia. For this restaurant, both primary and secondary research has been conducted. Primary research has given a positive response towards the proposal along with the secondary one. According to the customer response to the proposed idea of business, Aмттай has a positive probability of success in the market among the targeted market. Now looking towards the feasibility of the proposed business plan, every constituent of analysis has given a positive response for it. According to the service viability analysis, it will have good response among the tourists coming to Ulaanbaatar as presently, there is no restaurant, which offers the same cuisines that are the part of our menu. Also, the theme of the restaurant and bar is a unique one, which will certainly attract customers. This result is also proven through the primary research conducted. Now, when the discussion comes to the industry and market attractiveness, both are found to be profitable and growth oriented. Mongolian economy is currently at its growth stage and market for restaurants in Ulaanbaatar is very attractive from the point of investment. Inflation rate is quite low (4%) in the country, which is a good symbol for an entrepreneurial start up. Currently Mongolia has emerged as a new tourist destination and average growth of tourism industry in the country is recorded to be 15 to 20%, which is a good indicator for a tourist targeted business venture. Financial feasibility analysis shows the ability of the venture to repay the initial investments in a very short time period i.e. 2 years and 5 months. Also the growth in profit margin is considerable. Besides all, the initial investment for opening up a restaurant in Ulaanbaatar is comparatively low. The entire analysis has given positive responses making the proposal worthy to get investments. This will prove beneficial for getting the loan from the corporate or the banks for the initial start-up funds. 5.2 Business Plan Schedule Execution of the proposed plan can be segregated into following activities: 1. Arrangement of fund 1 week 2. Obtaining licenses both for restaurant and liquor business 1week
  46. 46. Page 38 3. Finalization of the floor 1 week 4. Building ger 4 weeks 5. Interior 2 weeks 6. Other fixture procurement and installations 1 week 7. Menu designing 2 weeks 8. Printing work 1 week 9. Designing advertisement and promotional activities 4 weeks Menu designing Printing work Designing advertisement and promotional activities Organizing a complementary event for This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  47. 47. Page 39 launch of the restaurant Inauguration of the restaurant 5.3 Discussion of critical Success/failure factors Critical success and failure factors for entrepreneurial success in the restaurant business are very important to be considered as restaurant functions in a complex business environment. This business line is very sensitive and has the highest failure rate among other business start- ups. For flourishing in the restaurant industry, the critical success and failure factors must be taken into consideration by any entrepreneur (Joseph, n.d.). Critical success and failure factors for the proposed business plan are given as below (The Center for Hospitality Research of Cornell University, 2008): Strategic choices Strategic choices like location of the restaurant, business plan, positioning and business concept, target market, competitive strategies (differentiation) and value of firm are critical for the success of the business. This is because; all these decisions or choices define the business nature and characteristics. Decisions regarding these must be backed by a rigorous analysis so as to avoid serious consequences. Competitive factors Competitive factors such as restaurant density or competitive intensity in the market, comprehension of the competitive forces and product relevance plays an important role in any business’ success story. Marketing Basically marketing aims at recognition of demand and satisfying the demand profitably. For this, restaurant must have marketing abilities, good customer relationship and community involvement. Pricing plays a critical role for success so firm must stick to the value delivery concept. Resources and capabilities Firm size, financial capital, profitability, internal controls, organizational culture, efficiency, product quality and consistency, service levels, competence of employees, employee relationships, employee turnover rate etc are the critical factors from the resource and capability perspective. All of the above described critical factors should be taken care of for the success of the proposed restaurant plan.
  48. 48. Page 40 APPENDICES Opinions of you Mongolia tourists! For making your tour more pleasant with a new food house, Aмттай is following you where you go in Mongol. For offering the best menu to satisfy our customers, we need your comments on the questions below. Your help in answering these questions will be highly appreciated! Demographics: Name Country E-mail Tel: This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  49. 49. Page 41 Q. 5. Style of cuisine you prefer (Tick a maximum of three as appropriate) Modern Italian Mongolian Indonesian Mediterranean Japanese British European Thai French Indian German Other (please specify).................................................................................. Q. 6. What has been your normal spending for food at Mongolia? A. £15~£20 per head B. £20~£25 per head C. £25~£30 per head D. Over £30 per head Q. 6. How did you made payment for your food during your trip? Q. 7. A new restaurant is going to be opened in Ulaanbaatar. In this restaurant, customer will be able to enjoy its favorite cuisine in the Mongolian cultural ambience. Besides, one can enjoy liquor of different region in the bar section of the restaurant. Payments can be made through your countries debit cards. What is your opinion regarding this? Q. 8. Do you have any other comments? If so, please state here: Thanks for consideration!
  50. 50. Page 42 REFERENCES Books and Journals Bangs, H. D., 2002. Business Planning Guide. 9th ed. USA: Dearbourn Financial Publications. Chesbrough, H. and Rosenbloom, R. S., 2002 The Role of the Business Model in capturing value from Innovation: Evidence from XEROX Corporation’s Technology Spinoff Companies. Boston, Massachusetts: Harvard Business School. Dayananda, D. et al, 2002. Capital Budgeting: Financial appraisal of investment projects. Cambridge University Press. pp. 150. th Online City Guide - Ulaanbaatar – Restaurants. 2012. [Online] Available at: <http://www.mad- mongolia.com/category/ulaanbaatar-city-guide/restaurants-nightlife/restaurants/> [Accessed 21st October 2012]. Conducting a Feasibility Analysis and Crafting a Winning Business Plan. n.d. [Online] Available at: <http://www.prenhall.com/behindthebook/0132294389/pdf/Zimmerer_CH04.pdf>. [Accessed 22nd October 2012]. This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  51. 51. Page 43 Cost of Living in Ulaanbaatar, Mongolia. 2012. [Online] Available at:<http://www.numbeo.com/cost-of- living/city_result.jsp?country=Mongolia&city=Ulaanbaatar> [Accessed 22nd October 2012]. Dealing with Construction Permits in Mongolia. 2012. The World Bank, [Online] Available at: <http://www.doingbusiness.org/data/exploreeconomies/mongolia/dealing-with- construction-permits/>. [Accessed 20th October 2012]. Developmental Biology. 2010. Ulaanbaatar foundation, [pdf] 28 th March. Available at: <http://ulanbatorfoundation.org/UBF/CaMMP%20Program%20News_files/Hospital_ Proposal.pdf>. [Accessed 22nd October 2012]. Doing Business Guide in Mongolia. 2012. [pdf] Available at: <http://www.pwc.com/en_MN/mn/publication/assets/doing-business-in- mongolia.pdf>. [Accessed 25th October 2012]. Fast4cast, 2012. Break Even analysis. [Online] Available at:<http://www.3s4.org.uk/looking- out/what-is-strategic-analysis> [Accessed 22nd October 2012]. Gantt chart: planning and scheduling. n.d. [Online]. Available at: < http://www.ganttchart.in/>. [Accessed on 20th July 2012]. GanttPoject. 2011. [Online] Available at: <http://www.ganttproject.biz/>. [Accessed on 10th October 2012]. Griffin, C., and Hammis, D., n.d. Assistance not Assessment: Getting at the Heart of Small Business Feasibility. [pdf] Available at: <http://www.griffinhammis.com/publications/Assistance_not_Assessment.pdf>. [Accessed 20th October 2012]. Hallberg, R., 2012. Invest in Mongolia – The New Wild West Of Investing. [Online] Available at:< http://www.contrarian-investor.com/invest-in-mongolia.html> [Assessed on 29th Oct, 2012]. Happy Mongolia, 2012. Yurt for Sale. [Online] Available at:<http://www.happymongolia.net/ger-export.html> [Accessed 22nd October 2012]. Japan Mongolia Business Workshops. 2012. The Business Council, [Online] Available at: <http://www.bcmongolia.org/bcm-news>. [Accessed 24th October 2012]. Joseph, C. n.d. Pros & Cons of Opening a Restaurant. [Online] Available at:<http://smallbusiness.chron.com/pros-cons-opening-restaurant-4742.html> [Accessed 22nd October 2012]. MAD Investment Solution, 2012. Ulaanbaatar Real Estate Areas. [Online] Available at:< http://www.mad-mongolia.com/resources/ulaanbaatar-overview/ulaanbaatar-areas/> [Accessed 22nd October 2012]. Ministry of Road, Transport and Tourism. n.d. [pdf] Available at: <http://www.investmongolia.com/forum/projects/tusul81.pdf>. [Accessed 25th October 2012].
  52. 52. Page 44 Mongolia - The Economy. n.d. [Online] Available at: <http://www.mongabay.com/reference/country_studies/mongolia/ECONOMY.html>. [Accessed 24th October 2012]. Mongolia looks to tourism to diversify its economy. 2012. World Tourism Organization UNWTO, [Online] Available at: <http://media.unwto.org/en/news/2012-08- 07/mongolia-looks-tourism-diversify-its-economy>. [Accessed 21st October 2012]. Mongolia Monthly Economic Update World Bank. 2012. [pdf] Available at: <http://www.mongolbank.mn/documents/moneypolicy/Mongolia_Quarterly12010_fu ll.pdf>. [Accessed 23rd October 2012]. The Abilities Fund. 2012. [Online] Available at: <http://www.abilitiesfund.org/resources/feasibility_101.php>. [Accessed 22 nd October 2012]. The Center for Hospitality Research of Cornell University, 2008. Success and Failure in Northern California: Critical Success Factors for Independent Restaurants. [Online] Available at:<http://www.uk.sagepub.com/chaston/Chaston%20Web%20readings%20chapters This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com
  53. 53. Page 45 %201-12/Chapter%204%20-%2013%20Camillo%20et%20al.pdf> [Accessed 22nd October 2012]. Ulaanbaatar Restaurants. n.d. [Online] Available at: <http://www.tripadvisor.in/Restaurants- g293956-Ulaanbaatar.html>. [Accessed 22nd October 2012]. What is strategic analysis?, n.d. [Online] Available at:< http://www.3s4.org.uk/looking- out/what-is-strategic-analysis> [Accessed 22nd October 2012].
  54. 54. Page 46 BIBLIOGRAPHY http://www.numbeo.com/cost-of-living/city_result.jsp?country=Mongolia&city=Ulaanbaatar http://forum.ls-rp.com/viewtopic.php?f=614&t=225776 http://www.mongolian-ways.com/culture.htm http://www.bplans.com/fast_food_restaurant_business_plan/financial_plan_fc.php#.UIUTw W_Miot http://canadabusiness.ca/eng/page/2747 This is Sample Assignment, for complete Assignment kindly contact at help@globalassignmenthelp.com

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