1. Green Flag
For
Green LIFE Hotel
Something for Everyone
Project Title : Green Flag for Green Life Hotel
Project Purpose : Construction of a 3 Star Eco friendly Hotel Restaurant
Project Location : Sappuwatta, Kamburapola, Debagama - Dehiowita
Project Implementer : Mr. N. G. Aruna Shantha Nilwala
Credit Facility Required : Rs.10.0 million ($.78 K)
Project Duration : 1 Year
2. 2 | P a g e
Contents
1. Executive Summary ………… Page 4
1.1 Our Eco-Friendly Policy ………… Page 4
1.2 Our Corporate Social Responsibility ………… Page 7
1.3 Our Mission ………… Page 6
1.4 Our Objectives ………… Page 7
1.5 Key to Success ………… Page 7
2. Company Summary ………… Page 8
2.1 Company Ownership ………… Page 8
2.2 Start-up Summary ………… Page 9
3. Services ………… Page 10
Things To Do ………… Page 11
3.1 Pricing and Profitability ………… Page 12
4. Market Analysis Summary ………… Page 12
4.1 Market Segmentation ………… Page 13
4.2 Target Market Segment Strategy ………… Page 15
5. Strategy and Implementation Summary ………… Page 15
5.1 Competitive Edge ………… Page 16
5.2 Market Strategy ………… Page 16
5.3 Marketing Program ………… Page 16
5.4 Sales Strategy ………… Page 17
5.5 Sales Forecast ………… Page 18
6. Web Plan Summary ………… Page 19
3. 3 | P a g e
7. Management Team ………… Page 19
7.1 Management Summary ………… Page 19
7.2 Personal Plan ………… Page 20
8. Financial Plan ………… Page 20
8.1 Break-even Analysis ………… Page 20
8.2 Projected Profit and Loss ………… Page 21
8.3 Pro Forma Profit and Loss ………… Page 22
8.4 Projected Cash Flow ………… Page 22
8.5 Pro Forma Cash Flow ………… Page 23
8.6 Pro Forma Balance Sheet ………… Page 24
8.7 Business Ratios ………… Page 25
9. Exit Strategy ………… Page 27
9.1 Trade, not Aid ………… Page 27
Appendix
Sales Forecast ………… Page 29
Personal Plan ………… Page 30
General Assumptions ………… Page 30
Pro Forma Profit and Loss ………… Page 31
Pro Forma Cash Flow ………… Page 32
Pro Forma Balance Sheet ………… Page 34
4. 4 | P a g e
1. Executive Summary
Green Life Hotel & restaurant is a 60 seat fine-dining restaurant with a 20 seat lounge.
We focus on our local Sri Lankan menus with Chinese/ Asian menus.
We will be located in the booming, and rapidly expanding, borough of Dehiowita
region, 1.5 Kilometers from Avissawella and 2 Kilometers from the Dehiowita town.
The outlook for the future of Green Life Hotel is promising as developers are
recreating an Rs.25 million first-class hotel/ resort project. approx 650 sq. ft. 10, Nature-
cabins with attached bathroom/ toilets and a patio/ veranda. There will be 3,000 sq. ft.
of Reception hall for Wedding/ Party reservations, and over 20 sq. ft. natural Pool with
Eco-bar closed to beautiful natural private Waterfall and a Ayurvedic Spa, DJ-dance on
every Friday night and recreational facilities like Cricket/ Badminton courts, boardwalk
through Rubber/ Coconut land and a Bike path over a total of 12 acres and also it will
be built with ferry service to Adam’s Peak (Sri Padaya) during the season. The
combination of these elements/ little bit of everything will provide the village with a
year-round economy.
The area is in need of a warm and friendly place with excellent food. A place where
you always know you will get the best of everything. Green Life Hotel & Restaurant
will feature a cozy dining room and an elegant lounge. Comfortable furnishings and
decor with soothing warm tones. The lounge has comfy couches and antique love seats
with a softly lit bar. It will be the perfect place to stop in for a bite to eat, for a drink or
for a small business meeting. For extra comfort and to please a large group of people
we will make up special offers for customers.
The menu will be inspired from different cousins' specialties and appeal to a diverse
clientele. Adding value will be an interesting business lunch menu with specialties
every day. The menu will change every 3-4 months but keep the favorites. Prices will
be competitive with other upscale restaurants in the area. However, it is the strategy of
Green Life Hotel & restaurant to give a perception of higher value than its
competitors, through its food, service and entertainment.
The lounge and restaurant will be open seven days a week. We will offer special theme
nights to attract new customers to Green Life Hotel. The restaurant will be fine dining
in a cozy atmosphere. Warm colors, fresh flowers, soft music, candles and amazing
artwork from some of the area’s most notable new artists. This will contribute to a
sense of community and give new artists a chance to show their work for a diverse
clientele. Even during the busy months you can also sit outside on our patio and we
will offer a special menu, featuring lighter fare, exotic drinks, as well as non-alcoholic
offerings. The patio and garden setting will be a fun and casual atmosphere for the
summer crowd.
The service will be relaxed, very friendly and correct. We will hire the best people
available, training, and motivating which will encourage them to retain the clientele and
5. 5 | P a g e
thereby you will get the friendliest most efficient staff possible. Our management team
is comprised of individuals whose backgrounds consist of 20 years experience in food,
restaurant and hotel, catering, management which will be a major part of the business.
We feel in today's hectic work schedule customers don't always have time to set up that
birthday party or other event that we all need and want. Now customers can leave it to
pros and get the finest, most memorable party or dinner ever which we will offer full
catering service providing everything from table settings to the dessert.
Most important to us is our financial success and we believe this will be achieved by
offering high-quality service and excellent food with an interesting twist. We have
created financial projections based on our experience and knowledge of the area. With
a start-up expenditure of Rs.18 million on the first stage which we can generate Rs.10
million in sales by the end of year two, and produce good net profits by the end of year
three.
We are seeking an Rs.10 million low-interest loan with a 7-9% p.a. interest rate,
repayable over 4 years with a grace period of 6-months against hotel-construction
property which is presently worth approx Rs.15 million (presently it’s a agriculture land
of rubber/ coconut). Our owner/ founder is investing approx Rs.8 million in the first
stage and expected to invest for Rs.15 million in the second stage of the project from
our own funds.
1.1 Our Eco-friendly Policy
Green Life Hotel is a hotel or accommodation that has made important environmental
improvements to its structure in order to minimize its impact on the environment as
the basic definition of a green hotel is an environmentally responsible lodging that
follows the practices of green living. During construction even, our main goal is to
ensure that the natural landscape surrounding the hotel remained unchanged, and
disruption of nature will be kept to a minimum level.
Even the design of the hotel, inspired by the use of traditional building methods applied
by skilled local craftsmen in areas. The unique furniture used to decorate the premises
will be made with re-used timber by the local craftsmen who live in the nearby villages.
The pieces of furniture revolve around a “natural” theme; the glass topped tables in the
reception area and the suites are filled with exotic seeds, spices and bark of various
kinds.
Hundreds of gallons of water might be consumed daily for bathing, washing, laundry
etc., are natural spring-water and also will be re-used by re-cycling it to minimise the
wastage of resources.
6. 6 | P a g e
1.2 Our Corporate Social Responsibility
Green Life Hotel will be participated in many projects aiding community development
which include;
We will identify schools that do not have proper resources and invite them to the
hotel for a day. We can educate them in the day to day operation of a hotel and
teach them about the hotel trade as we give opportunities and advice to students
who were interested in joining the hotel trade in the future.
Green Life Hotel will donate necessary school books and stationery to children
from nearby villages who do not have the resources to purchase these items and
attend school.
Annually we planned to supply lunch and dry rations to people from nearby
villages.
We will conduct workshops to educate the local people about the environment,
their role in it and how we are all affected by pollution and global warming.
We also can sponsor many blood donation programmes that are conducted at the
hotel.
1.3 Our Mission
Green Life Hotel is a great place to eat, combining an intriguing atmosphere with
excellent, interesting food. The mission is not only to have great tasty food, but have
efficient and friendly service because customer satisfaction is paramount. We want to
be the restaurant choice for all families and singles, young and old, male or female.
Employee welfare will be equally important to our success. Everyone will be treated
fairly and with the utmost respect. We want our employees to feel a part of the success
of Green Life Hotel & restaurant. Happy employees make happy guests.
We will combine menu variety, atmosphere, ambiance, special theme nights and a
friendly staff to create a sense of 'place' in order to reach our goal of overall value in
the dining/ entertainment experience. We want fair profits for the owners, and a
rewarding place to work for the employees.
7. 7 | P a g e
1.4 Our Objectives
Green Life Hotel & restaurant's objectives for the first three years of operation include:
Keeping food cost under, 35% revenue.
Keeping employee labour cost between 24-29% of revenue.
Averaging sales between Rs.47 million per year one, and Rs.56.5 million in sales by
the end of year two and produce net profit of over 7.5% on sales by the end of year
three.
Expand our marketing and advertising around the world through web.
Assumption: Exchange rate is assumed as $1.0 = Rs.128.8, and will be vary depending
on the market conditions.
1.5 Keys to Success
The creation of a unique and innovative fine dining atmosphere will differentiate us
from the competition. The restaurant will stand out from the other restaurants in
the area because of the unique location, design and decor. We will offer a fine
dining experience in a cool-cozy atmosphere. The fact that no other restaurant in
the area has this concept and atmosphere presents us with a window of opportunity
and an entrance into a profitable niche in the market.
Product quality. Not only great food but great service and atmosphere and the menu
will appeal to a wide and varied clientele.
8. 8 | P a g e
We will have special theme nights like restaurant nights, local artist's openings, and
weekend DJ dance, wine tasting dinners, special ethnic food nights. All this will
attract a varied clientele to Green Life Hotel.
Controlling costs at all times without exception.
Due to intense competition, restaurateurs must look for ways to modify/
differentiate their place of business in order to achieve and maintain a competitive
advantage. The founders of Green Life Hotel's realize this. With the re-entering
from the second stage development, it needs a place that will fit into the 'better look'
of the community that is exclusive and entertaining.
The Eco-tourism is committed to further the NATIONAL stated vision that “Tourism
in Sri Lanka shall continue to be developed to the highest standards for the
optimum social and economic benefit of the locals while maintaining a commitment
to the protection and conservation of the natural environment and biodiversity thus
helping our country and local communities’ work towards social, ecological and
economic sustainability.
2. Company Summary
Green Life Hotel & restaurant will feature outstanding local menus with Asian/
Chinese menus in an upscale and cozy atmosphere. The menu is inspired from
different cuisine's specialties and will appeal to a wide and varied clientele. We will
offer a three course ‘business lunch' in addition to the regular menus.
We will be open 7 days a week. Serving lunch Monday to Friday 11:30 am-2:30 pm.
Dinner Sunday to Thursday, between 6 pm-10 pm. Friday and Saturday Dinner
6 pm-11 pm. The lounge will be open until 2 am Friday and Saturday. Sunday to
Thursday the lounge will stay open till 12 am. Saturday and Sunday we will serve
brunch between 11 am-3 pm. We will not be closed on New Year’s Day, and Christmas
Day as these are the biggest weekends that brings many guest/ tourists to the area.
We will send out special invitations for the opening night and attract many people and
newspapers. The showing will only take place in the lounge so that we can still seat
people in the restaurant.
2.1 Company Ownership
The hotel will start out as a simple sole proprietorship, owned by its founders Mr. N. G.
Aruna Shantha Nilwala, the Provincial Minister of Dehiowita area where he started his
political career in 2001. and will function as the General Manager – CEO, and his asset
base will be approx Rs.28 million.
9. 9 | P a g e
2.2 Start-up Summary
The founder of the company is Mr. N. G. Aruna Shantha Nilwala works as GM – CEO
and manages HRM & focuses on the financial issues as well. He is looking for a hotel
space approx 12 Acres in surrounding area where such Green Life Hotel will open for
public by June, 2014.
He is personally committing altogether, approx Rs.8 million (Rs.5 million to start-up,
and another Rs.3 million as a working capital), and seeking an additional Rs.10 million
from a Bank for low interest rate, preferably 7-9% p.a. to start up the hotel.
Our start-up costs come to Rs.18,100,000/- ($.141,000) which is mostly expensed
equipment, furniture, painting, construction, start-up labor, license, six months operating
cash, and legal and consulting costs associated with opening the Hotel.
Start-up Funding
Start-up Expenses to Fund $3,000
Start-up Assets to Fund $138,000
Total Funding Required $141,000
Assets
Non-cash Assets from Start-up $50,000
Cash Requirements from Start-up $88,000
Additional Cash Raised $0
Cash Balance on Starting Date $88,000
Total Assets $138,000
10. 10 | P a g e
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $1,000
Other Current Liabilities (interest-free) $0
Total Liabilities $101,000
Capital
Planned Investment $40,000
Additional Investment Requirement $0
Total Planned Investment $40,000
Loss at Start-up (Start-up Expenses) ($3,000)
Total Capital $37,000
Total Capital and Liabilities $138,000
Total Funding $141,000
3. Services
Green Life Hotel & restaurant will be unique to the surrounding area where the Food
and a style of service that will make everyone feel welcome and special. Our food
products will be of the finest quality and prepared with sensitivity and care. We will 'go
all the way' to satisfy our guests and will change our menu every 3-4 months, but we'll
keep 'every-one’s favourite' and the portions will be modestly sized with an attractive
presentation.
We also wish to serve all sort of local & foreign liquor as well and approximately 25%
will be exclusively available by the glass and the remaining labels will be available by
the bottle. We will also feature a moderate international beer selection on tap and in
bottles. The comfortable softly-lit bar features a comprehensive selection of the finest
Vodkas, Aquavits, Wines and Scotches.
During any busy months customers can also sit outside on patios and we will offer a
special menu, featuring lighter fare, exotic drinks, as well as non-alcoholic offerings. The
patios of the very Nature-cabin and garden setting will be a fun and cool-casual
atmosphere for the guests.
11. 11 | P a g e
The kitchen staff will have the best in culinary education and work experience and
creative talents will compliment one another. The hotel and restaurant staff will offer
the finest service in a cool-cozy atmosphere and offer customers an extraordinarily
successful time.
The Menu
The menu is going to be extremely simple but changing every day. We will keep a
small group of constants on the menu and then feature a chef's recommendation that
we plan to have 85% of meals ordering. This will help us to reduce waste and plan
ingredients and purchasing.
Organic Ingredients
The organic ingredient element will allow us to price to the extremely wealthy Internet
entrepreneurs who are looking to spend an exorbitant amount of money to have peace
of mind that their money is still coming back to themselves. We will be extremely
ecologically conscious as well, and spread this across our literature. Eating at Green
Life Hotel will feel like having contributed to the mother-nature.
Ethnic Ingredients and Recipes
Our chef will have great latitude in designing and producing menu offerings from
many different cultures. We will endeavor to procure all the traditional, authentic
ingredients necessary to hold true to these varied and interesting recipes.
THINGS TO DO
Outdoor Activities:
Bicycle Rides
Remember the times of riding a bike with uninhibited glee & delight as you pedal
through the green and experience nature as never before and we will also include
Bicycle-track for anyone who likes expedition where the Bicycles can be requested at
the front desk.
Since, Green Life Hotel has a goal to preserve as much of the surrounding nature as
possible, we do not allow motorised vehicles onto the premises other than the vehicle
park, in fear of its affects on the eco-system. Therefore, bicycles are the preferred
method of travelling.
Cricket/ Badminton
A cricket/ Badminton are also available for all guests to play on. Balls, bats and other
equipments like; Rackets, Shuttle-cocks can be requested at the front desk.
Bird Watching
Each Nature-cabin is equipped with binoculars for a very specific reason; over 100
species of birds migrate to the areas surrounding Green Life Hotel. An early morning
12. 12 | P a g e
walk through the greens is a treat for bird lovers. 435 birds have been identified in Sri
Lanka and among these 26 are endemic to Sri Lanka. The Serpent Eagle and the Hawk
Eagle are among many birds which can be spotted here.
Nature Walks
Walk through the rubber land encompassing Green Life Hotel and encounter many
species of animals; butterflies flutter past you as you walk along, donkeys walk ahead of
you as if leading the way, monitors scamper about the fields and peacocks stretch their
wings to display the radiance found in nature. Green Life Hotel is flanked by the
private natural waterfall, bestowing the surrounding land with an abundance of plants,
flowers and trees for you to explore.
Every Friday night (most of the hectic workers ease their mind and body after restless
weekdays) we will have 'Restaurant Night.' This will give the chance to socialize on a
'night off' and it will contribute to a sense of community in the local industry.
Green Life Hotel & restaurant will be the perfect place when customers need that
'little extra.' They can have business meetings here, a place for a quiet conversation, or
for a special occasion. We will make up special meals for customers' special occasions.
3.1 Pricing and Profitability
We anticipate our total sales allocation to be 85% from Restaurant sales and 15% from
Wedding/ reception & catering sales. The combined cost of sales will be 33% producing
a gross profit of 67% on total sales.
Prices will be competitive with other upscale restaurants in the area. However, it is the
strategy of Green Life Hotel & restaurant to give a perception of higher value than its
competitors, through its food, service and entertainment.
4. Market Analysis Summary
Because of the founders' connections within the very trendy area of Dehiowita, we have
an excellent feel for the area and its core group of customers. They will all share
something alike, which is a feeling of being in the "in crowd" and having "gotten it" in
life. Although the crew will be different and not connect with each other in each
segment, each segment is complementary to the others. We do plan to raise menu rates
as the restaurant gets more and more crowded, and to make sure we are charging a
premium for the feeling of being in the "in crowd".
Green Life Hotel focuses on local and tourist restaurant seekers, whom have a desire
for good food and a fascinating atmosphere.
Dehiowita is located approx 56 Kilometers’ East (about 1 hour & 25 mins driveway) of
Colombo and 106 Kilometers’ (about 1 hour & 45 mins driveway) West of Nuwara Eliya.
The town is in the process of revitalizing. In end of 2013, the city will be developing a
new look due to Dayata-kirula and will be attracting a larger guests & tourists.
13. 13 | P a g e
Dehiowita Town - tomorrow:
There are four sectors which are identified as:
1. Centre/ pathway/ hub of the many activities, factories & business places; like Tea,
Rubber, Garments, Farms (mixed Executives/ Office bearers, & Businessmen),
2. Pathway/ midpoint to the Adams peak/ Sri-padaya (Seasonal - Locals & Foreigners),
3. Pathway/ midpoint to the white water rafting area of (Seasonal - mostly Foreigners),
4. Midpoint/ main road of Ratnapura – Kegalle/ Kandy (Businessmen/ Office bearers).
This project, Green Life Hotel & restaurant will change the face of the town front for
the next twenty years and provide a major economic boost to the area.
The influx, continues local & foreign guests will provide the village with a legitimate
year-round economy.
As the Dehiowita town is re-developing, we can see that a fine dining establishment like
Green Life Hotel & restaurant is considered necessary here. The town will have much
to offer and the people that it draws expect a place where they will get the best of
everything. The Green Life Hotel & restaurant will offer a new fine dining concept to
the area. The elegant atmosphere, our excellent food and our friendly staff will stand
out and make a name in the country. We will succeed by giving people a combination
of excellent and interesting food in an environment that attracts successful people that
want to get a little bit more out of life than just the ordinary!
4.1 Market Segmentation
Green Life Hotel & restaurant intends to cater to a wide group of people where we
want everyone to feel welcome and relaxed in a cozy atmosphere with wide and varied
menus. It is our goal to have "Something for Everyone" everyday. In looking at our
market analysis, we have defined the following groups as targeted segments.
The Businessmen, Executives & Lonely Rich:
The Businessmen (most of them are company owners) work hard all day and often stay
overnight in a strange place which they need a competent establishment that helps
impress their clients and prospects. Afterward, they want to relax and use the money
they are making. They are the people that spend the most on drinks, food and tips.
On the other hand, most of Executives & Lonely Rich are Bankers, tech workers these
days, and most of them work in a computer environment. Their life has become their
computers & servers and code they write, and the people who help them to make the
decisions in that world. They hang out with each other, but desperately want to get
away from it and use the money they are racking up. Because this wealth has come
fairly easily for them, it is particularly easy to separate them from their money again -
they spend the most on drinks, appetizers and tips.
14. 14 | P a g e
Happy Couples & Families:
The restaurant will have an intimate, romantic, green-cool atmosphere that encourages
people to bring dates and to have couples arrive. Green Life Hotel wants to be a search
place where people meet each other and develop a network. These young couples are
generally very successful but balanced and won't be spending as much on drinks but
require quiet cool but much secure atmosphere.
On the other hand for families; they need a perfect place to getaway their daily routine.
Families will come for the accommodative menu and friendly service. The excellent
value in their meals will keep Green Life Hotel’s in favor with the parents, where the
organic food menu will always have a line of extremely delicious very low-fat meals.
Green Life Hotel & restaurant will have tables for them to discuss all types of matters
while feeling good about the food they eat.
High-end Singles, Rich Hippies & Tourists:
The High-end Singles, rich hippies in the Kegalle District are a massive group with
tremendous influence over the city's government and private enterprise. They wear
tie-die but drive exceptionally expensive vehicles and crave the feeling of being in a
social circle that is changing the world - even if in different ways than in their glory
days. We will cater to their ecological ideology and contribute to charities to help them
part with more of their money.
We will also attract them with our eco-friendly surrounding, decor and layout. Our
private natural Waterfall/ natural pool, tasty menu, striking landscape, happenings/
evenings and events, excellent service and engaging clientele will confirm the feeling of
being in "the coolest place" in the County. And this area attracts many vacationers
throughout the year. Green Life Hotel will be a destination with its attractive
atmosphere, with various menus, and outdoor patios.
15. 15 | P a g e
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential
Customers Growth CAGR
Business Man 17% 14,280 16,708 19,548 22,871 26,759 17.00%
Happy Couples 14% 8,925 10,175 11,600 13,224 15,075 14.00%
Tourists 15% 3,570 4,106 4,722 5,430 6,245 15.00%
The Family 13% 5,355 6,051 6,838 7,727 8,732 13.00%
High-end Singles 12% 3,570 3,998 4,478 5,015 5,617 12.00%
Total 14.99% 35,700 41,038 47,186 54,267 62,428 14.99%
4.2 Target Market Segment Strategy
Green Life Hotel will focus on attracting a wide and diverse clientele ages 25-60 with a
monthly income of at least Rs.30,000/-.
We want the businessmen, happy couples, high-end singles, families and tourists with
money, wealthy image seekers and compulsive spenders. We focus on these specific
groups because these are the types of people who frequent other restaurants and bars in
the area. They are the ones that are willing to spend their money on good dining and
service at a value price. We generally know the characteristics of our clientele with the
available demographics.
Our geographic include people from the local area, restaurant patrons
from neighboring cities, and tourists from other cities and states. The characteristics of
our clientele will be people who are creative, entertaining and stylish diners.
5. Strategy and Implementation Summary
Our strategy is simple; we intend to succeed by giving people a combination of
excellent and interesting food in a green environment that appeals to a wide and varied
group of successful people. We will focus on maintaining quality and establishing a
strong identity in the community. Our main focus in marketing will be to increase
customer awareness in the surrounding communities. We will direct all of our tactics
and programmes toward the goal of explaining who we are and what we do. We will
keep our standards high and execute the concept so that word-of-mouth will be our
main marketing force.
We will create an appealing and entertaining environment with unbeatable quality at
an exceptional price. An exciting and friendly restaurant, we will be the talk of the
town. Therefore, the execution of our concept is the most critical element of our plan.
All menu items are moderately priced for the area. While we are not striving to be the
lowest-priced restaurant, we are aiming to be the value leader.
16. 16 | P a g e
5.1 Competitive Edge
Our competitive edge is the menu, the chef, the green-environment, the management,
the service and our friendly place..! We will have an mouthwatering menus and our
food will be made with the freshest ingredients and produce available. The chef has an
excellent taste for what fine dining is and requires. Our environment and private
Waterfall is elegant and comfortable furniture’s and our decor is warm and relaxing.
Great service is very important to us. The management and servers will handle every
detail to make customer's special evening even more special..! All this and our great
cool atmosphere will make customers want to come back again and again..!
We don’t have much competitive in this area, not with this much of characteristics &
resourcefulness but, everyone that sells prepared meals is our competition though
because we all compete for the same home meal replacement rupee. However, there are
two segments of the restaurant industry that are our main competition; the casual
dining restaurant concept and the fine dining value restaurant. If the value of the food
and price and service is better at a fine dining restaurant than a casual restaurant with
a quiet surrounding, where will is a customer more likely to go..?
The key is to deliver the best food at the best price with the highest level of service.
This is the very definition of value. This concept is at the heart of Green Life Hotel &
restaurant.
5.2 Marketing Strategy
The total population in country is 23 million people, in which, over 50% between 25-55
years old. That is the age group that dines out two to three times a week and spends an
average Rs.5,000/- to Rs.15,000/- a month on food and drinks.
There are 500,000 households in the area and an average 2.7 persons per household.
The medium family income in Kegalle district is averages, Rs.40,000/- to Rs.60,000/-per
month. There are approx 650 registered businesses in Dehiowita and surrounding area
with approx 7000 employees.
We mention that there are over 200,000 foreigners living/ touring in the country and
most of them travel within 50 Kilometer radius. We will be serving some international
cuisine as there is no star-class hotel/ restaurant in this area.
5.3 Marketing Program
We will employ three different marketing tactics to increase customer awareness of
Green Life Hotel & restaurant. Our most important tactic will be word-of-mouth/
in-store marketing. This will be by far the cheapest and most effective of our marketing
programs.
17. 17 | P a g e
Word-of-mouth/In-store Marketing
V.I.P. Party - We will host a V.I.P. Dinner before the 'Grand Opening.' This will serve
the dual purpose of training our staff and introducing ourselves to the community.
The list of individuals we will invite comes from the political parties.
Grand Opening celebration.
Once a month invite a new local artist to show their work in the lounge.
"Restaurant Night" - Every Friday night we will have a special evening for restaurant
people. A perfect night for the local area's restaurant owners and staff to get
together on a night off!
New Years Eve & Christmas parties.
Special ethnic food, Cocktail & DJ nights.
Make a brochure for the large breakfast establishments in surrounding area,
containing interior & exterior pictures of our restaurant, menus and prices.
There are few nursing homes and hospitals in the city where we will approach them
to sponsor meals for the elderly. This will offer us higher visibility to a group that
may not be as mobile and we'll be contributing to the community in a material way.
Word-of-mouth referral is very powerful and particularly amongst the elderly to
both their peers and their extended families.
Local Media & Newspaper campaign - Placing several large ads throughout the
month to deliver our concept to local area.
Direct mail piece - Containing interior pictures of our restaurant, our menu, "Food,
Cocktail & DJ Nights," catering and an explanation of our concept.
Website.
Target marketing to businesses for regular business lunch and dinner entertaining.
5.4 Sales Strategy
Our sales plan is to establish and maintain position with our local customers. The
strategy is to build more customers in order to increase revenue. A sale in our business
is client service. It is repeat business. We will focus on making all our customers happy
with our food, service and entertainment options.
Our strategy in the restaurant is to have an experienced staff that knows the food, local
and foreign liquor. We will train every new employee so that they will fit in
with Green Life Hotel’s concept, which is "Wonderful food, reasonably-priced drinks
and knowledgeable service in an outstanding atmosphere."
18. 18 | P a g e
5.5 Sales Forecast
As the table shows, we intend to deliver sales of about $350,000 in the first year, and to
double that by the third year of the plan.
Sales Forecast
Unit Sales Year 1 Year 2 Year 3
Meals 22,822 35,000 45,000
Drinks 11,415 17,500 22,500
Other 240 500 1,000
Total Unit Sales 34,477 53,000 68,500
Unit Prices Year 1 Year 2 Year 3
Meals $15.00 $15.00 $15.00
Drinks $2.00 $2.00 $2.00
Other $10.00 $10.00 $10.00
Sales
Meals $342,330 $525,000 $675,000
Drinks $22,830 $35,000 $45,000
Other $2,400 $5,000 $10,000
Total Sales $367,560 $565,000 $730,000
19. 19 | P a g e
Direct Unit Costs Year 1 Year 2 Year 3
Meals $2.00 $2.00 $2.00
Drinks $0.50 $0.50 $0.50
Other $1.00 $1.00 $1.00
Direct Cost of Sales
Meals $45,644 $70,000 $90,000
Drinks $5,708 $8,750 $11,250
Other $240 $500 $1,000
Subtotal Direct Cost of Sales $51,592 $79,250 $102,250
6. Web Plan Summary
Of course, the Green Life Hotel will have a comprehensive website. It will be the
virtual business card and portfolio for the company, simple, classy and well designed.
Our site will offer our menus, prices, reviews and happenings at Green Life Hotel's. We
will also have a monthly newsletter about what did happen at Green Life Hotel's to get
new customers interested in our restaurant.
Foreign guests, even from their country will be able to send us an e-mail when they
want to make reservations at our hotel/ restaurant or to book and it’s fast, easy and
convenient..!
7. Management Team
Our management team should be well compensated. We tend to have a team that has
considerable experience together and shares knowledge in many different fields of
business and in life. In Year 2 we will hire a General Manager to assist Green Life
Hotel & restaurant to grow even further. The General Manager will also work to
expand and then can concentrate more on the kitchen and take the restaurant to yet a
higher level.
7.1 Management Summary
With great experience managing personnel and we are quite confident of his ability to
find the best staff possible. The chef, will have a excellent knowledge in cookbooks that
will add prestige to the restaurant immediately. We will be looking to find a young,
ultra-hip staff to make sure we add the edge that makes Studio67 so trendy.
20. 20 | P a g e
7.2 Personnel Plan
As the personnel plan shows, we expect to invest in a good team, fairly compensated.
We think the planned staff is in good proportion to the size of the restaurant and
projected revenues.
Year 1 Year 2 Year 3
Manager $60,000 $65,000 $70,000
Hostess $42,000 $45,000 $50,000
Chef $54,000 $60,000 $65,000
Cleaning $30,000 $35,000 $40,000
Waiters $72,000 $100,000 $130,000
Other $24,000 $52,000 $55,000
Total People 8 10 12
Total Payroll $282,000 $357,000 $410,000
8. Financial Plan
We expect to raise $40,000 of our own capital, and to borrow $100,000 as a 4-year loan.
This provides the bulk of the start-up financing required.
8.1 Break-even Analysis
Our break-even analysis is based on the average of the first-year numbers for total sales
by meal served, total cost of sales, and all operating expenses. These are presented as
per-unit revenue, per-unit cost, and fixed costs. We realize that this is not really the
same as fixed cost, but these conservative assumptions make for a better estimate of real
risk.
Monthly Units Break-even 3,205
Monthly Revenue Break-even $34,171
Assumptions:
Average Per-Unit Revenue $10.66
Average Per-Unit Variable Cost $1.50
Estimated Monthly Fixed Cost $29,375
21. 21 | P a g e
8.2 Projected Profit and Loss
As the profit and loss table shows, we expect to become barely profitable in the second
year of business, and to make an acceptable profit in the third year.
22. 22 | P a g e
8.3 Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $367,560 $565,000 $730,000
Direct Cost of Sales $51,592 $79,250 $102,250
Other $0 $0 $0
Total Cost of Sales $51,592 $79,250 $102,250
Gross Margin $315,969 $485,750 $627,750
Gross Margin % 85.96% 85.97% 85.99%
Expenses
Payroll $282,000 $357,000 $410,000
Sales and Marketing and
Other Expenses $27,000 $35,830 $72,122
Depreciation $0 $0 $0
Utilities $1,200 $1,260 $1,323
Payroll Taxes $42,300 $53,550 $61,500
Other $0 $0 $0
Total Operating Expenses $352,500 $447,640 $544,945
Profit Before Interest and
Taxes ($36,532) $38,110 $82,806
EBITDA ($36,532) $38,110 $82,806
Interest Expense $9,673 $8,887 $7,637
Taxes Incurred $0 $7,306 $19,105
Net Profit ($46,204) $21,917 $56,063
Net Profit/Sales -12.57% 3.88% 7.68%
8.4 Projected Cash Flow
The cash flow projection shows that starting cost and provisions for ongoing expenses
are adequate to meet our needs until the business itself generates its own cash flow
sufficient to support operations.
23. 23 | P a g e
8.5 Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $367,560 $565,000 $730,000
Subtotal Cash from Operations $367,560 $565,000 $730,000
Additional Cash Received
Sales Tax, VAT, HST/GST
Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-
free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $367,560 $565,000 $730,000
24. 24 | P a g e
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $282,000 $357,000 $410,000
Bill Payments $117,968 $185,584 $257,538
Subtotal Spent on Operations $399,968 $542,584 $667,538
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current
Borrowing $0 $0 $0
Other Liabilities Principal
Repayment $0 $0 $0
Long-term Liabilities Principal
Repayment $6,133 $10,000 $15,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $406,101 $552,584 $682,538
Net Cash Flow ($38,541) $12,416 $47,462
Cash Balance $49,459 $61,875 $109,337
8.6 Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $49,459 $61,875 $109,337
Other Current Assets $50,000 $50,000 $50,000
Total Current Assets $99,459 $111,875 $159,337
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $99,459 $111,875 $159,337
25. 25 | P a g e
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $14,796 $15,294 $21,693
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $14,796 $15,294 $21,693
Long-term Liabilities $93,867 $83,867 $68,867
Total Liabilities $108,663 $99,161 $90,560
Paid-in Capital $40,000 $40,000 $40,000
Retained Earnings ($3,000) ($49,204) ($27,287)
Earnings ($46,204) $21,917 $56,063
Total Capital ($9,204) $12,713 $68,776
Total Liabilities and Capital $99,459 $111,875 $159,337
Net Worth ($9,204) $12,713 $68,776
8.7 Business Ratios
Business ratios for the years of this plan are shown below. Industry Profile ratios based
on the Standard Industrial Classification (SIC) code 5813, Eating Places, are shown for
comparison.
Ratio Analysis
Year 1 Year 2 Year 3
Industry
Profile
Sales Growth - N/A - 53.72% 29.20% 7.60%
Percent of Total Assets
Other Current Assets 50.27% 44.69% 31.38% 35.60%
Total Current Assets 100.00% 100.00% 100.00% 43.70%
Long-term Assets 0.00% 0.00% 0.00% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
26. 26 | P a g e
Current Liabilities 14.88% 13.67% 13.61% 32.70%
Long-term Liabilities 94.38% 74.97% 43.22% 28.50%
Total Liabilities 109.25% 88.64% 56.84% 61.20%
Net Worth -9.25% 11.36% 43.16% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.96% 85.97% 85.99% 60.50%
Selling, General &
Administrative Expenses 98.90% 82.32% 78.45% 39.80%
Advertising Expenses 0.65% 1.77% 6.16% 3.20%
Profit Before Interest and
Taxes -9.94% 6.75% 11.34% 0.70%
Main Ratios
Current 6.72 7.31 7.34 0.98
Quick 6.72 7.31 7.34 0.65
Total Debt to Total Assets 109.25% 88.64% 56.84% 61.20%
Pre-tax Return on Net Worth 501.98% 229.87% 109.29% 1.70%
Pre-tax Return on Assets -46.46% 26.12% 47.18% 4.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -12.57% 3.88% 7.68% - N/A -
Return on Equity 0.00% 172.40% 81.52% - N/A -
Activity Ratios
Accounts Payable Turnover 8.91 12.17 12.17 - N/A -
Payment Days 27 30 26 - N/A -
Total Asset Turnover 3.70 5.05 4.58 - N/A -
Debt Ratios
Debt to Net Worth 0.00 7.80 1.32 - N/A -
Current Lab. to Lab. 0.14 0.15 0.24 - N/A -
27. 27 | P a g e
Liquidity Ratios
Net Working Capital $84,663 $96,580 $137,643 - N/A -
Interest Coverage -3.78 4.29 10.84 - N/A -
Additional Ratios
Assets to Sales 0.27 0.20 0.22 - N/A -
Current Debt/Total Assets 15% 14% 14% - N/A -
Acid Test 6.72 7.31 7.34 - N/A -
Sales/Net Worth 0.00 44.44 10.61 - N/A -
9 Exit Strategy
No one attempt a business anticipating failure, however sometimes ventures does not
fulfil their promise.
We at Green Life Hotel are committed to its concept and its viability. In the event that
our venture cannot achieve profitability and retire the encumbrances; we will first
attempt to sell the operation and use the proceeds to clear all outstanding balances. If
we are unable to sell the operation for sufficient proceeds we will be forced to default
whereby the loan will be in senior standing. Any further outstanding balances will be
borne by the investor/ GM - CEO on a weighted percentage basis of the total amounts
due in bankruptcy proceedings.
Since, the present income of this agriculture land (derives from Coconut & Rubber
cultivation) is averaged around Rs.300,000/-, the loan repayment can be easily serviced,
and will avoid bankruptcy proceedings.
9.1 Trade, not Aid
The world needs a new way to fight poverty – one that is not only effective, but
sustainable. We have found that way with a new idea to use eco-tourism to help build
capacity in poor communities in the developing world. The money that tourists and
trekkers spend at hotel would stay in the community. But, we’d do more. Through our
establishment, we will help communities learn the new skills they need to operate/
develop the hotel and by doing so, will help the community grow.
Imagine if your next vacation could help fight our country’s poverty. Every trek you’d
take, you’d be helping a community in this country which might have a better, brighter
future. That’s our idea.
28. 28 | P a g e
Further, we want to create a chain of community owned by eco-lodges/ hotels along
wilderness trekking routes. They would not only give eco-tourists a whole new level of
comfort, they’d also be built to the highest environmental standards.
All the products used in the hotel—from the food we serve to the beds you sleep
on—will be sourced from the local communities. The profits that come in from the
eco-tourists will help the communities grow and create new development projects for
themselves.
The local communities will need a whole series of new skills, and we’ll work with them
to achieve that. We can provide vocational training and work experience in the
long-run. And what they learn from there, they’ll be able to use to make their
community and their environment a better place to live.
What’s our idea for fighting poverty..? A hand-up, not a hand-out. We’ll use the power
of eco-tourism to help change poor communities that will provide a sustainable source
of income and new skills to make it work.
That’s our idea. What’s yours..?
Help—Join the cause and make it happen..!
