Thai Delicacies will be a moderately priced, ethnic themed restaurant offering authentic Thailand fare. The restaurant will infuse both table service style and take-out style to cater for customers that are always on the move (Regina & Joseph, 2010). Professional waiters will ensure that table service is quick and orders delivered in time. The décor for Thai Delicacies describes as Thailand art theme reminiscent of its cultural values. The fittings and furnishings will complement the proposed image of the ornamentation and restaurant concept of the Thailand art theme (Douglas, 2007.).
Unique selling points will include ‘real taste buds of Thailand’, unique décor with a touch of Thailand arts and artefacts and live performance by Phuket band at dinner (Shawn et al., 2013). The restaurant will require 100-140 square meters of space, able to set between 80-100 guests located at The Jacksonville Landing mall. Furthermore, the restaurant will have a minimum of 16 parking spaces available for the expected customer traffic.
As point of differentiation, Thai Delicacies will use smartphone app for customers to order from their tablets or smartphones fostering convenience. Furthermore, Thai Delicacies intends to build a strong public image and gain support from customers through its sustainable initiatives with Porters community farm to facilitate gift gardens projects. As well, Thai Delicacies strives to gain a strong brand equity through strategic promotional and advertising tactics, menu differentiation and quality, personalized and customer-friendly service and offer variety through special diet chef. The whole project will require approximately $1,000,000 to finance and propel this viable, unique and customer-based restaurant.
This business plan is for Thai Delicacies restaurant that mainly majors in Thai cuisine. It is a partnership between Hillary Sanders and Tim Newton. Thai Delicacies will mainstream in Thailand foods such as Talay pad pak, talay pad king and Nam tok with active cooking as a unique feature to differentiate itself from competitors. Thailand cuisine is an emerging trend expected to grow at 5% growth in 2012. Thai Delicacies will capitalize on Thais’ living in Gainesville, Alachua County and other markets since there are cultural similarities in food consumption between Thai cuisine and American cuisine. For example, Sushi is a delicacy across all markets.
Thai Delicacies business plan will provide extensive analysis on company description, sustainable business practices, market and industry analysis as well as emerging trends. Furthermore, the plan also addresses on the feasibility of Thai Delicacies through analysis of financial projections and critical risks management. A harvest strategy and a milestone schedule provided on how to carry out the project. Douglas (2007) states that it is the initial step to gain competitive advantage. In a world of strong competition, the quality of products and services is the way of retaining the existing markets or raising the bar high for new market entrants to beat off competitors. The marketing strategies adopted will take into account the reputation and creating a strong brand equity for Thai Delicacies’ Restaurant. This approach means affordable prices for clients, meaningful world market for its clients and of the areas where there are exclusive producers or distributors.
Thai Delicacies Restaurant is unique to Gainesville, Florida. Thai Delicacies is a partnership venture located at The Jacksonville Landing, Alachua Florida. Thai Delicacies will offer three distinct features to cater for the market demands in Florida. It includes Magic Krabi Lounge, Surin bar and Sushi restaurant full-service dining. Thai Delicacies offers its customers with a variety of dining experiences, enriched and authentic menus as well as entertainment options. Thailand Delicacies will serve a variety of classic Thailand cuisine that include Larb moo, tom yum gung, kao Na phet and kao mok gai among others. Active cooking corner, one of its unique features will serve foods such as muo dad diew, Gai Yang and Plah plow.
The restaurant will range from 100-140 square meters and will seat between 80-100 customers. Moreover, the restaurant will cater for all demographics. The Jacksonville Landing is easily accessible and offers ample parking space and zoning. The management team mandated to run the operations in the restaurant have over than 12 years of experience restaurant and hotel management. The restaurant manager, Executive chef will have experience in Thailand and multi-ethnic cuisine. Managerial areas of concern also considered marketing and guest relations.
Thai Delicacies restaurant will operate from Monday to Sunday serving lunch and dinner. The normal hours of operation anticipated are as follows:
|Monday-Thursday||10.00 am to 11.00pm|
|Friday- Sunday||12.00 pm to 3.00 am|
Thai Delicacies will start out as a partnership venture. It is owned by the two partners, Hillary Sanders and Tim N. Tim will be in charge of managing a restaurant, while Hillary will be in charge of marketing and guest relations functions. Tim N. has vast experience in restaurant operation and also worked as restaurant manager at McDonalds. He has a degree in Tourism and hotel management and a diploma in restaurant operations at Rosen College. As well, Hillary Sanders worked as sales and marketing manager at Burger King. Their vast wealth of experience will see the business grow and achieve set targets.
Thai delicacies are a partnership venture operated by Tim N. and Hillary Sanders. The restaurant registered in the state of Florida at Alachua County.
Thai Delicacies located at Jacksonville Landing, Gainesville that has riverfront mall with plenty social gatherings and events. Riverfront mall is one of the busiest malls and its strategic location fosters convenience and accessibility (Douglas, 2007). The area has few restaurants and setting up Thai Delicacies will be an added advantage. Furthermore, it is near the University of Florida and Maritime Heritage Museum.
Regina & Joseph (2010) state that the consumer are becoming more concerned with green practices that add value to the environment and social life. Restaurants are part and parcel of this concept and Thai Delicacies is looking forward to enhancing green purchasing behaviour of its menu items. Consumers are aware of environmental problems and support business that are ecologically conscious. Sustainable business practices save on costs, increased revenues and profitability, reduces risks, and it enhances company’s reputation. It’s against this basis that Thai Delicacies will implement a sustainability framework to meet the evolving customer expectations in regard to promoting eco-friendly initiatives. Thai Delicacies sustainability commitment statement aims to foster sustainable initiatives in menu engineering, food production and service for sustainable growth and profitability as well as environmental responsible (Terence, 2013).
The restaurant industry is one of the fastest and growing industries in the United States. Facts from the National Restaurant Association indicates that it contributed close to 4.5 % to the G.D.P of United States with a projection of $ 1000 billion by the end of 2013. Ethnic restaurants, Thailand-themed restaurants, included playing a major role in the U.S. Thailand restaurants has increased over the years, especially in Alachua, Florida due to the large population of Thailand people. Alachua accounts for 5.4 % of the total population of Thailand’s living in Florida. This rapid growth can also be alluded to the influence of soldiers who went in peacekeeping mission in Thailand, marrying Thai ladies and adapting to Thailand culture.
Rapid change and evolving consumer needs require restaurants to take a holistic approach in the formulation of their business plans to adjust with existing market needs (Sharon, 2005).
The number of ethnic restaurants has grown considerably in U.S., known to encompass diverse workplaces for overseas employees. They account for 30% of the workforce, a ratio that connotes restaurant ownership as well. (Lee & Ha (2014) found out that one out of five restaurants owned by either Asian-Americans, Hispanic or other ethnic groups. In its pretext, the population of Asian-American has grown to approximately 15.1 million in the U.S. As per 2010 U.S consensus, Thai population was 237,629 with Florida accounting for 27,876 of Thai’s. A higher percentage live in Alachua County (Indexmundi, 2014).
Asian cuisine, predominantly Chinese and Thai food are increasingly popular and favourite among mainstream American consumers (Chandana et al., 2013). Thai-inspired sauces seasonings; soups and sushi are widespread in Florida and other states. Ethnic foods, Thai foods included are perceived healthier by the mainstream consumers. Terence (2013) states that authentic, exceptional and healthy foods are particularly popular with consumers, with most ethnic restaurants positioning themselves to meet such needs. The statistics indicate a potential growth for Thai Delicacies. Due to globalization and growth in multicultural populations, consumer tastes keep on broadening. Apart from its menu, Thai Delicacies will create variations by combining classical Thai ingredients and America’s favourite dishes (Shawn et al., 2013).
Thai Population in Alachua and Neighbouring counties (source) U.S Census Report 2010
Sales in the restaurant segment continue to rise over the years. 2014 sales projections indicate an increase of 4% from $756 billion dollars recorded in 2013. The steady increase in sales represents the 20TH consecutive year of real sales progression in the restaurant industry. The National Restaurant Association report indicates that sixty percent of restaurant customers enjoy dining more in ethnic-fused restaurants (N.R.A, 2010). The data also indicates that Americans spend up to 6% of their food budget in restaurants. Positive economic indicators signify growth in sales due to increasing in consumers’ disposable income. Thai Delicacies will take full advantage of this promising industry to offer fused, unique and authentic Thai cuisine (Yannis et al., 2009). Notably, full-service restaurant sales are estimated at a growth rate of 4.8 over 2013.
According to Sharon (2005), there are various eating trends among American people. They include; increase in health-conscious restaurant consumers, demand for meal variety, convenience of food restaurants and disposable income spent in food outlets. Emerging trends will be incorporated to meet consumer needs and benefit from the shopping patterns. Notably, flourishing economic growth leads to increasing in disposable income with trends showing more money is being spent on the food industry. On the contrary, the money spent exceeds the one spent on in-home meals. There has been a growth in take-away meals from restaurants. (Lee & Ha (2014) notes that not only does it allow the customer to enjoy a meal at home, or while travelling. It also allows the customer to eat high-quality meals that could take more time while preparing. In order to address such issues, Thai Delicacies will provide a window service and toggle boxes. Implementing a ‘drive thru service’, it will be able to increase its bottom line and make customers feel at ease.
Another significant trend has been an increase in convenience foods necessitated by Americans on-the-run mentality. For example, in Florida, rise in convenience foods have been facilitated by more women working, rise of single parent families and increase in disposable income among students and teenagers (David & Steve, 2007). Furthermore, metropolitan areas such as Alachua County in Florida spent more on taking way foods. Studies also indicate that restaurant consumers spent an average of $13 on take-away foods daily. Therefore, convenience meals require easy to clean-up, minimal waste and easy to prepare for any age group since they are eaten on-the-go (Clement, 2009). Thai Delicacies will provide convenient containers, disposable cutlery and paper napkins to satisfy this segment.
Additionally health and wellness remain integral in influencing consumption trends. Consumers concerns with their health standards leaning towards low-carbohydrate diets, vegetables, white meats and an interest in ethnic foods (N.R.A, 2014). Increased public awareness has necessitated this on healthy eating habits and diets and education on prevention of diseases such as heart diseases and obesity among others. Thai Delicacies will provide fresh juices and menu items that have low fats, calories and sodium to meet the needs of the consumers. Menu reviews to include vegan, gluten-free, baked choices and vegetarian meals will also consider. Moreover, special diet restrictions segment will express their preference through their waiter or special diet chef (Mahmood, 2014).
Thai Delicacies is expected to cater for a broad base of customers. Whereas we anticipate being patronized by a majority of residential and business customers, the restaurant will also be suited for students and tourists from Maritime Heritage museum. The Jacksonville Landing is known to host many social events, gatherings and retail stores. It provides Thai Delicacies with a high number of visitors and convenience. Thai Delicacies will encompass both low-high income earners and appeal to all markets that are, health conscious and care-free (Lee & Ha, 2014). The menu will offer options to both types of family households. Predominantly, the intermediate target market will be Thai’s living in Alachua. Alachua has a high percentage of Thai inhabitants compared to other states in Florida. Consequently, it will provide a sufficient customer base supplementing the predominance blends of family households, business people and industrial workers (Bryant, 1993).
The location for Thai Delicacies was carefully chosen because it encompassed market similarities of the target market. Alachua County has a population of 28,345 Thai’s according to the U.S census report of 2010. Other major employers in Alachua include the University of Florida, Shands hospital and Alachua medical centre among others. Patients, students and general workforce will provide a steady supply of customer base. Furthermore, they provide stable jobs to the residents with a median household income of $ 28,222. Such increases the amount of disposable income boosting the growth of Thai Delicacies. Moreover, Thai Delicacies will benefit handsomely from tourists visiting Maritime Heritage museum. The Jacksonville Landing is also known to host many social events, gatherings and retail stores.
The proposed location for Thai Delicacies occupies a few restaurants such as Ichiban Sushi, Leonardo’s Pizza, Relish and Reggae Shack Café. Most of the restaurants are fast foods, and a few are ethnic-theme based. Our direct competitors are Bahn Thai and Bento Café.
|Bahn Thai||Ethnic Thai||L.D||Lunch – $9.75-$ 13.65 Dinner – $6.5-$22.5||1.7 miles|
|Bento Cafe||Pan-Asian &Sushi||L.D||Lunch-$1.95-$9.25 Dinner-$4.5-$12.93||3.5 miles|
|Ichiban Sushi||Full-service||L.D||Lunch-$5-$15 Dinner-$5-$15||1.1 miles|
|Chick-Fil-A||Fast food||$3.5-$8.59||0.6 miles|
Table 1: Competitor Analysis
Production and sale of menu items will be conducted in-house through up-selling by waiters. Nonetheless, Thai Delicacies will invest in food delivery services managed by food delivery section depending on orders received and the nature of the business. Market research data by National Restaurant Association indicates that up to 50 million Americans request for home or office food delivery. Notably, chicken wings, pizza and salsa are constituting a large percentage in the delivery segment. Additionally, takeaway foods are a pre-requisite for event-goers and sports fans. Baitenova et al. (2013) states that convenience foods values since many customers lack cooking time and culinary skills especially the baby boomers generation.
The growth of smartphones has greatly impacted restaurant technology. Studies indicate that many restaurants are adopting smartphone features in terms of order placement or menu items research (Kim & Murat, 2010). Majority of competitors depend on telephone calls for order placement and menu inquiry. Thai Delicacies will subcontract Kyra InfoTech to design Thai Delicacies website and Thai smartphone app. The smartphone app will facilitate information such as ordering options, nutrition, restaurant reservations, location and direction. Also, loyalty and rewards programs will be incorporated to entice and lock-in customers. It will provide a competitive edge over competitors and a great means of convenience. Alternatively, in relation to ethical and moral issues, Thai-ethnic restaurant such as Bahn Thai carry false advertisement in regard to some menu items that lack authenticity of Thai cuisine (Woods et al., 2013).
Thai Delicacies will seek intellectual property services from Kain & Associates. They will advise accordingly in relation to patents, false advertising, trademarks, and copyrights. Moreover, trade secrets, unfair competition and defamation issues will also be taken care. Intellectual property rights filed at Division of Corporations, Florida State. Corporate tax are charged at 5.5% (Indexmundi, 2014). Thai Delicacies will need to apply for licenses and permits that include general business license and alcohol beverage license. Permits include food service establishment permit and food safety permit. In relation to environmental liability, a permit will be obtained from Florida Department of Environmental Protection to certify all requirements meets (Preston, 2012). Worker’s compensation insurance will also meet as per the Florida State laws.
Thai Delicacies will offer a diverse array of differentiated menu items to cater for different customer needs. Thai Delicacies brand salience which is an integral attribute of brand equity will base on three key elements of target consumer, customer benefits and competitive position frame (Baitenova et al., 2013). Menu differentiation enhances perceived the quality of the products and is mostly upon customer’s perception. Thai Delicacies will offer menu items Thai authentic dishes, Thai-American fused menus, healthy menu items and special diets according to guests’ preference.
Under its differentiation strategy, Thai Delicacies will achieve perceived quality of its menu items through adding unique and distinct values to the menu. Thai Delicacies will use different promotional and advertisement approaches to maintaining and communicate on the unique attributes of the brand. Its strategy to synchronize brand equity attributes, competitive and differentiation advantage with consumers’ perceived quality will be far reaching (Norzuwana, 2013). Furthermore, it will ensure low switch cost for consumers.
Thai Delicacies aims to achieve clear positioning by means of strategic advertisement and use of cultural relevance messages. Moreover, strategic promotional campaigns with tag lines such as; ‘Fast and convenient’, ‘Have it your way’ and ‘Thai Delicacies, welcome home’ will run on radio (The Sky, Wind FM), television (PBS) and social media platform. Additionally, it will help in creating virtual connections with the brand. Prominently, this results to increased business, clear positioning, brand awareness and creating positive consumer purchasing behaviour and attitude (Clement, 2009). The positive consumer behaviour will enable the brand traverse beyond associations, unearth push-pull relationships and move beyond borders with the customers becoming true agents of change.
Involvement in community initiatives can enhance consumer emotional connection with the brand. Thai Delicacies will partner with Porters Community Farm in building gift gardens to supplement local’s income and foster sustainability. Residents will consider Thai Delicacies as a family-friendly brand. Moreover, it will be a contributing factor in creating strong brand presence in the market, lock-in consumers and increases brand value. In a nutshell, such innovative strategies build lasting impressions in the mind of customers. The overall effect is that it enhances brand image, recognition, association and salience. Into the bargain, Thai Delicacies will also receive support and cooperation from communities and trade partners (Chandana et al., 2013).
Thai Delicacies located at Jacksonville Landing, Gainesville adjacent to Riverfront mall near the University of Florida and Maritime Heritage Museum. The area has excellent road networks and connection increasing customers’ access. Florida has an unemployment rate of 6.2% although the rate for high-skill to low-skill jobs is favourable to Thai Delicacies. The minimum wage earning in Florida is $ 7.93 per hour. In relation to Thai Delicacies, tipped employees such as waiters, restaurant hostess have minimum wage of $4.91 per hour plus tips. Any work accomplished after 12 hours equal double pay while work in excess of 3hours after normal 8 hours of working constitutes to one and half pay (Preston, 2012).
Gainesville’s proximity to suppliers and customers is a benefiting factor to Thai Delicacies. Notable suppliers include Thai food suppliers such as Eastern market, Indian spices and Lee’s produce. Fruits and vegetable suppliers include Ward’s Super Market and Alachua County Farmers. Moreover, sea fish and seafood suppliers include Fresh Lobster Company, West Coast Seafood Meat and Northwest Seafood Inc. Kuratko (2013) states that differentiated supplier options enhances productivity reduces costs and reliability. Moreover, presence of Riverfront mall, the Maritime Heritage Museum and University of Florida as well as events and gatherings at Jacksonville landing will present many customers. The zoning Verification obtains from the Planning and Zoning Department and 5.5 corporate tax collected by Alachua County Tax collection department.
Thai Delicacies commitment to green practices embroils in the sustainability commitment statement. Its sustainable performance will base on three indicators namely; economic, environmental and social indicators. Benefits accrued from sustainable practices are far-reaching since customer choices of a restaurant basing on the green image. Duarte et al. (2013) state that such practices evoke green purchasing behaviour among customers. Thai Delicacies will implement initiatives such as an eco-garden that produces spinach, broccoli and pak choy that will supplement vegetarian and vegan options.
Additionally, it will use take-away containers that are biodegradable, solar panels that will help in lighting and running energy efficient dryers. AS well, proper container labelling with biodegradable waste used as manure in eco-gardens. In future, Thai Delicacies will implement low carbon discount program to reward customers that either bike or walk to the restaurant.
In the case of economic performance, Thai Delicacies will ensure that tax return reports filed, employee benefits paid, and all suppliers paid. Under social performance, Thai Delicacies will partner with Porters Community Farm in building gift gardens to supplement local’s income and foster sustainability.
Tim Nelson and Hillary Sanders will be the managing partners of Thai Delicacies. Tim will be in charge of managing the restaurant while Hillary will be in charge of marketing and guest relations functions. Tim N. has vast experience in restaurant operation and also worked as restaurant manager at McDonalds. Tim has also worked for Pailin Thai Cuisine restaurant in Los Angeles as a supervisor. He has a degree in Tourism and hotel management and a diploma in restaurant operations at Rosen College. As well, Hillary Sanders worked as sales and marketing manager at Burger King. Hillary also worked as a reservations manager at Luxury Thailand Tours. Their vast wealth of experience will enable them run the restaurant successfully.
The achievement of any business depends on sound management. The management team main works to drive and execute the plan. Managers should possess skills, experience, proper planning and coordination of efforts since cost control, managing employees and servicing customers requires experience and talent (Kotas, 2014). The manager is accountable for the management of the entire restaurant operation. The manager is mandated to formulate the standard operating procedures and should make sure there is compliance with company policies and regulations. All times, the manager must have a keen eye on smaller details which always have a big influence on the operation of fast foods restaurant (Regina & Joseph, 2010). The main objective of the manager is to ensure the customers are satisfied both with quality food and service. The manager will also be responsible for staff recruitment, hiring and firing. Other responsibilities include making of the budgets, schedules and inventory, payroll and authorising purchases.
The restaurant will have two supervisors and one restaurant manager who will report directly to the General Manager. They will ensure smooth running of the restaurant through motivation and support of staff underneath them. The supervisors will also ensure customers are satisfied through solving customer complaints at hand, and they will also at busy times carry out the same duties as their juniors. The supervisors will also deal with allocation of duties and making of duty rota.
The executive chef will be responsible for designing menus, recipes, portion and cost control (John & Dan, 2003). Furthermore, the chef will also oversee training of staff, cleanliness and sanitation as well as food purchasing. The executive chef is supposed to ensure food costs are properly controlled to achieve the targeted revenue and profits. Continuous innovations of the menu to cater for the ever changing customers’ needs and wants so as to stay viable in the market. The executive chef should have a minimum of five years’ experience in a busy Thai-themed restaurant, holding a similar position. Preferably, the executive chef should be a graduate of Bangkok Cooking Academy.
Thai Delicacies will employ a minimum of 20 employees to a maximum of 30 employees. In some cases, casual labourers’ will be utilized when work projections are expected to be high. They payment on a pro-rata basis at a minimum wage of $7.9 as per Florida standards. Job selection method will entail interviews and role plays to be able to get highly qualified personnel. Candidates will be chosen based on their merit as per pre-defined set of standards. Background checks conducted for designated positions. Recruitments through referrals, social media and advertisements in the Gainesville sun. Shift schedules will be organized by departmental heads in a way that it offers reliable labour cost control.
|Position||Full Time||Part Time||Pay Range|
|General Manager||1||$2,000-$2,500/per month|
|Sales &marketing/Guest relations||1||$,1900-$2,200/per month|
|Executive Chef||1||$2,000-$2,200/per month|
|Restaurant Manager||1||$1700-$2,000/per month|
Table 2: Thai Delicacies expected staffing levels
Training be done in-house by departmental heads namely; Executive chef training the cooks while the restaurant manager will be in-charge of the waiters and barristers. During training, appropriate check-lists will be distributed to the staff to enable them pay attention to details (Kuratko, 2013). Training materials and instructions will be distributed to enable Thai Delicacies become a successful restaurant. Training materials and instructions will be customized to reflect the exceptional of Thai Delicacies. Areas of concern will be how to manage total quality, excellent customer service, job functions and safety. Needs evaluation and assessment will be carried out to find if it necessitates for external training services.
From the market research conducted, the average selling price per unit is $7.6 in comparison to our immediate competitors, Bento café and Bahn Thai. Most expensive menu item on Bento café is Bali Hai mango at $9.50 while Sushi Rice and Miso soup cost $1.5. Alternatively, at Bahn Thai the most expensive menu item is Panang Curry/ Masaman Curry at $15.95 while Tum Kha soup costs $3.50.
Average selling price = Average price at Bento café + Average price at Bahn Thai÷2
Expected Revenue per day
After a few visits at Bahn Thai, lunch service is usually 52% seat capacity while dinner is 60% seat capacity. Thai Delicacies projected seat capacity at lunch hour will be 65% while dinner will be 75%. Thai Delicacies can seat 80 guests comfortably. The estimations based on the benefits accrued from the location of Thai Delicacies that has many social events and gatherings, retail shops and tourist from the museum.
Expected revenue at lunch time:
= Total no. of guests expected× average price× seat turnover
= (80×65÷100) ×$7.6×2
Expected revenue at dinner time:
= Total no. of guests expected× average price× seat turnover
= (80×70÷100) ×$7.6×3
Total expected revenue in a month= (22,131.2+35,750) ×28 (average of 28 days)
For any profitable restaurant, food cost should be kept between 28%-32%. Thai Delicacies is expected to operate at a food cost of 30% making sure we do not compromise on quality. Total costs are expected to reach 70%.
Average unit cost= $(70×7.6÷100)
Variable cost= $(30×5.32÷70)
Fixed costs= $(40×5.32÷70)
Gross margin=Selling price per unit-variable costs per unit
Net margin= Gross margin per unit-fixed costs per unit
|Projected Income Statement|
|Year 1||Year 2|
|Salaries and Wages||20,600||28,000|
|Music & Entertainment||1,500||1,500|
|Maintenance and repairs||1,500||3,000|
|Loan Payment Interest||1,200||1,800|
|Net Profit Before Taxation||161,230||177,702|
|Net Profit After Taxation||152,362||167,928|
|1. Purchases are calculated at 71% of the total sales.|
|2. Tax is charged at 5.5% of the total income.|
|3. Loan payment interest to be charged at a constant rate of $1,800.|
|Projected Cash Flow Statement|
|Cash on Hand||30,000||53,890||40,662||42,723|
|TOTAL CASH RECEIPTS||100,000||28,898||44,000||46,100|
|TOTAL CASH AVAILABLE||130,000||82,788||84,662||88,823|
|CASH PAID OUT|
|Salaries and Wages||300||2,300||2000||2000|
|Music and Entertainment||0||150||150||150|
|Maintenance and repairs||0||200||200||200|
|Loan Payment Interest||0||150||150||150|
|Loan Principal Payment||0||2,000||2000||2,000|
|Other start-ups costs||15,000||0||0||0|
|Total Cash Paid Out||76,110||42,126||41,939||42,239|
|1. Cash Flow statement Notes:|
|2. Purchases are calculated at 71% of the total sales.|
|3. Tax is charged at 5.5% of the total income.|
|4. Loan payment interest to be charged at a constant rate of $1,800.|
|Sources of Funds||Investment Type||Amount|
|Hillary Sanders||Capital Contribution||$300,000|
|Tim N.||Capital Contribution||$300,000|
|Bank Loan||Loan Contribution||$400,000|
Return on Investment= Net profit ÷ Total investment
Payback period= Investment ÷ Annuity amount (Average cash flow per year)
Gross margin=Gross profit ÷ Net sales×100
Net Profit margin=Net income ÷ Net sales
Break even analysis=Fixed costs ÷ Gross per margin unit
=$ (35,970÷12) ÷5.32
= 564 meals should sell per month to break-even.
Risks in the business setting in its very nature is challenging to ascertain and quantify. In any business, critical risks are corroborating to be real and not an implausible thought. In scholarly spheres, critical risks are predominantly based on the fact that risks implicate uncertain outcomes of well-known predictions (Carol & Lisa, 2012). Prominently, examining and instituting strategies to address such concerns is vital in ensuring Thai Delicacies remains viable and competitive in the market. Kuratko (2013) states that risks prowl at any moment and, as a result; it calls for strategic problem-solving and decision-making strategies. All the above risks should be well managed in order to maximize on opportunities and curtail on losses. (Duarte et al. (2013) call for proactive thinking and a strategic response that are integral in planning for critical risks.
Thai Delicacies will encounter various obstacles and risks. Notably, emergence of low-cost menu items by competitors, fast foods and unexpected expenses may offer challenges to Thai Delicacies flourishing. Stiff competition offer unconducive environment for survival of Thai Delicacies. Other notable obstacles are vulnerabilities brought about by food poisoning, low income and volatile market prices and conditions (Woods et al., 2013). Alternatively, operational risks such as poor management decisions may lead to complete interruptions in functioning of Thai Delicacies. Other tactical risks and problems may include currency instability, new strict laws, unexpected competitors’ strategies, frivolous lawsuits, new market entrants and unfavourable trends in the market.
To leverage their risks, the Thai Delicacies aims to adopt a winning risk management system that supports their business in becoming resilient, trustful and successful (Clement, 2009). Importantly, much emphasize lies on risk management and internal controls in leveraging obstacles and risks. Course of action adopted by Thai Delicacies intends to shield them from potential problems that prowl at any moment. As an alternative course of action, Thai Delicacies aims to protect the following:
Some of Thai Delicacies alternative course of action include:
Thai Delicacies appealing menu, serene atmosphere and customer-friendly prices will attract a wide market base. Thai Delicacies will be concerned with the fulfilment of payback and return on investments objectives and gain profitability. Such does not limit Thai Delicacies to expansion opportunities. Nevertheless, Thai Delicacies business strategies, systems and controls offer strategic positioning to deal with expansion opportunities (Williams & Eliza, 2010).
After five years, Thai Delicacies will be sold to maximize on the value of the business and venture into more challenging tasks. With a repayment period of 2.9 years, Thai cash flow and profitability look promising. Selling outright in business circles (Kotas, 2014) is considered as an easy exit. To gain more proceeds from the sale, it will ensure that it creates a strong customer loyalty base, high tangible assets, potential to grow and profitability (Mahmood, 2014). Business valuation will be conducted to make sure the gains are substantial. Two exit options; outright sale or negotiate for equity. Equity negotiation is beneficial since it earn dividends.
Thai Delicacies milestone schedule identifies and prioritizes specific needs to enable the management meet its objectives. Follow-up meetings will be conducted to deliberate on any variations and course of corrections (John & Dan, 2003). It will ensure the business is a line with actual realities.
|Milestone||Start Date||End date||Budget||Manager||Department|
|Meeting & Evaluation||20/10/2014||15/11/2014||$80||Hillary||Administrative|
|Contractor Bid meeting||30/10/2014||15/11/2014||$200||Tim||Maintenance|
|Website & Thai app Development||02/11/2014||18/11/2014||$300||Hillary||Marketing|
|Menu Design & Testing||24/10/2014||04/11/2014||$100,000||Executive Chef||Food & Beverage|
|Evaluation and research||28/1/2014||04/11/2014||$80||Hillary||Administrative|
|Business plan outlay||25/10/2014||05/11/2014||$70||Tim||Administrative|
|Trademarks & Patents||04/11/2014||10/11/2014||$100||Hillary||Administrative|
|Licences and permits||10/11/2014||10/11/2014||$150||Tim||Administrative|
|Build-out and renovation||30/10/2014||20/11/2014||$100,000||Tim||Maintenance|
|Purchase of equipment, furniture& fittings||06/10/2014||04/12/12||$300,000||Hillary||Administrative|
|Meeting with Suppliers||10/11/2014||30/11/2014||$200||Tim||Food & Beverage|
|Staff Test/Pilot project||06/12/2014||11/12/2014||$350||Tim||Food & Beverage|
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