Bbs302 | Establish A Business Assessment Answers

Produce a business plan for a hypothetical business you might like to establish. This should be a small business in scale and should be of your own design. While your business may be similar to other established businesses it must not be a franchise. For purposes of this assignment the business should also be a physical one and not purely online.

Introduction

The business planning refers to the development of strategy and approach that will help to meet the objective with actions. The establishment of new business requires consideration of different factors and operational activities that help to develop a sustainable plan to attract the target customers and involvement of things that are in demand (Hawkey, 2017). The current business plan is about establishing a new business venture of Indian food restaurant in Melbourne city. The business planning report will focus on philosophy, products and services, marketing, staff and financial aspects by conducting the internal and external analysis of the business market. Moreover, the business planning report will define the location for the restaurant as well as develop the organizational and personnel plan to improve the sustainability of the restaurant. The marketing is an important element for establishing the new business venture; the report will develop the promotional plan for the restaurant.         

Part 1: Introduction

Business philosophy

The restaurant business is having good scope and opportunities to grow in Melbourne city. The planning for new business of the restaurant is based on the needs and demand of food and other services which anticipated by the people in particular area. The management team of restaurant planning will focus on those needs of local people as well as consider the demand of visitors to gain the competitive advantage. By creating a sense of anticipation and sense of community are two critical success factors of opening with momentum from the start (Scarborough, 2016). The name of the restaurant will be Family that is easy to remember and create an emotional appeal for people to come and enjoys the food. The mission statement of the new restaurant business is as follows:

Ensuring that better food prepared from whole, unprocessed ingredients is accusable to everyone.   

The management team will try to explore the new approach and dishes for attracting the people. Moreover, the management will focus on Indian food with international spices that support to improve the taste and provide a new look to the food culture of the city. The approach of the management team includes the traditional values and culture (Morden, 2016).

Products and services

The restaurants are basically famous for their vanity of food and taste that offered to the customers. The development of the menu is one of the critical processes for new business management. The planning of the new Indian restaurant in Melbourne has required the involvement of best Indian food with international spices which help to attract the people and help the organization to gain the competitive advantage (Fuller, 2016). The major food products of Family restaurant will involve following:

Table 1: Products and charges

Chicken Tikka Masala	$ 60
Biryani	$ 45
Kebabs	$ 40
Dosa	$ 30
Naan	$ 15
Palak Paneer	$ 40
Dal Makhni	$ 35
Paneer butter masala	$ 50
Chicken butter masala	$ 65

 

The management team will try to maintain the optimum cost of these products at the initial stage to generate the leads and gain the attention of the target customers. The services part of the organization will involve online book of tables and food order to minimize the time of food preparation and serving to the customers. This kind of services will also help to improve the customer relation and feedback collection from the clients. The estimated price of these products is according to middle class and students that are willing to have good Indian food in the city. The optimum pricing will support to improve the customer base at the initial stage. The proposed selling of food products is 150 units of each in the month. This will help to maintain the operational and fixed cost of the restaurant. In addition to this, the management of restaurant will offer free Wi-Fi services for customer to engage them.

Self analysis

The planning and establishment of food restaurant business are beneficial for me as I have worked in the hotel industry for 2 years and had good interaction with the customers and gained the knowledge about their expectation and needs. I have noted down the feedback from people regarding taste, quality, and prices for products and services. From the experience and interaction with the management staff and customer, I have decided to open the restaurant by considering the demand for Indian food in the city. People like the Indian spices and food that cooked with them. I have taken this idea by working at the hotel as people were demanding the pure Indian food. However, there are various food restaurants that are offering quality Indian food but some are not using the real spices from Indian or others are quoting high prices.

I have done hotel management course and have good experience of working in hospitality and food organizations that have helped me to choose the particular areas to start the business. I have contact with suppliers and people who can contribute to the establishment of the restaurant business plan. The knowledge about computer and internet functions will help to develop the plan and analyze the market conditions to achieve the goals and objectives. Moreover, I have the good team working and creative thinking skills that could help in the implementation of the plan and meet the specifications.

Part 2: Marketing research

Secondary research

1. Geographical data:

The city that has been chosen for opening the restaurant is Melbourne. This is one of the largest cities in Australia that have good potential for every kind of business. The population of the city is around 5,000,000. The population is having own business and working class (Market research Australia, 2018). The people are having a good sense of food and look for creative and new places. The management has decided to establish a business in Southbank area which is popular for good food and high street market.

2. Demographic data:

The food business is for all types of people, the management will target all type of people by offering the Indian food with real taste and spices. The management team collects the data about the choices of people and particular demand for food. This is a fully Indian food restaurant and offers the food for all people. The age, gender and marital status will not have any specific impact on the business of food. But the income level is having a direct association with food as people go out for having food according to spending capacity. The geographical location that selected for starting the business has a good footfall of people. Southbank area has good market and infrastructure that attract the people of all age and income (Demographics of Southbank Melbourne, 2018). According to analysis, the 63.3% people are local, 3.4% from the UK, 2.7 % from India, 2.3% from China and 1.7% are from New Zealand. The population of Indian in the city is about 161, 078 which is good for the new restaurant opening.  The management team is looking to target the people who are from Indian Sub-continent and a large amount of that population belongs to this area.

Figure 1: Area of establishing business

Primary research

For primary research of market of Southbank the selected location for opening the restaurant, the random sample of 30 people was selected to fill the questionnaire. The finding of survey is beneficial for planning the restaurant and managing the products and services accordingly.

Demographic information:

Name:

Age:

20-25 years

25-30 years

30 years and above

Age	Frequency	Respondents
20-25 years	40%	12
25-30 years	20%	6
30 years and above	40%	12
Total	100%	30

Gender:

Male

Female

Gender	Frequency	Respondents
Male	70%	21
Female	30%	9
Total	100%	30

Questionnaire

Theme 1: Do you like Indian food	Frequency	Respondents
Agree	40	12
Strongly agree	40	12
Disagree	20	6
Strongly disagree	0	0
Total	100	30

Theme 2: Have you tasted Indian spices	Frequency	Respondents
Agree	20	6
Strongly agree	10	3
Disagree	40	12
Strongly disagree	30	9
Total	100	30

 

Theme 3: Have you find good Indian restaurant in your area	Frequency	Respondents
Yes	30	9
No	70	21
Total	100	30

Theme 4: Do you want good Indian food in your area	Frequency	Respondents
Agree	50	15
Strongly agree	30	9
Disagree	10	3
Strongly disagree	10	3
Total	100	30

Theme 5: Does the prices of Indian food is high in your area	Frequency	Respondents
Agree	40	12
Strongly agree	50	15
Disagree	10	3
Strongly disagree	0	0
Total	100	30

Theme 6: Will you try new restaurant for Indian food	Frequency	Respondents
Agree	50	15
Strongly agree	40	12
Disagree	10	3
Strongly disagree	0	0
Total	100	30

Competition

1. Direct competitors:

There are various food restaurants in the identified area of Southbank Melbourne that are offering the similar kind of foodstuff to the customers. The major competitors for new Family food restaurant are Eureka, Circolo, Meiba restaurant, ENA, Arts Center, Kebab Republic and Tejas Morden Indian restaurant. These are offering good food at optimum prices. The management of Family restaurant needs to consider the quality and services according to the competitors in the particular area. The Kebab Republic and Tejas Modern are offering good Indian food with high quality that might create the issue for the new restaurant in a particular area as people like the taste and quality offered by them (Top ten restaurants in Southbank Australia, 2018). Moreover, these restaurants are having a good brand reputation and positive image in the market that also influences the decisions of customers to choose the Family restaurant over them. 

2. Indirect competitors

In the current scenario of the food business in Melbourne city, the online food services and fast food chains are having the indirect impact on the new and existing business functions. The fast-food chains like KFC, Subway and Mc Donald’s are very famous in the country and offering the quality food at optimum prices that have an indirect impact on the sales of family restaurants that are offering proper food in Indian style. Moreover, UBER has started a home delivery option for food that is also a big threat and challenge for new food organization to create a place in the market. UBER application is providing the facility of booking the food from selected restaurant and delivery. This kind of approach is adding more convenience for the customer to get the desired food at home. The fast food industry is growing with rapid speed as working and business class people are giving preference to these ventures for food (Fuller, 2016).

Now to deal with such direct and indirect competitors, the management of Family restaurant will develop the strategy that involves proper use of Indian spices and culture. The Family restaurant will plan the emotional marketing appeal for creating the awareness about the brand and products of Indian food. This kind of approach will help the new organization to attract the customers and gain the competitive advantages at the initial stage. Moreover, the restaurant will also involve fast food based on Indian tradition in the menu to attract the customer and look to establish the network of delivery at nearby locations (Food business planning, 2018). This will help to maintain the effectiveness and meet the business objectives.

Market segmentation

Based on the previous research of geographical and demographical factors for choosing the area of business for Family restaurant, the management has decided to choose the middle and upper-middle-class people from Indian sub-continent. The restaurant will offer proper Indian food with quality spices and taste of Indian kitchen, by considering that fact the management will target the Indian population of the selected area. The population is having own business and working class (Tanner and Raymond, 2015). The people are having a good sense of food and look for creative and new places. Southbank area has good market and infrastructure that attract the people of all age and income. The population of Indian in the city is about 161, 078 which is good for the new restaurant opening. By considering this information from past research, the organization has decided to target the Indian upper and middle-class people.

Potential location

For the business of Indian food, it is essential for management to decide a specific location that has a good market for their products and services. The city that has chosen for opening the restaurant is Melbourne. The management has decided to establish a business in the Southbank area which is popular for good food and high street market. The management team is looking to target the people who are from Indian Sub-continent and a large amount of that population belongs to this area (Phillips, 2016). The management will try to start the business in rented property as the budget for business planning is not much high. The restaurant management will select the location near the mall and set the timing from 11 am to 11 pm. However, the chosen location of Southbank is good for establishing the business but parking will be big issues. The management is still working on this problem and contacting the nearby people to provide some space. The transportation system at Southbank is strong and good as customer and staff members can easily come to the restaurant. The area is safe and rated as the high street market of Melbourne city.

Part 3: Organizational and personnel plan

Ownership choice

For the new business of Indian food in Southbank at Melbourne city, the management of Family restaurant has selected the sole proprietorship ownership. A sole proprietorship is the simplest business structure in which one person is the owner and operator of the business. There is no legal distinction between the business and operator as the owner has direct control of the activities and accountable for all its debts (Venter and et al., 2015). The major advantages of sole proprietorship business ownership involve easy handling by developing the structure, less paperwork and conflicts of cost and hiring strategy and provide the tax benefits to the owner. The sole business ownership is cheap and does not increase the cost of opening the business. Moreover, the sole proprietorship can provide the opportunities for others to start their business by haring for managing the business functions. The biggest advantage of the sole proprietorship is direct control over the operations of the new restaurant as the owner has all rights of making the decisions and provides the freedom to drive the business according to their capabilities and desire (Armstrong and Taylor, 2014). Hence, the Family restaurant management will select sole proprietorship for new business planning and implementation.

Personnel needs

Figure 2: Organizational structure

The personnel need of new restaurant business will involve management staff for different operations. The owner has all control over decision making and reviewing the tasks according to plan. The Manager will be reporting to the owner about issues and further requirements to meet the goals and objectives and craft improvement in the product and services section. The manager will supervise the kitchen, financial, customer services, supplier and technical staff (Bratton and Gold, 2017). The manager will be responsible for offering the guideline and support to manage the activities and maintain the standards as per the culture of Family restaurant. The second line managers will report to the manager about issues and requirements as per the role and responsibilities to maintain the functional operations according to structure.

Hiring strategy

The hiring of staff is one of the important aspects of business planning that helps to improve the effectiveness of the organization and support in growth. The hiring strategy of Family restaurant for Indian food would be based on the collection of application through online methods and after scrutiny of qualified candidate, the interview will be conducted. For manager and customer services staff, the owner will take the interview to analyze their effectiveness and quality to operate the business (Brewster and Hegewisch, 2017). For kitchen and technical staff, the direct interview will be connected by publishing and notification of hiring in the newspaper. This kind of strategy will be less costly and time consuming for the owner to choose the qualified candidate for business.

Table 2: Salary and position

Position	Salary (Monthly)
Manager	$ 1200
Kitchen staff	$ 800
Financial manager	$ 1000
Customer services staff	$ 750
Security	$ 650
Technical staff	$ 650

Part 4: Marketing plan

Product and service plan

The products and services that Family restaurant will maintain involve typical Indian food that will be cooked in real Indian spices. The major products and services of restaurant will involve Chicken Tikka Masala, Biryani, Kebabs, Dosa, Naan, Palak Paneer, Dal Makhni, Paneer butter masala and Chicken butter masala. The management will try to offer these products as per the traditional approach of Indian cooking standards. The services of restaurant will involve free Wi-Fi and light color interior based on the Indian theme (Perreault and et al., 2015).

Pricing policy

The pricing strategy that the organization will adopt for the new business start-up is penetration pricing. According to this pricing strategy, the organization will lower the prices of products and services at the initial stage to attract the customer that will support to increase the customer volume. The penetration pricing is beneficial for the new restaurant as it will help to attract the customer and engage them by providing the high-quality food and services (Armstrong and et al., 2015). Moreover, the organization will provide the discount for prior booking and order the food through online sources. The management will not look for profit at the initial stage as competition is high and priority to create the place in the market by attracting more customers.

Promotional plan

The promotion and advertising strategy of Family restaurant products and services will involve online and traditional both sources. The promotional campaign of the organization is majorly focused on creating the emotional appeal for Indian food. The online marketing content of organization will highlight the process of developing and serving the Indian food by using the real Indian spices. The social media tools like Face Book, Twitter and Instrgram are major sources for offering the information about the restaurant and creating the awareness about the products and services. The offline marketing tactics will involve sponsorship and advertising through newspaper and magazines that have content related to food.

Place

The place that will be selected for opening the restaurant is near the mall and have a good customer footfall. The interior of the restaurant will be based on Indian culture theme and provide the traditional services functions. The customer services staff will offer food products and other information directly to customers at their table. The direct distribution strategy will be used for managing the service at the restaurant that will support to understand the needs and expectations (Schmidt and et al., 2014).    

Part 5: Financial plan

Table 3: Profit and loss statement

The Family restaurant
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31/03/2019
			In $
Particulars	Note	31-03-2019	31-03-2018
Revenue from operations	12	2,00,00,00	1,80,00,00
Other income	13	20,00,000	18,00,000
Closing Inventory		13,00,000	7,00,000
Total Revenue		2,33,00,00	2,05,00,00
Expenses
Purchase of Stock		1,60,00,00	1,35,00,00
Opening Inventory	15	7,00,000	8,00,000
Employee benefits expense	16	25,00,000	22,50,00
Depreciation	17	3,50,000	3,88,889
Other expenses	18	8,00,000	6,75,000
Total expenses		2,03,50,00	1,76,13,88
Profit before Taxes		29,50,00	28,86,11
Tax expense:
Current tax		8,85,000	8,65,833
Profit/(loss) for the period		20,65,000	20,20,278
Earnings per equity share:
Basic		21	20

References

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.

Brewster, C. and Hegewisch, A., 2017. Policy and practice in European human resource management: The Price Waterhouse Cranfield survey. Taylor & Francis.

Fuller, G.W., 2016. New food product development: from concept to marketplace. CRC Press.

Hawkey, J., 2017. Exit Strategy Planning: Grooming your business for sale or succession. Routledge.

Morden, T., 2016. Principles of strategic management. Routledge.

Perreault, W.D., Cannon, J.P. and McCarthy, E.J., 2015. Essentials of marketing: A marketing strategy planning approach. McGraw-Hill Education.

Phillips, A., 2016. How books are positioned in the market: Reading the cover. In Judging a Book by its Cover (pp. 41-52). Routledge.

Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management. Pearson.

Schmidt, K.M., Spann, M. and Zeithammer, R., 2014. Pay what you want as a marketing strategy in monopolistic and competitive markets. Management Science, 61(6), pp.1217-1236.

Tanner, J. and Raymond, M., 2015. Principles of marketing. University of Minnesota Libraries Publishing.

Venter, P., Wright, A. and Dibb, S., 2015. Performing market segmentation: a performative perspective. Journal of Marketing Management, 31(1-2), pp.62-83.

Online

Demographics of Southbank Melbourne, 2018 [Accessed through] https://www.melbourne.vic.gov.au/SiteCollectionDocuments/demographic-population-infographic-southbank.pdf> [Accessed on 29 August 2018]

Food business planning, 2018 [Accessed through] < https://www.foodsafety.com.au/resources/articles/everything-you-need-to-know-about-starting-a-food-business > [Accessed on 29 August 2018]

Market research Australia, 2018 [Accessed through] <https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-food-services/restaurants.html> [Accessed on 29 August 2018]

Top ten restaurants in Southbank Australia, 2018 [Accessed through] < https://www.tripadvisor.in/Restaurants-g255100-zfn7811786-Melbourne_Victoria.html> [Accessed on 29 August 2018]