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BUSINESS PLAN FOR THE TRADITIONAL HOME-STYLE RESTAURANT
TRADITIONAL HOME-STYLE RESTAURANT
Ownership
The restaurant will be owned by Mr. Ken. I began this restaurant career at the age of 18 working in a quick-service food service operation and earned my way through National Diploma as a server and bartender. After earning my ND, i worked for a regional restaurant chain and an independent fine dining restaurant. In these organizations i held the positions of Assistant Manager and then General Manager. During my one year IT, i was employed by a local chain restaurant and then at a Five Star Hotel in Abuja.
Company Description
The Traditional Home-Style Restaurant will be located at Area 3, Garki Abuja Nigeria. The restaurant will be wholly owned and operated by Mr. Ken. The restaurant will serve a variety of classic home-style favorites from pot roast and mashed potatoes to patty melts and vanilla ice cream.
Executive Summary
The Traditional Home-Style Restaurant (“THR”) will be a moderately priced 86 seat restaurant offering family style food and service. Broasted chicken, pot roast, steaks and pork chops along with classic hamburgers, wraps and generous salads are all on the menu. We will offer specialty selections including a lighter options and smaller portions for a children’s menu.
The restaurant will be family owned and operated by Mr. Ken. Together they have over 25+ collective years experience in the restaurant and catering industry.
The THR will be leasing a 3,400 square foot space located Area 3 Shopping Center, an existing retail center located in Garki, a suburb in Abuja,Nigeria. The site was previously leased as an Africa Restaurant. Although the location was previously utilized as a restaurant, the former tenant removed the majority of the furniture, fixtures and equipment which will need to be replaced. The location will also require some additional renovation to update the lavatories and increase table space in the dining area.
The décor will feature wood accented chairs with blue and white checked table cloths. Dinner style tables will be surrounded by wooden chairs with comfortable seating cushions.
Sales projections assume 1700 customers per week resulting in weekly sales of just over N19,777, or N1,028,000 annually. This equates to around N302 per square foot in sales annually which positions THR as a highly desirable concept for ownership in a table service market where N200 to N325 per square foot is considered moderately profitable and therefore a good investment. Total start up costs will be N363,000, N174,000 of which will be contributed by the owners and the remainder will be secured by a proposed bank loan.
Business Objectives
The primary objectives of the business plan for Restaurant are below:
• To be the premier home-style restaurant in Area 3, Abuja
• To provide quality meals at reasonable prices with exemplary service
• Achieve Cover ratios of 1.00X at each lunch and dinner serving
• To achieve Prime Cost Ratios lower than 65%
Mission Statement
Our Mission is to provide a unique and relaxing dining experience – similar to dining at home. We will strive to achieve this goal by:
1. by providing menu items incorporating quality ingredients at reasonable prices, and
2. we will be mindful of the well being of our customers and staff– treating each and everyone with dignity and respect – just like we would at our own home!
Our Motto: Customer Satisfaction Guaranteed
Our Service
Provide the warm and friendly service expected from a family-style restaurant creating an informal, comfortable environment which will make the customers satisfied and want to return again and again. The restaurant will be open 7 days a week with hours as follows:
Monday 11:00 am – 9:00 pm
Tuesday 11:00 am – 9:00 pm
Wednesday 11:00 am – 9:00 pm
Thursday 11:00 am – 9:00 pm
Friday 11:00 am – 10:00 pm
Saturday 11:00 am – 10:00 pm
Sunday 12:00 pm– 5:00 pm
Start-Up Summary
The cost to open the restaurant is N363,000. The majority of the expenses are in furniture fixtures and equipment totally N110,000. The location requires some build-out and renovation totally N50,000 and will require approximately 30 days to complete. The Agbo will sub-contract the work themselves.
N175,000 of the start-up costs will be funded by the owners. The owner’s source of funds is a combination of liquid assets and marketable securities, primarily from their existing catering business.
Financial Plan
The following sections outline our financial plan:
• Required Cost of Start-Up
• Profit and Loss
• Cash Flow
• Balance Sheet
• Financial Ratios
• Hourly Labor Costs
• Weekly Sales Projections
Important Assumptions
• Meal Price range from N1000.00 – N1500.00
• Average lunch price:N500-N1000
• Average dinner price:N500-N800
• The restaurant is located in the Area3 Roads Shopping Center and is comprised of 3,400 square feet
The dining room will be comprised of 20 tables with a seating capacity of 86 seats and 40 available parking spaces to meet the needs of the customers.
- The restaurant will employ 19 employees
- N860,000 -1,200,000 revenue target; Industry average for casual restaurant average of N860,000.
- Annual 3% increase for inflation and 5% annual increase in revenues
- Year 2 Assumes Catering Business in Place. Assumes 4 parties monthly @ N15 per plate and N50 persons. Catering will escalate to 8 parties monthly in month 20 and then 10 parties monthly thereafter. Also assumes additional increase in staffing (4 persons to be hired at 6 hours @ N8.00 per hour.
Start-Up Cost
Total start up costs will be N363,000, N174,000 of which will be contributed by the owners and the remainder will be secured through a proposed bank loan.
Start-Up Expenses Amount
Graphic Logo and Name Creation N1,000
Permits + Lease Deposit N1,200
Contingency N10,000
Outdoor Sign N3,000
Building Improvements N50,000
Working Capital N172,500
Pre Opening Expenses N14,800
Total Start-Up Expenses N252,500
Start-Up Assets
Artwork N800
Walk In Cooler N8,000
Commercial Dishwasher with Sink in Table N7,000
Reach in Stainless Steel Freezers (2) N6,000
Stainless Steel Cold Station N3,000
20 quart food processor/blender N900
Ice Maker with Storage Bin N4,000
Stainless Steel Hood with Exhaust N11,000
3 Door Reach In Beverage Cooler w/Glass Door N3,500
Sandwich Prep Reach Ins (2) N5,600
Kitchen Small wares N1,500
Source and Use of Funds
Total start-up costs are estimated to be N363,000. The majority of the costs are associated with the restaurant equipment, inventory and furniture and furnishings for the dining room. Total costs for these items are reported to be N110,500. The costs are associated with build out and renovation of the restaurant to provide updated plumbing and creating additional space in the dining area by removing a non-supporting wall: N50,000. Additional start up expenses are in the form of working capital and contingency N182,500.
The Ken’s will contribute N174, 000 and are requesting an additional N189,000 in the form of a bank loan. The loan is expected to be a fully amortizing 5 year term note secured by UCC filings on all furniture fixtures and equipment.
Source and Use of Funds Source
Owners’ and other investments N174,000
Bank loans N189,000
Other loans N-
Total Source of Funds N363,000
Use of Funds
Buildings/real estate N –
Leasehold improvements N 50,000
Capital equipment N110,500
Location/administration expenses N 14,800
Opening inventory N-
Advertising/promotional expenses N 4,000
Other expenses N1,200
Contingency fund N 10,000
Working capital N172,500
Total Use of Funds N363,000
Location and Facilities
The 3,400 square foot restaurant will be located in a Area3 Shopping Center, a retail strip center located in the Garki Abuja. The restaurant is located in a major traffic area, at the intersection of Area10, Area8 and Area 11 Garki, Abuja, has a population of over 776,298 according to the 2006 Nigeria. Census Report. The residential population in the immediate area is comprised of a mixture of single family and multi-family housing. The median household income is N46,532. Major employers include Union Pacific and Bank of African.
Suppliers
Because of their years of experience combined with their existing catering business, (THR) have established relationships with qualified suppliers. These suppliers can provide reasonably priced products, delivered according to the schedule.
Organizational Structure
THR expects to hire 19 employees. Together, I will personally select each candidate. We’ve adopted an effective interview process designed to staff the restaurant with highly qualified people for each position. Each applicant will be rated and evaluated according to a pre-defined set of standards designed for each position. Background checks will be utilized for designated positions. Recruiting efforts will always center on referrals.
Management Team
The restaurant will be owned by Mr. Ken. I began my restaurant career at the age of 18 working in a quick-service foodservice operation and earned my way through polythenic as a server and bartender. After earning my National Diploma, i worked for a regional restaurant chain and an independent fine dining restaurant. In these organizations i held the positions of Assistant Manager.
Purchasing Records/Payables. A part time bookkeeper will process and record invoices and credits daily. Reports detailing cash expenditures, payments by check, and accounts payable transactions will be readily available. Check disbursements will be prepared by the bookkeeper. Check signing authority for the general operating account will be given to the general manager.
Future Services
THR has future plans to provide catering services for family reunions, weddings and other events desiring a “home-style” menu. This could potentially become a large portion of gross sales. THR are targeting Year 2 and at that point, a sales agent would be hired to directly market the products for daily delivery or catered functions.
Market Analysis
The restaurant industry is a large and diverse business: Restaurant-industry sales are forecast to reach N58 billion in 2016 – an increase of 2.5 percent over 2015. Restaurant-industry sales are projected to total N604 billion in 2017 and equal 4 percent of the Nigeria gross domestic product. The overall economic impact of the restaurant industry is expected to exceed N1.7 trillion in 2017. On a typical day in Nigeria in 2016, more than 130 million people will be food service patrons. Sales at full service restaurants reached N184.2 billion in 2016. Sales at limited service restaurants increased to N164.8 billion in 2016, while snacks and non-alcoholic-beverage bar sales rose to N24.7 billion. (National Restaurant Association).
The Nigeria restaurant industry includes about 480,000 restaurants with combined annual revenue of about N400 billion. Major companies include Mr. Biggs; Tantaliza! Brands (KFC, Pizza Hut, Taco Bell); and Darden Restaurants (Olive Garden, Red Lobster). The industry is highly fragmented: the 50 largest companies hold just 20 percent of the market.
The industry consists of full-service restaurants (FSR) and limited service eating places, which include quick-service restaurants (QSR); cafeterias; buffets; snack bars; and nonalcoholic beverage bars.
Main Competitors
The following restaurants are located within a five mile radius of THR:
- Hedarys Restaurant – This is a full service family restaurant established in 1977. The 5,000 SF restaurant run as a sole proprietorship, has 17 employees and generates N1.7 million in revenue annually. Prices are higher than THR and range from N1,500-N2000 per entrée.
- Applebee’s – This is a chain restaurant offering standard fare. The food quality is average. Entrées range from N800–N1, 200.
- Chili’s – This is a chain restaurant also offering standard fare. Food choices are varied and prices range for N800-N1500.
Market Needs
The area is in great need of a family style restaurant. This Section of Garki is commonly referred to as “fast food alley” The selection of fast food is vast however; the area is limited on its family restaurant choices. THR’s nearest competitor, The Hedary Restaurant is located over 5 miles away from the location. Further, established in the 1970’s the Hedary Restaurant’s customers are older than the targeted family group THR focuses on.
Positioning
Consumers believe that meals at home are healthier and higher quality than eating at restaurants. At (THR), we will position ourselves as the premier home-style restaurant by preparing quality home cooked meals with simple wholesome cooking. (THR) will also provide home cooked fare that appeals to the current trends of healthier food and offer menu selections which will appeal to this group. (THR) will be positioned as the premier traditional home-style restaurant.
Strengths
- Prime location with easy access from Interstate 30
- Exceptional staff with the can do attitude. Combined 25 years in the restaurant industry
- Because owner has catering industry experience, i already has established a customer market and approved vendors
- Due to our small size, we believe we can provide exceptional quality by hand selecting our market specials when compared to our larger corporate competitors
- The same concept holds true in our staffing requirements, by hand selecting our employees we will strive to offer unsurpassed service when compared to our larger competitors
Weaknesses
- Recruiting and retaining quality employees
- Tight margins will allow little wiggle room for error
Opportunities
- Little barriers to entry allows for immediate business opportunities
- Offer additional catering services
Threats
- Government mandates (restaurant operation, food safety, and worker protection at the federal level and health, sanitation, safety, fire at the local level)
- Rising operating costs
- Building/maintaining sales volume
SOLD BY: Excellent Project| ATTRIBUTES: Title, Abstract, Chapter 1-5 and
Appendices|FORMAT: Microsoft Word| PRICE: N5000| BUY NOW |DELIVERY
TIME: Within 24hrs. For more details Chatt with us on WHATSAPP @ https://wa.me/2348055730284
