Starting a new business is always a challenging task and requires comprehensive understanding of the business as well as the overall planning process. A comprehensive understanding of the different dynamics of the business, as well as the overall process of how the essential resources will be accumulated to start the business, are some of the basic steps which an entrepreneur must undertake in order to successful launch a new business.
Starting a new business is always a challenging task requiring considerable effort and investment to be successful. This therefore means that entrepreneurs must not only put in their skills and efforts, but also invest the required funds to initiate a successful business. What is critical to understand is that in order to open the new business, it is important that a comprehensive preparation must be done so as to cover as much as ground as possible in order to cover the risks. This is also critical due to the fact that in start up businesses, the overall risk is always greater than the expectations of the reward, and therefore an entrepreneur must have to take a 360 degree view of the environment within which the business is going to operate. (Burns,2007).
A business plan is therefore considered an essential document to prepare so as provide detailed and comprehensive information regarding the nature of the entity to be formed, the description of the company, its activities, the products and services that it is going to offer as well as the overall strategy to be formulated and details about its competition. A good business plan also includes financial analysis and reflects the overall requirement and projected income and funds needed to run the business.
This document will provide a business plan for our proposed business and will present a collection of comprehensive information and strategy to initiate the new venture of opening an Indian Restaurant.
Considering the overall nature of the business, our new proposed business will be a sole propertiership and as such the business as well as the owner will remain the same person. A sole propertiership is also called a sole trader in which all assets and liabilities of the business are the personal liabilities of the owner/s. A sole proprietorship will be easier to formulate with lesser legal complications as well as fewer regulations to follow. This makes the sole proprietorship a better and more manageable option to exercise for the achievement of overall intended objectives. It is also important to understand that a sole proprietorship is relatively easier to manage and an owner can take charge of many important issues himself with fewer expenses.
The proposed name of our new business is Taj Restaurant – after the famous Taj Mahal of India – which will be an Indian restaurant mainly catering to the needs of students of Asian origin. This will be a small restaurant and as such the overall organizational structure of the proposed will be simple with owners managing the affairs of the business with relatively smaller input/help from employees involved in managerial activities.
Nature of Business
Our proposed business will be based on the selling of Food of Indian and Pakistani origin to our target market. Our restaurant will be located near the campus and will mostly target the Asian as well as local students. The most important characteristics of our business will be to offer food that is of high quality and as such will offer an opportunity to the Asian customers to enjoy their traditional food.
As discussed above, that the proposed business will be a sole propertiership wherein the owner will also be the manager of the business. Thus, the overall management team will comprise of the owner, two cooks and two servers whereas all the accounts, procurement as well as logistic responsibilities will be jointly shared by the owner and the servers.
Procurement will be made through local resources; however, we are also intending to procure some items from India that may not be typically available in UK. For delivering our food to customers, we will also be requiring a motor bike that will be used to deliver food and as such one driver will be required for this purpose. Kitchen will be handled by the cook and servers whereas overall affairs will be operated under the guidance of the owner.
As discussed above, this product will be targeted at the customers of Asian origin; however, we will also be targeting Arabs and English customers including those who are living in and around the surrounding areas. What is critical to note is that before making an attempt to define the market, it is important that a general overview of some of the factors that are more critical shall be discussed in order to take a broader view of the overall market and opportunities offered by the market.
Product or Services
As discussed above, the proposed business will be offering Halal food of Pakistani and Indian origin to the customers of South Asian Origin. The restaurant will be located with four tables and four chairs for each table. It is also critical to note that there will be free delivery to all our customers who can access us through our free number.
The most distinguishing characteristics of our product will be the fact that it will be Halal and based on the recipes that are in use in India. As such, this restaurant will be offering Indian food to our customers of South Asian origin but also to those who want an authentic Indian restaurant experience rather than ‘curry house’ fare.
It is also critical to mention that Indian food is often best known for being spicy and different from the traditional cuisines offered in West, and will be nutritious food with a vegetable base. Furthermore, our customers will be able to get the food at relatively cheap prices than they can find in restaurants serving local British cuisine. As such, our restaurant will provide an opportunity to our customers to not only enjoy healthy Indian food but also to recollect their memories of their homeland. Our focus and marketing drive will therefore be based on providing psychological assuage to our customers by linking our food with the memories of their homeland and the overall taste that they used to enjoy while eating the same food at home.
It is also critical to understand that our food will be prepared by chefs specialized in preparing Indian food, and as such we will offer a variety that will not be available at most other restaurants in the area or the UK. Combined with our free delivery services, we will be able to offer our food to homes during lunch and dinner hours and as such those working class families that cannot afford to have time to prepare food can get the opportunity of eating that food at relatively cheaper price and with more ease. This means that our overall products and services will be offered to a very selected niche of customers belonging to Indian and Pakistan Origin.
It is also critical to note that our product offering will be variable in nature i.e. we will be offering a traditional menu along with conventional serving of food to our customers who will be visiting us in the restaurant. However, for our customers who will be ordering for delivery, we will be offering bundled products i.e. in the form of deals wherein we will be offering combination of different meals at various prices. The price will tend to increase once the overall items on the order list increase. This also means that the customers ordering higher quantities will be able to receive discounts on the quantity. We will also be offering our services for supplying traditional Indian Food such as Biryani on the occasion of weddings or different religious occasions where Biryani and other Indian dishes are usual. Thus the overall range of our product offering will be variable in nature to suit the various needs of our customers.
As discussed above, the target market for our proposed new business will be Indians, Pakistanis, Bangladeshis, Arabs, as well as the English population. It is important to note that the there is large number of people living around this area and there is also no such restaurant in this proximity.
It is also critical to note that our target market will also include families of South Asian origin who are working (i.e. both members of the family are working). This is due to the fact that we assume that working families will have less time to cook and therefore will be willing to spend on purchasing the food from our restaurant. Similarly, our next target market will comprise students who will be living alone, and as such may require help in cooking; therefore we will also attempt to attract South Asian students to use our restaurant.
Overall our target market is based on the well defined criteria: Asian students
Since the product offered will be simple and generic in nature, we will be charging price based on the cost plus principle. A premium of 25% will be added to cost of producing the meals. This is critical due to the fact that ours will be a generic product; however, since it will be offered in a place where it is not usually sold, we are therefore of the view that we will initially be charging a price of over 25% on our cost. However, this premium could be further reduced as we achieve the volume and expand into new areas.
Overall product offering will also include selling bundled products which means we will be offering pricing that is based on the different price slabs. The strategy of charging a premium of 25% over our cost will be only limited to the customers that visit our restaurant physically whereas bundle offers made for free delivery will be based on different pricing strategy wherein we will be offering discounts on bulk purchasing or purchasing different product offerings.
Since the overall scope of our business will be limited and as such we will be relying heavily on communication strategies that will relatively simpler in nature. It is therefore assumed that we will be employing direct marketing as one of our important marketing communication tools to promote our product. The promotional activities will be dependent on the advertisement in the local newspaper as well as we are also planning to promote our business through circulating pamphlets along with the newspapers delivered to homes. For this reason, we will be contacting the local hawkers of newspapers to distribute our promotional material along with the newspapers that are being distributed in the area. It is, however, critical to note that we will be targeting this communication strategy to our target market and all promotional material will be sent to the customers belonging to our pre-defined market segmentation – so, for example, student flats and halls of residence will be heavily targeted.
SWOT Analysis is one of the most critical tools that can be used to assess the overall strengths and weaknesses of the organization, besides assessing the overall opportunities and threats. This is critical due to the fact that it provides and strategic outlook for the business and help entrepreneurs to devise their strategies accordingly.(Stutely,2006).
- One of its kind in the area offering a product which is not offered by others.
- Relatively simple organizational structure which makes it easier to manage.
- Halal Food for Muslims.
- Smaller size therefore may not be able to cater to wider market.
- Larger dispersion of customers means the overall reach will be minimal.
- Lack of capital may not allow the firm to enter into the market with relatively large resources.
- Untapped market, therefore there is a lot of room to skim the market.
- Large UK South Asian population provides opportunity to expand into new areas.
- Low cost of entry makes it easier for others to enter into the market.
- Low switching cost will give customers more choice to look for new services.
- Threat of new entrants is high due to generic nature of the product and no entry barriers.
Budgeting and Finance
There will be total investment of £20,000 which will be contributed by the owner; no loans will be obtained. Most of the expenditure will be borne by the owner. For details of the cash flow, the excel sheet will provide full details.
It is anticipated that the funds invested by the owner may dry up and as such the business may require funding at the end of the year. However, it is also assumed that the owner will introduce new equity to fill any gaps in cash flows.
There is a great demand for an authentic Indian restaurant as there are lots of Asian students living in that area, and the British Indian restaurants, although many are excellent, offer a cuisine all their own. Opening the restaurant therefore will provide a comprehensive business opportunity to earn, make profits and grow the business.
Our proposed business will be a sole propertiership wherein the owner will take care of and manage almost every activity. The target market comprises Indians, Bangladeshis and Pakistanis and Arabs; however, the business will also target English customers who, unlike many countries’ populations, are not small minded when it comes to trying ethnic cuisine from other countries. What is also critical to note that the business will undertake a direct marketing strategy to achieve its promotional objectives. This will be done with the help of newspaper hawkers who will be circulating marketing material to our target market. We aim to charge a premium of 25% over our cost and as such will vary our prices depending upon the type of deal ordered by the customer. This also means that our specific customers such as students and families will be getting discounts for bulk purchasing.
An initial capital of £20,000 will be invested wherein it is also forecast that the business may require fresh funding at the end of the year. It is assumed that the owner will contribute the funds rather than borrowing money from external sources.
- Burns, P (2007). Entrepreneurship & Small Business’, London: Palgrave Macmillan
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- Stutely , R(2006) ‘The Definitive Business Plan: The Fast Track to Intelligent Business Planning for Executives and Entrepreneurs’, Financial Times/Prentice Hall (7)
- UK population breaks through 60m (2006) BBC, Available: http://news.bbc.co.uk/2/hi/uk_news/5281360.stm Last accessed: 8th May, 2010