Business plan On Healthy Heart Restaurant

Business plan On Healthy Heart Restaurant


Executive Summary Healthy Heart Restaurant is an eating establishment focusing on healthy, nutritious, and fast food to the college area in Surat. The Healthy Heart Restaurant will be an upscale specializing in a combination of fast hot or cold sandwiches and salads plus specific recipes focusing on the healthy and nutrious food. Based on this distinct menu, Healthy Heart Restaurant will follow a differentiation strategy that will provide unique, or hard to find choices to healthy food patrons. The keys to success for Healthy Heart restaurant will be repeat business, an excellent location convenient to downtown businesses and its unique cuisine The company will be a owned by me and will be providing capital investment and there will be an additional raised in short term loan. Entering into this market will be easy; the industry is not highly competitive, with periodic overcapacity, high margins, and low entry/exit barriers. In addition, there is a large number of substitutes, and the suppliers to this market have a great deal of power. In order to overcome these issues, the company has acquired an excellent locality in the downtown area and intends to provide a suitably upscale environment to draw in the company's main target market segment, the business professionals, college students and the families with their children who come for having healthy dinner. The company will seek to provide these customers with the maximum number of services to create the greatest sales volume during the company's peak hours of operation. The company will have a comprehensive marketing, advertising, and promotion campaign that will maximize word-of-mouth marketing and will consist of radio, printed material, billboards and discounts. The company has planned to offer its products at a slightly higher price than that of its Competitors. This is to provide credibility to its clients as an upscale establishment that
provides a unique menu. This will also provide the funds to cover the higher than expected operating costs due to the differentiated and expanded menu. It is estimated that
Business plan On Healthy Heart Restaurant
Roll No: 064127 (Kalpesh Bharucha) Page 2
the company will earn revenues of approximately by year three, and maintain a healthy cash flow. 1.1 Objectives Healthy Heart Restaurant seeks to achieve the following goals: • Cash flow self sufficiency by the end of the first year. • Repay debt from original financing by the end of the coming year. • Provide an income for founder-owner with income growth possibilities. • Gross profit of Rs 1.5 lacs in the first year. • Becoming profitable in 2rd year, better profits on sales by year three. 1.2 Mission "Our restaurant will be a place where people come to relax, have a good time, and enjoy a great meal. From the moment our customers walk in the door, they are greeted by a warm atmosphere, subtle music, and friendly and courteous staff. Our goal is to give our customers total satisfaction and exceed their expectations through: Commitment to the continuous development and training of our staff Good corporate citizenship and supporting the development of the society and community Commitment to our Vision
1.3 Vision Healthy Heart Restaurant Vision is to remain the leading fast food restaurant in Surat, by delivering total customer satisfaction through: Quality Service Cleanliness Value
by the development, contribution & commitment of our staff.


1.4 Healthy Heart restaurant Core Values
Dream Big: We believe in the unlimited potential that lies within all people and are committed to providing opportunities for people to achieve their dreams Work Hard: We believe that hard work and front-end effort are prerequisites for success Get It Done: We believe that achieving positive results is the key to continued success for everyone Play Fair: We believe that winning teams play by the Golden Rule. We treat our customers, business partners and teams as they want to be treated–with respect. Have Fun: We believe that life is meant to be enjoyed. Success comes more quickly by having fun while working toward our objectives. Make A Difference: We believe that as a company and as individuals we have the responsibility to improve the quality of life for our employees and communities. Keys to Success The keys to success in this business are:
1. Product quality: Food, coffee-based beverages, and entertainment are our products. They must be of the high quality and value.
2. Service: Our patrons are paying to have a good time. Their experience will suffer if service is not of the highest caliber. Each member of the staff will be courteous, efficient, and attentive.
3. Marketing: We will need to target our audience early and often.
4. Management: We will need to have a firm grasp on food, beverage, and labor costs. The dining/entertainment/coffeehouse experience must be delivered in a fashion that will not only inspire repeat business, but encourage word-of-mouth recommendations to others. Proper inventory, employee management, and quality control is key.


2.0 Company Summary 2.1 Company description: Though the future looks bright for the food-service industry overall, there are no guarantees in this business. Even the most successful operators will tell you this isn't a "get rich quick" industry. It's more like a "work hard and make a living" industry. The name of my restaurant will be Healthy Heart Restaurant, which means that we will serve healthy food. It has been formed as sole proprietorship firm. In which I would be the owner. Restaurants are classified into three primary categories: quick-service, midscale and upscale. Restaurant service style would be: Restaurants are classified into three primary categories: quick-service, midscale and upscale. My service style will be Quick-service restaurants are also known as fast-food restaurants. These establishments offer limited menus of items that are prepared quickly and sold for a relatively low price. In addition to very casual dining areas, they typically offer drive-thru windows and take-out service. When people think of fast-food restaurants, they often think of hamburgers and French fries, but establishments in this category also serve salads, hot dogs, sandwiches, pizza, salad with dressing on the side or fat free salad dressing, Fruit or fruit and yogurt i.e. Lassi, Fat free / low fat milk or water, Whole wheat rolls, Sandwiches, Coffee, Hotdog, Pizza, and the list goes on…………. 2.2 Start-up Summary The founders of the company are Mr. Kalpesh Bharucha and his family member Mr. Monty Patel. Mr.Bharucha will focus on the managerial aspects, customer relationship management, and financial tasks along with promotional activities and Mr. Monty on the personnel issues.


We have found the location and are going to purchase the land of the size 1222 square yard. This is a plot of 47 / 26 yards @ Rs. 6000 per yard. The building will be constructed by a local contractor Mr. J.C. Mahadevwala who is my relative and architecture by profession. We will be able to set up ground floor in at the very first year of out business, which will be extended to 1st floor till the end of 2nd year. As we will secure our customers by distributing discount coupons we may move for further investment. The second year will just show us the positive gains, which will be converted into secure gains till third year. place is already equipped as a restaurant so we plan to come up with a total of Rs. 2,013069 /- of capital in the first year and Rs. 455232 /- in capital for the second year. Besides the guaranteed term loan from bank Rs. 6988557 /- . So in short for the start up we need Rs 10751626.00
Start Up Cost
1St Year
2nd Year
Land
9150000
450000
Equipments
520996
87431
Interior +Installments
596610
0
Movable fixed Assets
178900
225900
Preoperative Expenses
35000
0
Misc. Expenses
158360
237540
Cash(provisions for contingency)
111760
45184.1
Total
10751626
1046055
Liabilities
Owners capital
2013069
455232.6
bank loan
6988557
705232.6
Unsecured Loan
1750000
250000
Total
10751626
1410465


3.0 Products and services Purpose of Product/Service The purpose of any food service is to provide nutrition while offering the added benefit of tasting good. At Healthy Heart Restaurant, customers will eat traditional favorites without the guilt of consuming unhealthy and heavy fast food. They will also have the opportunity to sample authentic, adventurous fare and increase their awareness of different coffee flavors.
Selecting a Food Concept
Restaurant patrons want to be delighted with their dining experience, but they don't necessarily want to be surprised. If you're anticipating a family-style steakhouse (based on the name or the décor of the establishment), but you find yourself in a more formal environment with a bewildering--and pricey--gourmet menu, the surprise may keep you from enjoying the restaurant. Concepts will help my restaurant give a way to let patrons know in advance what to expect and also to provide some structure for their operation. Sandwich Shop: One reason sandwich shops are so successful is that they enjoy high profit margins. Sandwich shops can also change their menus quickly and easily to adapt to current tastes. For example, with the growing interest in health and nutrition in the India, sandwich shops have started offering more low-fat, healthy ingredients in their sandwiches, salads and other menu items. In addition, many sandwich shops have been able to keep up with workers who eat at their workplaces by adding delivery and catering to their sit-down and take-out operations. Sandwich shops can be differentiated by the foods they serve. Most sandwich shops serve only sandwiches, possibly with some side dishes or desserts. A delicatessen usually offers a more extensive menu, including sandwiches, prepared meats, smoked fish, cheeses, salads, relishes and various hot entrees.


Coffeehouse: With more than 400 billion cups consumed every year, coffee is the world's most popular beverage. But beyond the beverage itself, people frequent coffeehouses and espresso bars for a variety of reasons: to meet with friends, for a quick lunch and a drink to perk up the afternoon, or simply to start off each morning with a great cup of coffee to start off each morning. Most successful coffeehouses have heavy foot traffic and high-volume sales. The majority will serve up to 500 customers per day and manage up to five customer turnovers during the lunch hour, despite having limited floor space and modest seating capacity. Profit margins for coffee and espresso drinks are extremely high--after all, we're dealing with a product that's more than 95 percent water. Features and Benefits The food at Healthy Heart Restaurant offers several unique benefits to the consumer. It will satisfy customers’ craving for a tasty and fast meal while meeting rising expectations for healthy alternatives. The food will be fresh, made to order, and low fat. Fresh fruits and vegetables increase flavor while lowering calories. Healthy Health Restaurant will offer Salads dressing, yogurt and different coffee ranges that are just as easy to eat on the go as fast-food hamburgers with less than half the fat. We also provide with some fast foods and some fixed meals for student as we are in location advantage of attracting lot of student. Product/Service Limitations Perishability of inventory is the major product limitation. Care must be taken to order proper amounts and use fresh foods immediately. The format of three to five changing entrees per evening will help mitigate this liability. Menus can be adjusted based on ingredient availability. Product/Service Liability Healthy Heart Restaurant faces two major areas of costly liability.


Food poisoning is a real threat. The resulting medical costs and possible punitive damages can significantly affect the bottom line. Worse yet is the bad word of mouth resulting from such an incident. Safe food handling and employee sanitation must be constantly monitored. Proper training is essential. Along with proper training and systems, adequate insurance will be purchased. Facilities An existing restaurant-equipped building with adequate parking is being leased. Few modifications are necessary and most are cosmetic in nature. The building is 1220 square feet with a dining area of 700 square feet enough to comfortably seat 50 patrons. Suppliers All the major food distributors in the region make regular deliveries to local grocers and restaurants. Negotiations are well under way with LOCAL dealers to deliver staples and seasonal produce. Specialty items will be purchased from National Foods Agency at least twice a week. Numerous other suppliers can be used if delivery issues arise. Local farmers’ markets will also be a source for fresh ingredients. Target Market: No single food-service operation has universal appeal. This is a fact that many newer entrepreneurs have trouble accepting, but the reality is that you will never capture 100 percent of the market. When you try to please everyone, you end up pleasing no one. So focus on the 5 or 10 percent of the market that you can get, and forget about the rest. With that said who is eating at restaurants? Our target market consists of college students, athletes, and families with children; they will be looking for healthy, inexpensive, and filling food. Primary market being college students. Secondary market being the parents with their children who want healthy food.


4.Marketing Objective and strategy Vision: Our Vision is for you to achieve “a health nirvana every time you step into The Healthy Heart.” Marketing Programme Promotional and Positioning Strategy The slogan for our restaurant is “Healthy Heart,” a place to acquire a healthy life at a livable price.” Our slogan reflects our difference because while most establishments offer healthy choices on their menu, our entire menu is researched to be a healthy choice. Good health connotes a long life, and our customers can “live” well at our affordable prices. This is what separates us from our competitors. Marketing Mix The four strategies of the marketing mix (product, price, promotion and place) are interconnected. Action in one affects decisions in another. The order of dealing with each can vary, i.e. place can occur before promotion, etc. But first, the target population must be defined and then the strategies are directed toward this target population (market). 1- Product (the food items that are served at a restaurant) Product needs to be different, better, more dazzling than what is offered by the big food suppliers. Most restaurants are willing to pay a price premium for local farm-fresh food, but only if it exceeds the product supply or quality of what the mainstream vendors offer. So on the product part will be list of different items which we are going to serve.
 Salad with dressing on the side or fat free salad dressing
 Fruit or fruit and yogurt i.e. Lassi


 South and Punjabi Dishes
 Fat free / low fat milk or water
 Whole wheat rolls
 Sandwiches
 Coffee
 Hotdog
 Pizza
 And the list goes on………….
2- Place (the restaurant and where it is located) Healthy heart will use direct marketing channels since it deals directly with its consumers. The location we have chosen for our Healthy heart restaurant is near the SCET College campus. This will put the healthy heart near most classrooms on campus along with near the majority of dorms on campus. Lastly, it will be near most of the sporting events that will take place on campus, which will help with sales to visitors of the campus. And it will be also good for the people coming to chawpaty where the family will be coming with their children. So they may also be created as source of revenue. 3- Price (costs of menu items) We want to convey a message of familiarity, understanding, and perhaps even friendship through our low prices. During the beginning of our new company, we will use the skimming price strategy. Our skimming price strategy works with our target market mainly, because it is cheap. Therefore, since our target market consists of college students, athletes, and families with children, they will be looking for healthy, inexpensive, and filling food.


The Healthy Heart gives the customer a simple price that is easy on the budget to accommodate a simple diet that is healthy for your body. If this mission is accomplished, we will be able to build a strong relationship with our more familiar customers. Accomplishing this will allow our business to grow. Our skimming price strategy works with our target market mainly, because it is cheap. Therefore, since our target market consists of college students, one who works on his health and families with children, they will be looking for healthy, inexpensive, and filling food. It is important that we keep in the same pricing range as our competitors, because if we raise our prices too high, then we will fail to make sales, but if we reduce our prices too low, then we will lose money. We will use some of their ideas for discounts such as the punch cards. The punch cards really attract customers, since they know that one day after buying nine meals; they have a free meal coming to them. In addition, by using the punch cards, our revenue will dramatically increase, because those particular people with the cards will still have to buy a certain number of meals before they receive their free one. 4- Promote (the methods used to let consumers know about the restaurant and what it serves)
The Healthy Heart will have is the promotional opportunities that will encourage customers to return. These opportunities include punch cards for a meal “on the house” after a customers has purchased ten meals. There will also be a half priced meal if customer brings a friend. Telling a friend is the strongest mode of advertising there is and The Healthy Heart will not overlook such an influence. Bringing a customer in for the first time is easy but making sure that the customer will return is the hardest part for any new business.


Opening day is a very important part in our promotional strategy. One promotional objective we will execute is if a customer brings in a friend, they will receive half-off their price. We will know if we accomplished this task because our cashiers will decide if the customer receives the half-off discount. Another objective we will execute is giving out free samples of our food in the hopes that our customers come back for more and be excited about trying the variety of healthy dishes. To determine if this is being accomplished, we will be participating, and by actually giving out the free samples we can research if the demonstrated foods have a higher growth in sales. Market Research It’s very important for any industry to carry out market research in order to serve their clients, in order to have good name. By conducting a market analysis I will be able to answer questions such as: * What trends are emerging in the food service industry? * What are the strengths and weaknesses of my competition? * Is my location suitable? * Does my concept fill a niche in the market? * What is the potential number of customers I can serve per year? * Consumers will spend a greater portion of their food dollars away from home; * Competition in the food service industry will be more intense as growth continues; * Major food service chains will increase their shares of both sales and units; * Independent operators will be the main source of new restaurant concepts; * Nutritional concerns will be critical at all types of food service operations; and * Service will become a more important point of differentiation.


5.Competition Market conditions in my area will have a significant impact on the profitability of my restaurant. The strength of the local market affects how many customers my restaurant will serve and the menu prices that my restaurant can charge. Existing market area restaurants can provide valuable information to help me analyze demand and market opportunities. We can assess their competitive strengths and weaknesses and learn from their successes and failures. First, I will identify how many restaurants are in my market area. Then, will identify those restaurants that appeal to the types of customers (market segments) that I plan to serve. I would also identify all other restaurants located in my immediate area because they can also impact my business. Will be also referring to the Yellow Pages and my local Chamber of Commerce for listings of area food-service operations. It is also important for me to identify any market area restaurants that have closed, and for what reasons. Also, learn what new restaurants are planned for the market area and determine how they might affect mine operation. After identifying my competition, will visit and evaluate each restaurant. Speak with the manager of each operation, if possible. Will Use the below competition checklist as a guide for taking notes. After identifying my competition, visit and evaluate each restaurant. Speak with the manager of each operation, if possible. Use the competition checklist as a guide for taking notes.


Competitive Edge Our competitive edge is the menu, the chef, the environment, and the tie-in to what's healthy and trendy. Strengths: Location: The restaurant would be between College area and public place Chawpaty including medium and big commercial centers. The SCET College and various other entertainment places are in these ranges. Potential of customers: As shown in market segment the potentiality and rush of customer would be a great factor after a success of restaurant. Focus on menu (Trendy selection) : The menu will be selected after the market analysis and recommendation of our chef. Again we keep the option of flexibility in altering the menu items as well as menu prices. Service : According to the area we will be studying have selected our main focus would be on the quick services as most of our clients during the days time would be business persons and youngsters. Low prices : The price we have set are as per the market choice and recommendation of well experienced chef. This decision is taken very carefully. Entry barrier: Size of our restaurant along with our product range would become a entry barrier for competitors. Again the road is very congested so no plot is available there except the land we have chosen. Weakness : Less Experience: I do not have much exposure in this segment. Mr. Bharucha is totally new for this business while Mr. Monty has only one years of experience for this industry. So the tac-tics of this industry are still hidden from us but the advantage is that he has done hotel management. Dependence on chef : As I do not have any experience at production-side they may face difficulties in the starting months.


Staff : The tendency of the worker in this industry is to keep on changing the job. Even at the time of doing the full time job these people may join any contractual labor job and may remain absent for several days. Opportunity: First mover advantage: This will be the first its kind of restaurant in this area. There are many small sandwich corners in the area but there isn’t any structured restaurant. Again the shops and corporates are very huge market, too potential and are not yet covered. These people tend to manage third food from tidy and unclean small marts. Threat: Consumer Behaviour: The low-cultured people may spoil the environment of restaurant. Competitors may arise. Loyalty: The target market is majorly constructed by the busy customers. They may be loyal to one food centre. The element of loyalty is the biggest question as the nature and need of customers / consumers are concerned. Competition Checklist: Location -Community traffic patterns -Proximity to sources of demand -Accessibility -Visibility -Surrounding neighborhood - Parking availability - Sign visibility Appearance/Comfort - Exterior appearance and theme - Interior appearance and theme


- Atmosphere - Cleanliness - Heating and ventilation Menu - Theme - Variety and selection - Signature items - Price range and value - Beverage service Food Quality - Taste - Presentation - Portion size - Consistency Service - Days open - Hours of operation - Service style - Quality of service - Speed of service - Extra services offered General Information - Seating capacity - Number of customers by meal period - Types of guests served (age, income, origin..) - Is business increasing or decreasing? - Banquet facilities
- Entertainment - Franchise affiliation - Reviews by food Critics/Ratings - Local reputation - Advertising and promotion methods used Overall - Strengths - Weaknesses


6.Sales strategy As the table shows, we intend to deliver sales of about Rs. 38 lacs in the first year, and to double we will achieve the figure easily.
From figure it is easily seen that as the customer loyalty will increase our sales will increase day by day and as its highest capacity is fixed, the sales figure will steady at Rs. 1.2 crore. Here, BEP and PBP both will be achieved at 1st and 2nd half of the 6th year consecutively.


7. Management Plan: Before deciding how to organize an operation, prospective entrepreneurs need to identify the legal structure that will be best suit the demands of the venture. So the management plan is part of business plan that describes the venture’s form of ownership-that is proprietorship, partnership and corporation. In my healthy heart restaurant, the method of creation will be sole proprietorship i.e. will be created by me. So that I can be able to have unlimited liability. But if I would have any plans for expansion in the future i.e. by opening a branch in other city then would change my management style to partnership. Legal form of business: Sole proprietorship Liability: here as we are sole proprietorship there is no distinction between business entity and the owners. Then, to satisfy any outstanding debt of the business, creditors may squeeze any assets the owners have outside the business. Cost of starting business: as per the various types of form of business the least expensive is proprietorship where the only costs incurred may be for filling for a business or trade name. There are several categories of personnel in the restaurant business: manager, cooks, servers, busboys, dishwashers. When my restaurant is still new, some employees' duties may cross over from one category to another. For example, my manager may double as the host, and servers may also bus tables. I will be sure to hire people who are willing to be flexible in their duties. My payroll costs, including my own salary and that of your managers, should be about 24 to 35 percent of my total gross sales. Job Design The primary responsibilities of each of the roles, in our restaurant shall be as described below:


1. Restaurant Manager: Overall management of the restaurant Supervision of restaurant Customer management Cash supervision Security concerns to be handled Retention of talents Growth of the restaurant 2. Serving Waiters Serving of the dishes on tables Placement of dishes on table Coordination with the kitchen Effective order handling Serving of dishes 4. Order Taking Waiters Receiving of orders from customers Allocation of tables to the serving waiters introducing the different delicacies to the guests tracking loyal and beneficial customers coordinating with kitchen and serving waiters 5. Serving Waiters serving of the dishes on tables Placement of dishes on table Coordination with the kitchen Effective order handling serving of dishes 6. Chefs and Helper Menu management Preparation of dishes


ordering the optimum material garnishing of dishes Quality of food prepared Avoid wastage Chefs and cooks: When I start out, I'll probably need three cooks--two full times and one part time. Restaurant workers typically work shifts from 10 a.m. to 4 p.m. or 4 p.m. to closing. But one lead cook may need to arrive early in the morning to begin preparing soups, bread and other items to be served that day. One full-time cook should work days, and the other evenings. The part-time cook will help during peak hours, such as weekend rushes, and can work as a line cook during slower periods, doing simple preparation. Cooking schools can usually provide me with leads to the best in the business, but will look around and place newspaper ads before we hire. Customers will become regulars only if they can expect the best every time they dine at your restaurant. To provide that, I'll need top-notch cooks and chefs. Salaries for chefs and cooks vary according to their experience and your menu. Chefs command salaries significantly higher than cooks, averaging 4000 to 5000 a month. We may also find chefs who are willing to work under profit-sharing plans. If we have a fairly complex menu that requires a cook with lots of experience, we may have to pay anywhere from 3000 to 4000 a month. We can pay part-time cooks on an hourly basis; check around for the going rate in your area. Servers: My servers will have the most interaction with customers, so they need to make a favorable impression and work well under pressure, meeting the demands of customers at several tables while maintaining a pleasant demeanor. There are two times of day for wait staff: very slow and very busy. Schedule your employees accordingly. The lunch rush, for example, starts around 11:30 a.m. and continues until 1:30 or 2 p.m. Restaurants are often slow again until the dinner crowd arrives around 5:30 to 6 p.m.
Because servers in most establishments earn a good portion of their income from tips, they're usually paid minimum wage or just slightly more. When my restaurant is new, I


may want to hire only experienced servers so we don't have to provide extensive training. As we become established, however, we should develop training systems to help both new, inexperienced employees and veteran servers understand our philosophy and the image we want to project. Wages and Salaries
Designation
Number of employee
Rs/person
Total
Chef
2
5000
10000
Helpers
5
1500
7500
Waiters
10
1650
16500
Cleaners
2
1200
2400
Managers
1
8000
8000
Security
1
1500
1500
Total
21
45900
Total Salary/ annum
550800


8. Role and responsibility: My designation in my business is as an owner but final authority of decision making still remain with my father. My role in the business is to deal with all kind decision except finance. I will play a role of marketing manager where I personally meet the supplier and decide which supplier is appropriate for us. Also decide which kind of promotional schemes to be provided to different customers on different occasions and would also take their suggestions and feed back. I will also have to play role of HR manager where I will decide which Chef should be recruit and select and also conduct interview for recruitment. I will delegate responsibility to each employee. I will decide percentage of commission. As an operation manger I will make list of order note and price list and margin. Also take a report of inventory. As an audit manager I will audit the balance sheet and other statement for making related decision.
Restauarant Owner
Security
Cleaners
Manager
Chef
Helper
Waiter & Server


9. Operational Plan All business manufacturing or non manufacturing should include an operation plan’s part of business plan. Here in these section describes the flow of goods and services from production to the customer. As a service provider I would also need this section in the business plan in order to explain chronological steps in completing a business transaction. Here in my firm, performance often depends on location, facility layout and personnel, which can, in, turn affect service quality (including such factors as reliability, responsiveness and assurance).The process of delivering this service quality is what distinguishes one new service venture from another and thus needs to be the focus of operation plan. Operation plan begin by describing the location of my new venture. Then listing the advantages of the location, listing down the zoning regulations or tax considerations, access to transportation and whether my suppliers would be conveniently located. Depending on the location of the business, I will have to file articles of incorporation or organization. (Approval is quick.) Once established, I’ll be able to secure a Sales Tax Identification Number, which registers my business with the State government. The next step: more paperwork. First, my physical space will have to meet all the local zoning laws governing restaurants. Then, once you install all my equipment, I have to pass muster with the local department of health services or a related restaurant regulation agency. (The governing bureaus vary state to state.) While these permits run less than Rs 5000, we might wait nine months for acceptance. The extensive application and inspection process includes documentation of counter space (regulators don't want raw meat mixing with the lettuce), kitchen equipment and ventilation systems. I may even have to supply a menu.
In most cases it’s also require for the owner (and perhaps the manager and the chef) to take a one- to two-day course on food safety for around Rs 1000. If we make it that far, we then have to schedule an appointment with the local fire inspector.


In operation plan I need to decide
 From whom will merchandise be purchased?
 How will the inventory control system operate?
 What are the storage needs of the restaurant and how will they be promoted?
 How will the goods flow to the customer?
 Chronologically what are the steps involved is a business transaction?
 What are the technology utilization requirements to service customers effectively?
These operational analysis guidelines may be used by the manager of a single food service establishment for self-analysis, or by the unit manager's supervisor. Receiving, Storage, Issuing and Inventory It is important to control the functions of receiving, storage, issuing and inventory because of the thousands of money of merchandise involved, to maintain the quality level of food, to insure that what was ordered was delivered and that what is needed is available. It may be that my profit is shrinking at my back door-by pilfering of food, by accepting products below specifications, by items being short on count or weight and, most often, by paying for items that did not arrive. One employee will be trained to verify both quantity and quality of food and supplies received. This employee should have the authority and responsibility for receiving, storage, and issuing. Procedures must be designed to maintain the quality of the product and to minimize the loss of food and supplies through spoilage and theft. Foods should be checked for weight, count, quality, price, and for what was ordered. Extensions on the delivery ticket need to be checked. Then there will be management schedule unannounced spot-check at the receiving area to insure that established receiving procedures are followed? Are foods stored immediately after receipt, stored in the proper place, at the correct temperature, and properly rotated? A particular individual should be responsible for the merchandise in the storage area and see that the storage areas are properly secured.


Are goods only issued by proper authorization and for the quantity of material required? for preparation? Are all storage areas locked when unattended? Important Assumptions
 The sales are assumed to be increasing @ 40%.
 The tax rate is considered to be 40%.
 The rate of interest for unsecured loans is taken as 18.5%.
 The rate of interest of owners’ capital is taken as 12.5%.
 In the starting case we just aim at having small percentage of market.
 We also assume a low recession growth.


10. Financial Plan We will start the Healthy Heart restaurant with the investment of Rs.11284546 /-. We expect to raise Rs. 1459658 /- of our own capital in the second years. Our borrowings from friends and family members and the SBI term loan. The details are given as under.
Break Even Analysis Our break-even analysis is based on the revenue / expenditure of / for total sales of meal / fast-food served, total cost of sales, and all operating expenses. These are presented as lump sum annual revenue, while the expenses are divided into variable and fixed expenses. All these figures are of 1t year only. The assumptions are not too conservative but less than an average sales and profit / unit consumption. The details are given in the annexure. Break-even point for first five year is as below:
Year 1
Year 2
Year 3
Year 4
Year 5
Break Even
15,619,548.35
5554774.079
4388599.998
3839043.512
3887547.806
Means Of Finance
Year 1
Year 2
Owner's Capital
2013069
455232.6
Bank Loan
6988557
705232.6
Unsecured Loan
1750000
250000
Total
10751626
1410465
Unsecured Loan
Year 1
Year 2
Shri Dinesh Mahadevwala
550000
100000
Shri Mayur patel
350000
50000
Shri Chetan Singh
850000
100000
Total
1750000
250000


Pro forma Balance Sheet A Balance sheet or statement of financial position is a summary of the value of all assets, liabilities and owners' equity for an organization or individual on a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot" of a company's financial condition on a given date. Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time, instead of a period of time.
Here Healthy Heart Restaurant company balance sheet has three parts: assets, liabilities and shareholders' equity. The main categories of assets are usually listed first and are followed by the liabilities. The difference between the assets and the liabilities is known as the net assets or the net worth of the company. According to the accounting equation,
-15,000,000
-10,000,000
-5,000,000
0
5,000,000
10,000,000
15,000,000
20,000,000
1
2
3
4
5
BEP analysis
PAT
Contribution=Sales-Variable Cost
Now Contribution/sales
break even =Fixed Cost/Contribution
Margin of Safety
PAT
Contribution=Sales-Variable Cost
Now Contribution/sales
break even =Fixed Cost/Contribution
Margin of Safety


net worth must equal assets minus liabilities. The table shows projected balance sheet for five years
ParticularsYear1 Year 2 Year3Year4Year5Sources Of FundOwner's Capital 2,013,068.932,216,667.861,939,584.381,697,136.331,484,994.29Term Loan (Dena Bank) 6,988,556.586,993,789.136,223,789.135,453,789.134,683,789.13Unsecured Loan 1,750,000.002,323,750.002,753,643.753,263,067.843,866,735.39Reserves and Surplus 000294,117.96225,536.74Current LiablitiesSundry Creditors 394,375.20616,551.60770,689.50963,361.881,059,698.06Total 11,146,000.7112,150,758.5911,687,706.7611,671,473.1411,320,753.61Application of FundLand 8,400,000.008,400,000.008,400,000.008,400,000.008,400,000.00Net Building 675,000.001,012,500.00911,250.00820,125.00738,112.50Net Equipments 477,445.50429,700.95386,730.86348,057.77313,251.99Net Furniture 178,830.00160,947.00144,852.30130,367.07117,330.36Net Movable FA 161,010.00187,209.00168,488.10151,639.2915,163.93Miscellaneous Assets 6,656.858,406.759,247.4310,172.1711,189.38Total FA9,898,942.3510,198,763.7010,020,568.699,860,361.309,595,048.16Sundry Debtors 0.000.000.000.000.00Closing Inventory 37,722.7053,427.5066,784.3883,480.4791,828.52Cash & Bank1,209,335.651898567.381,600,353.701,727,631.371,633,876.92Total Current Assets1,247,058.351,951,994.881,667,138.081,811,111.841,725,705.44Total Assets11,146,000.7012,150,758.5811,687,706.7711,671,473.1411,320,753.60


Pro forma 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.
Year 1Year 2Year 3Year 4Year 5Sales of Good3,943,7526,165,5167,706,8959,633,61910,596,981Total SalesCost of Consumption2,632,2162,494,0552,618,7582,749,6962,887,181Salary And wages550,8001,102,8001,130,3701,158,6291,187,595Cost of goods Sold3,183,0163,596,8553,749,1283,908,3254,074,776Gross Profit760,7362,568,6613,957,7675,725,2946,522,205Advertise17,75019,52521,47817,18215,464Partners Renumeration144,000240,000360,000480,000600,000Power154,920183,960193,158202,816212,957Fuel And gas71,220125,280156,600195,750244,688Telephone15,00015,00015,37515,75916,153Trasnportation 5,0405,0405,5446,0986,708Audit Fees11,20411,20411,20411,20411,204Insurance12,00012,00012,00012,00012,000Cost Of maintance44,45244,45244,45244,45244,452Miscellaneous Expenses44,00735,20617,60317,60317,603Depreciation173,431205,787185,209166,688150,019Operating expense693,024897,4541,022,6231,169,5521,331,248Operating Profit-67,712-1,671,207-2,935,144-4,555,742-5,190,957Non_operating SurplusEBIT67,7112,774,0054,065,5145,714,3696,378,551Int On term loan768,741769,317684,617599,917515,217Int on Unsecured Loans323,750429,894509,424603,668715,346Int on owners Capital251,634277,083242,448212,142185,624PBT-1,276,4141,297,7112,629,0254,298,6434,962,364Less Income Tax@35%0454,199920,1591,504,5251,736,827PAT-1,276,414843,5121,708,8662,794,1183,225,537Pro forma Profit and Loss A/C


11. Risk factors: Every new venture will be faced with some potential hazards, given the particular industry and competitive environment. So it is important for me as an entrepreneur to make assessment of risk in the following manner. First to indicate potential risk to the business and the discussion of might happen if these risks turn into reality. And finally I would suggest a strategy that can be employed either to prevent, minimize or respond to the risk should they occur A new entry involves considerable risk for me and my firm. Risk here refers to the probability, and magnitude, of downside loss, which could result in bankruptcy. The risk of downside loss is partly derived from my uncertainties over market demand, technological development and the actions of competitors. While it is true that more restaurants die than live, there’s a say that the ones that die are the ones that never had a chance to survive. Many things can go wrong with a restaurant. But most of these flaws can be fixed at the planning stage. Overpricing is the number one killer. The second is poor control and mismanagement. This is why it is important to work with someone who knows the business and not just team up with a few friends, none of whom have any idea about running a restaurant, and hire a manager to do it for you. If I would be taking an existing restaurant format and opening a branch in a different city, then it is most important for me to understand the demographics of my new customers and price my menu accordingly. At the most we can use strategies to reduce or some or all of these uncertainties and there by reduce the risk of downward loss. These strategies depend on me, whether to choice about which customer group to serve and how to serve them i.e. scope.


As an angel investor, I would make sure that he is convinced about the business plan. Eat at similar restaurants in the city and give feedback to your business as a customer. Look at pricing and marketing plans, check out the quality of the food and service. Once you are convinced about all these, you can be hands off and leave the operations to your partners. Do visit as often as possible, so that you can pick up any slip-ups in quality. As it’s a new entry into the market I have many risk factors, whether the restaurant will work or not, so to safe guard myself I would use narrow scope strategy, which would help me form a specific and small product range to a small number of customers groups in order to satisfy particular need. And by using these strategies I may also expertise or may not, but would help me form a particular group. So with these strategy I can reduce the risk associated with competition and other risk which is associated that market demands does not materializes as expected or change over the time. With more Indians travelling abroad and sampling international restaurants and cuisines, they are ready to experiment with their food. All this bodes well for the industry and my investment. And If I have a product that scores 7 out of 10, I have a hit on my hands. "It is like any other business. You have to control your costs and run a tight operation. If you manage to keep your prices down and your employees' hands off the till, that's half the battle won."


12. Exit strategy: Every entrepreneur who starts a new venture should think about an exit strategy. A number of possible exit strategies include an IPO (initial public offering), private sale of stock, succession by family member or a non family member, merger with another company or liquidation of the company. With the current boom in the trade, chances are if I have found the right restaurant to invest in that I have presently, then I have very few reasons to want to exit. The restaurant industry is looking to hit the stock market as well, and several large ones are planning IPOs of their own. With retail continuing to be the flavour of the stock markets, restaurant business would be the follow through to the spate of multiplex IPOs that the markets witnessed in the last year. "There are various line expansions planned like ready-to-eat meals. Selling your stake in the market once the restaurant goes public is the first exit route for the angel investor. If the IPO route is not one that my management or partners want to take, there are many people waiting to lay their hands on a thriving business. Once you pass the word around it is easy to find interested parties to sell your stake to. If the restaurant is doing well, chances are the other partners will buy out your stake. They can then decide to increase the valuation of the restaurant and invite interested parties to become prospective partners. It is a fairly easy to exit from business, provided it is a clean one, according to industry experts. Traditionally the finances behind the restaurant trade have been a gray area, with a mixture of white and black money.



With more and more professionals entering the business, this is changing and investing and accounting are becoming increasingly transparent. So if your restaurant is run on legitimate money, then your exit route is a simple and clear one. If dubious accounting has been a norm, then it might be difficult to untangle your investments. This is why it is important that you know your partners well and take time out to assess the financial and business plan of the restaurant before you commit your money to it. The worst-case scenario is also worth considering. Standalone restaurants that fail to capture an audience are usually shut down. Like any business, the assets are sold and the partners share the remaining consideration in a pre-decided ratio. If you want to exit your share of the business while the others want to continue with it, then you can either sell your stake to a third party or to the existing partners. Ensure that the initial partnership deed or memorandum of association spells out possible exist routes including selling off to a third party. Unless my restaurant is a disaster from day one, chances are I will not lose all of my investment. Restaurants usually manage to cover operational costs. If I wind up the business, the sale of furniture and fixtures would help in recovering some of my investment. The restaurant industry in urban India has metamorphosed in the past decade. From coffee houses with capped waiters in khaki to champagne brunches with a five-figure price tag, restaurants and restauranteurs have taken a giant leap forward.


13. Annexure Cost of Project Furniture According to this plan, we will need 8 rectangular tables, 9 round tables, and 52 chairs. Price of a single chair on an average is about Rs. 1500, for rectangular tables are Rs. 2250, and that of round tables is about Rs. 3000. Considering this information the total furniture cost comes out to be Rs. 122250. Cutlery: The cost of cutlery ranging from utensils, spoons, forks, and all those things will cost around Rs. 130,000. Table Cloth and Curtains: The cost of table cloth and curtains will be approximately Rs. 10,000 Lighting Instruments: Cost of illuminating the restaurant will be around Rs. 1500 and for the decorative lamps, it will be around Rs. 6000. Audio Instruments: A good CD system is required to play music in the restaurant which will cost around Rs. 4500. Also a set of good CDs to play the soft music will cost around Rs. 500. Water Tanks: Three water tanks will be required; one for the toilet, one for the wash basin, and one main tank that should be filled in the beginning. Water tank for the toilet will be of the capacity should be 1000 litres which costs Rs. 4500. Water tank for wash basin will be of 250 liters which costs Rs 1250, and the large tank of capacity 5000 litres will cost Rs. 20,500. One thing that can be done is to place a central tank and give connections to wash basin, toilet and kitchen which should be of the capacity of 10,000 litres and costs around 40,000. Constructing a cement tank will cost around 26,000 which is the most likely option. Toileteries:
In our restaurant, 4 wash basins will be kept, 2 for the Men bathroom and 2 for the ladies bathroom. Also, 2 toilet seats will be kept, again 1 for the Men bathroom and 1 for the


ladies bathroom. Cost of one wash basin costs approximately Rs. 1400 and that of toilet seat will be around Rs. 2200. Therefore, the total cost of the bathroom accessories will be around Rs. 14,000 including towels, soaps, and mirrors in front of the wash basins. Kitchen Appliances: Kitchen appliances including Stove, cooking utensils, microwave ovens, big refrigerator, and gas cylinders costs as follows: Stove: 7000/- (4-burner) x 2 = 14,000/- Cooking Utensils: 22,000/- Microwave oven: 11,900/- Refrigerator: 15,650/- (280L capacity) Gas Cylinders: Approximately 380/- (required 2 daily) Total: 65,000/- Approximately Electricity cost: The electricity used in the restaurant would be costing around Rs.3000 per month. Plumbing: The plumbing costs includes the cost of taps, pipes, water storage tanks, washbasins, etc. it would come around Rs.100000. And the cost of water connection and maintenance would come around Rs.5000 per month. Artifacts and Decorative Items: This would cost around Rs.1.5 lakhs. It includes the flower vas, picture frames, other decorative items, mirrors, etc. Miscellaneous: Other miscellaneous cost would be around Rs 45000.


Break Even Point analysis
Year 1 Year 2Year 3Year 4Year 5Total Sales3,943,752.006,165,516.007,706,895.009,633,618.7510,596,980.63Total Annual Expense(Veg.& fruits)1,536,832.501,536,832.501,613,674.131,694,357.831,779,075.72Total Annual Expense(SIP)1,095,383.50957,222.831,005,083.981,055,338.171,108,105.08Total Annual Expense(Power)154,920.00183,960.00193,158.00202,815.90212,956.70Total Annual Expense(Fuel)71,220.00125,280.00156,600.00195,750.00244,687.50Total Annual Expense(telephone)15,000.0015,000.0015,375.0015,759.3816,153.36Salary& Wages550,800.001,102,800.001,130,370.001,158,629.251,187,594.98Cost of maintance44,452.4344,452.4344,452.4344,452.4344,452.43Miscelineous Expenses44,007.3635,205.8917,602.9517,602.9517,602.953,512,615.794,000,753.654,176,316.494,384,705.914,610,628.72Fixed Coststotal Annual (Advertising)17,750.0019,525.0021,477.5017,182.0015,463.80total Annual expense( Transport)5,040.005,040.005,544.006,098.406,708.24Insurance Policy11,204.4511,204.4511,204.4511,204.4511,204.45Audit Fees1200012000120001200012000Depreciation173,430.50205,787.45185,208.71166,687.84150,019.05Partners Remuneration144,000.00240,000.00360,000.00480,000.00600,000.00Interest On term Loan768,741.22769,316.80684,616.80599,916.80515,216.80Interest on Deposist323,750.00429,893.75509,424.09603,667.55715,346.05Interst on owners Capital251,633.62277,083.49242,448.03212,142.03185,624.291,689,799.791,950,325.942,010,446.082,091,717.072,196,118.88total Expenses5,202,415.585,951,079.596,186,762.576,476,422.986,806,747.60PAT-1,258,664214,4361,520,1323,157,1963,790,233Contribution=Sales- Variable Cost431,136.212,164,762.353,530,578.515,248,912.845,986,351.91Now Contribution/sales10.93%35.11%45.81%54.49%56.49%break even =Fixed Cost/Contribution15457183.015554774.0794388599.9983839043.5123887547.806Margin of Safety -11,513,431.01610,741.923,318,295.005,794,575.246,709,432.82


Interest Calculation
Unsecured LoansYear 1 Year 2 Year 3Year 4Year 5Total Unsucered Loan1750000.002323750.002753643.753263067.843866735.39According to int. rate @18.5% annual int. on total deposits323750.00429893.75509424.09603667.55715346.05Owners CapitalTotal Owners' Capital2013068.932216667.861939584.381697136.331484994.29Annual interest rate @12.5% 251633.62277083.48242448.05212142.04185624.29Interest Calculation on Unsucured Loan and Owners Capital
Business plan On Healthy Heart Restaurant
Roll No: 064127 (Kalpesh Bharucha) Page 39
14. Bibliography
1. Financial Management : Theory & practice
2. Entrepreneurship: Theory, process, Practice 6th Edition By KURATO HODGETTS
3. Entrepreneurship: Hisrich Peters Shepherd
4. Palo Alto Business plan Software
5. Reference to Business Plan on Sudhaa Organic Food.
6. Referring to website www.TimberlineSteakhouse.com
7. Article On “Invest in restaurant” by veena Veenugopal ,Outlook Money