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PURPOSE The purpose to start this business is to serve people of new era with a different and the most competitive style. We want to help those people who could not spend time in their busy schedule to take healthy food by diet sandwich which is 100% nutrient, healthy. The prime purpose is to generate profit by providing superb customer services. We aim to be leader in providing quality food items that fit into a balanced diet. Our aim is to provide the hygienic and delicious tastes of sandwich that the customers have never tasted before. We want to add convenience in the lives of fast food lovers by providing them the most wonderful dining experiences. THE RESTAURANT INDUSTRY - REVIEW Food service business is one of the largest industries in the country. This number has been increasing for the past seven years. In the past five years the restaurant industry has outperformed the national GNP by 40%. The reasons given by the Folkney Report (November 1994) are 1) lifestyle changes, 2) economic climate, and 3) Increase of product variety. There are 600 new restaurants opening every month and over 200 more needed to keep pace with increasing demand.
TRENDS & STRATEGIC OPPORTUNITIES The predicated growth trend is very positive both in short and long-term projections. Folkney states that “as modern living creates more demands, people will be compelled to eat more meals away from home”. In 1988 The National Restaurant Association released the Foodservice Industry 2000 report that forecasted how the industry might look in the year 2000. Some highlights from the panel's findings:
Consumers will spend a greater proportion of their food away from home. Independent operators and entrepreneurs will be the main source of new restaurant concepts. Nutritional concerns will be critical at all types of foodservice operations, and food flavors will be important. Environmental concerns will receive increased attention.
WHO EATS FAST FOOD The food concept and product image will attract majority of the
The student -- more and more young people have developed healthy eating habits. Some also go through a "health food phase" while in college. The health conscious person of any age or sex -- this includes anyone on a restricted or prescribed diet or those who have committed to a healthy diet. Curious and open-minded -- "if you try it, you will like it." Through marketing, publicity, and word-of-mouth, people will seek out a new experience and learn that nutritious food can be tasty, fun, convenient, and inexpensive.
WHEN DO PEOPLE EAT FAST FOOD Lunch (44%) Morning snack (40%) Afternoon snack (31%) Dinner (19%) Evening snack (14%) Breakfast (12%)
The average person (over the age of 12) eats at a fast-food restaurant for an average of 9.2 times monthly. PROPOSED BUSINESS LEGAL STATUS Although the legal status of business tends to play an important role in any setup, the proposed fast food business is assumed to operate on a partnership of 5 members which may extend in case of addition of new products that might add significant Business to the existing setup. INDUSTRY ANALYSIS Although the restaurant industry is very competitive, the lifestyle changes created by modern living continue to fuel its steady growth. More and more people have less time, resources, and ability to cook for themselves. Trends are very important and we are tasking interest to provide lighter, healthier foods at moderate to low prices. The keys to success in achieving our goals are: • • • • • Product quality. Not only great food but great service and a fun-entertaining atmosphere. Managing finances to enable us to open new locations. Controlling costs. Focusing on themes that have customer appeal. Creation of spectacular design and layout at each facility.
Critical Success Factors for the local sandwich shop could include: • Establish and maintain an exclusive relationship with a baker to supply on a daily basis, 6 days per week, a range of speciality and exclusive breads baked according to proprietary recipes • Purchase an extensive range of high quality meats, cheeses, fruits & vegetables • Recruit and train: Friendly people with the right attitude to the customer (‘the customer is always right’) Highly efficient, creative people who enjoy making the best sandwiches for customers • Encourage innovative product suggestions from customers and staff • Charge a premium price but one which, together with the product and the service, ensures customer value-for-money • Promote, make and serve fresh, exclusive, attractive, tasty, well-presented sandwiches always. OPERATIONS PLAN Fast food is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with fast preparation and served to the customer in a packaged form for takeout take-away or can be consumed at the store or the restaurant. The operational plan is an essential component to our business plan and it tells the reviewer how we are going to get your product/service out to market. That is, how we are going to get your product out of the production stage to the doorstep of you target customer. Speaking about our outlet, we have three sections in total in our store, which will be catering to different kinds of customers according to their taste and preferences. We have positioned our products/store as value for money and quality fast food but at the same time we are not serving our customers, we want our customers to help themselves this strategy will also work as word of mouth promotion where the experienced customers will tell new customers creating a unique interest in the minds of potential customers. 4
PRODUCTION PROCESS Preparing a Sandwich Since it’s a fast food which can be prepared very quickly as half of the things used to produce something is already ready or prepared now preparing a Sandwich will start with having all the necessary vegetables on its place which means having our inventories on place, then the process of making the food that’s the sandwich will start followed by the Finished product that’s sandwich having Inventories On place Work in Progress Finished Product In order to meet the demand of inventories which we will be having we will be using sum of the production operation techniques which will see that we are making optimum utilization of resources and minimum wastage. Manufacturing Plan Once an order is received, the associate behind the service counter will begin to assemble the customers order based on the sales data which will be displayed on a monitor. Each associate behind the service counter will be responsible for a certain aspect of the assembly line such as; placing the necessary ingredient in the bread, adding the required condiments, and making sure the meal is properly wrapped before delivery and set on a serving container. The assembly line will have placards or assembly instructions showing how each meal should look and what condiments need to be on the sandwich. This will ensure that each sandwich is done the same and will maintain quality. There will also be an associate in the rear of the kitchen who will supply the production line with more products.
Production process flow Raw Materials Cutting Mixing Filling Serving
MUMMIES SANDWICH has found something that allows us to improve quality and lower costs. 1. Improved Quality The benefits of a better tasting Sandwich should be fairly apparent. Unless of course you prefer aged sandwich, the fresher sandwich is going to be higher quality if made fresh just for you. The less obvious benefit is the higher quality customer service that arises from the JIT sandwich assembly. When “Mummies Sandwich” waits for you to order the sandwich, we do a few things to improve customer service. This higher quality customer service is subject to our ability to actually produce faster. Without this ability, “Mummies Sandwich” ordering costs would be sky-high because the costs associated with ordering would be the loss of customers tired of ordering fast food that really is not fast.
Nutrition calculator “Mummies Sandwich” serves a wide range of quality sandwich that can easily fit into individual diet needs based on the principles of balance, variety and moderation. Our varied menu and range of serving sizes make it easy to fit our food into a balanced diet and to create a range of meal combinations that fall within recommended guidelines for calories, fat and other nutrient WE are also helping you learn more about our food by adding nutrition information on some of our packaging. Some of our packaging now includes the “Mummies Sandwich” Nutrition Chart. Our goal is to provide you with the information you need to assist you in making sensible decisions about balance, variety and moderation in your diet. 2. Lower Costs The holding costs for sandwich parts are fairly high because of its spoilage costs. Instead of having a shelf life of months or weeks, the sandwich needs to be sold within 15 minutes or so. The holding costs go from roughly 20% per week to 100% per hour. In terms of operating the business, it's as easy as establishing a working relationship with a catering service to supply the sandwiches on a wholesale basis, while building a customer base to purchase the lunch meals. Design a menu featuring all the sandwiches, salads and other items available and distribute the menu to office buildings and factories. Customers would simply place their lunch orders in the morning or the day before. Additionally, lunch orders could be placed by way of fax, phone or e-mail. But we will be delivering our products to our customers within a Geographical Area of first 5km (Home Delivery) from our Store if customers bill exceeds Rs200/- and he need to pay 15% of the bill amount extra as delivery charges which will be lowered as the bill amount increases in percent.
INVENTORY MANAGEMENT SYSTEM a) Just-In-Time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs. Now as a store of fast foods we are in instant need of vegetables and other grocery requirements as and when needed or required. This we will come to know through our Chefs such as the presence or absence of a part. Quick communication of the consumption of old stock which triggers new stock to be ordered is key to JIT and inventory reduction. This saves warehouse space and costs. In order to meet our requirements we will be having tie ups with Vegetable Vendor and 1 Grocery store. b) Economic Order Quantity (EOQ) is the level of inventory that minimizes the total inventory holding costs and ordering costs. The framework used to determine this order quantity is also known as Wilson EOQ Model. We will order on Daily basis with one order per day and as per our requirements say for example in the morning we order we will see to it that with that order our requirement is fulfilled of the day, this will reduce the transportation cost for 1 more order or unnecessary order . c) Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. we will be having tie ups with sum of the vendors of vegetables and grocery stores, so that our needed requirements doesn’t get hampered as we will be following JIT and EOQ methods to avoid unnecessary wastage of resources and money.
IDENTIFYING THE LOCATION For establishing fast food (sandwich) restaurants we have selected mainly three areas around the Coimbatore. They are 1. Peelamedu (Near Hopes College) 2. RS Puram 3. Gandhipuram
PEELAMEDU (Near Hopes College): In Coimbatore Peelamedu is one of the areas where large number of eduacational Institutes is present. Hence majority of the residents in Peelamedu are student community. As already mentioned earlier students are one of the main customers for sandwich restaurant. Since students are very busy in going to the colleges during morning they prefer to take healthy food in less time. For them Sandwich is the most suitable food to fulfill their desires. More over them can get sandwiches any time. Hopes College is present at centre of the educational institutes in Peelamedu. The student population density is more around the hopes college when compared to other areas in Peelamedu. Apart from the educational institutes there are many offices present around the hopes college. Hence in addition to the student customers we can concentrate in office employees too. Since Peelamedu is highly residential area home delivery will be very easy. The transportation cost will also very less. For these reasons Peelamedu was selected to establish a sandwich industry.
RS PURAM :
RS Puram is one of the areas in Coimbatore where more educated people and more health conscious people are present. For our sandwich restaurant the main target customers are health conscious people and open minded people. Since the cost for establishing sandwich restaurant is slightly expensive in RS Puram the competitors are very less. Our operating strategy is to compensate the cost with the more volume of customers. Apart from this life style is one of the factors which have a huge impact on business. RS Puram people have a rich and modern life style when compared to others. Hence the people in RS Puram prefer to take sandwiches as one of their major food in daily life. With respect to supply chain RS Puram is very nearby to Gandhipuram which is the Main bazaar for the city where we can purchase raw materials like vegetables, Bread etc. So the transportation is cheap and easy. Hence based on the economical environment and life style of the residents RS Puram was selected to establish our sandwich restaurant. GANDHIPURAM : Gandhipuram is the heart of Coimbatore city. The main shopping bazaar in Coimbatore is present in Gandhipuram. Since it is a main bazaar the residents of Gandhipuram are very less but the passers by are more. Our Target customers in Gandhipuram is mainly shoppers and shop owners. Generally people prefer snacks during their shopping. If the snacks were healthy and easily available (like sandwiches) they choose to take. So by promoting the advantages of sandwiches we can get more customers in our restaurant. Regular income can be generated by making agreement with shop owners for daily delivery. The transportation of raw materials will also be very easy.
APPLYING DESIGN PRINCIPLES TO LAYOUT Space analysis for the following functional areas: • • • • Receiving Storage Office / counter Pre-preparation • • • • Final (Hot-food) preparation Employee locker room and toilet Service areas Ware washing
OPERATING FACILITIES AND EQUIPMENT TO RUN THE BUSINESS 1. Kitchen Equipment Commercial Fryers Hot Food Storage Steam Equipment Commercial Ovens Wood Cabinet Carts Work Tables Tissue rolls Cutlery sets Freezers Generators Microwaves Waste bins Restaurant Toasters
2. Kitchen apparels aprons bandannas caps& hats chef coats chef hats face masks finger guard kitchen gloves
3. Cooking equipment 11
Sandwich Grills Sandwich Press 4. Stationary
Register rolls Sales book Tape products
How we will manage to serve best and fast to keep up to our customers expectations:• Use of paper products and plastic wraps keeps labor costs down: Pre-sliced cheese, packs of jellies and ketchup, getting the customer to help them. A limited menu restricted to items with a short preparation time would make fast service possible and would also be useful in streamlining operations. • • Utilization of time-saving equipment: Microwave, post mix beverage dispensers etc. Utilization of labor-saving equipment: Ware washers, automatic potato peelers and automatic coffee brewers. Access to Raw Materials The “Assembly line” model is common in foodservice design: A salad/cold food preparation area with access to raw materials: Flow in the dish washing process Access to Utensils and Equipment: • Utensil drawer in each worktable, for each employee, or one drawer for each 4 linear feet of worktable • Overhead utensil racks (ceiling-hung) in hot-food and cold-food preparation areas & near steam-jacketed kettles for paddles or wire whips • Shelving under each worktable for larger utensils • Wall-hung over shelf above each table • Racks for mixer parts and bowls • Large racks in bakery, hot-food preparation, and salad preparation areas for sheet pans, baking pans, and other large utensils
• Special storage racks for food processor blades and parts • Large rack or special storage room for catering supplies • Knife rack in each preparation area
Layout of our Sandwich Shop
COMPETITIVE EDGE Location: Location is critical to success. Our store is on Main Street or just off Main Street, there by taking advantage of walk-by and drive by traffic. But we also need adequate parking to make shopping at our store convenient for drivers. Convenience: Customers are willing to pay a little bit more for good food and the convenience of being able to get what they want without having to travel out of town. Our customers will purchase our food because it is reliable and delicious. High quality: Focusing on high quality food, we will draw customers from the competition, as well as create a local market that has not existed before. If the prices are reasonable and the food is good, we will have growth through repeat business. COMPETITIVE STRATEGY There are three major ways in which we will create an advantage over our competitors:
1. Product identity, quality, and novelty 2. High employee motivation and good sales attitude 3. Innovative and aggressive service options
FOOD QUALITY ASSURANCE The bedrock of all our socially responsible supply efforts is our commitment to ensuring that all the foods and beverages we serve our customers are safe. We do business only with suppliers that share this commitment and work with them to continuously monitor, test, and track our ingredients. We have stringent standards and checks in place in critical areas throughout the food supply chain—from "fork to farm." Our Operations and Training manual for restaurant managers includes a whole chapter on food safety, with requirements and guidance that cover all the critical control points at the restaurant level—from supply and delivery through storage, preparation, and holding. Food safety procedures are monitored by staff operations consultants, who regularly visit our restaurants to advise managers on operations. The consultants also conduct periodic restaurant operations reviews, which include assessments of food safety procedures. Managers are expected to correct any irregularities identified.
Systems & Controls A big emphasis is being placed on extensive research into the quality and integrity of our products. They will constantly be tested for our own high standards of freshness and purity. Food costs and inventory control will be handled by our computer system and checked daily by management. How orders are taken Similar to most fast food establishments’, orders will be taken on the right side of the service counter where money will be exchanged and the customer will be issued a receipt containing the order selection and a claim number. Cups will be dispensed so the customer can select their desired drink while waiting for their individual orders to come up. When the order is ready, the associate on the left side of the counter will call out the claim number for the customer to pickup.
Packaging Packaging design is a fundamental part of our top quality customer service. Many of our menu offerings have unique packaging designs to provide insulation, help ensure food safety, and make them convenient for carryout. This gives us many ongoing opportunities to minimize the environmental impacts of our packaging and to provide industry leadership in natural resource conservation.
Daily operations and production The day-to-day operations of the restaurant from opening to close will be in accordance to industry standards and norms stipulated. Our plan conveys to any reader that management has a sound plan for operating the restaurant. Operational issues such as scheduling, departmental job functions, ordering and receiving, menu production, service, general safety procedures and maintenance are some of the matters which would be cautiously catered to. We standardize our product and service by restricted menu items. To adopt “Oursis-better-than-theirs” strategy by using a combination of focus-differentiation strategy keyed to 16
product quality. Sales and marketing efforts are focused on the individual customer basis, to suit their requirements and taste, to develop the superiority perception in customer’s view. Customer service We plan to adhere to establishing service attitudes and policies for effective quality functioning and service provision. All the customer complaints which would have to be handled and how we will go about getting customer feedback such as surveys or through mystery shoppers will all be a part of the process of adhering to quality standards. Management controls Operating a restaurant on a day-to-day basis requires established systems and controls. Many seasoned restaurateurs have established systems to help them control cost and maintain excellence. Unfortunately, though, some startup restaurateurs open their doors unprepared to industry expert’s analysis, we plan to incorporate management controls, tasks and support systems into our plan. FINANCE PLAN Finance department is responsible to arrange the cash inflows of the business. It also identifies the sources from where the finances can obtain to run the business operations smoothly. Capitalization needs: The estimated capitalization needed to open the business is approximately 30 lakhs and the planned sources for funding it are personal investments of partners, bank loan and credit union. Average Sale per Customer = Total Sales / Number of Customer transactions This can be done by the year, month, week or day. The important thing is sales members need a target to aim for and this is one of the most effective ways of doing this Sales per Full time Team Member = Total Sales / Number of full time equivalent team members.
Break even analysis
Table 1: Income and expenditure statement Year 1 10000000 30000 30000 3770000 13000 100000 2820000 5000 234000 62500 57000 19500 Year 2 24000000 1300000 60000 3770000 52000 260000 7800000 5000 234000 250000 75000 72000 Year 3 27300000 1365000 75000 3770000 52000 260000 10000000 6000 234000 250000 78000 75000 18 Year 4 28765000 1400000 90000 3800000 55000 265000 10000000 7000 234000 300000 85000 85000 Year 5 30098250 1500000 95000 3900000 60000 270000 10500000 7000 234000 300000 95000 95000 Year 6 31603150 1575000 100000 4000000 75000 275000 10750000 9000 234000 325000 100000 100000
Sales Advertising Telephones Rent & Outgoings Water Electricity Wages Postage Insurance & Workers Depreciation Gas Fuel
Purchases Total Expenses EBT TAX @ 35% EAT
909000 318150 590850 0.87 514039.5
2322000 812700 1509300 0.756 1141030.8
2985000 1044750 1940250 0.658 1276684.5
3814500 1335075 2479425 0.572 1418231.1
4012800 1404480 2608320
4579250 1602737.5 2976512.5
PVIF @ 15% PV
0.497 0.432 1296335.04 1285853.4
Table 2: Total Cash flow Year 1 971500 62500 909000 318150 590850 62500 653350 Year 2 2572000 250000 2322000 812700 1509300 250000 1759300 Year 3 3235000 250000 2985000 1044750 1940250 250000 2190250 Year 4 4114500 300000 3814500 1335075 2479425 300000 2779425 Year 5 4312800 300000 4012800 1404480 2608320 300000 2908320 Year 6 4904250 325000 4579250 1602738 2976513 325000 3301513
EBDIT (-)Depreciation EBT (-)TAX @ 35% EAT (+)Depreciation Cash flow
NPV Profitability index Pay back period Initial investment Require rate of return
4800968.186 2.600322729 37 months 3000000 15%
MANAGEMENT REQUIRED TO RUN THE BUSINESS 1. Fast food manager 2. Quality assurance manager Designation/type Owner kitchen supervisor shift supervisor Cook take away order taker dish washer Cleaner guard(12hour) Total No 5 2 3 4 1 2 1 1 19
Cooks: Prepare food in a prompt, safe and clean manner to ensure complete customer satisfaction. V.P. Quality: Sets standards of quality to meet all state and federal health and safety guidelines. Quality Manager: To assist V.P. of quality in obtaining all state and federal health and safety guidelines, as well as delegation of tasks to ensure these guidelines are being maintained. Quality Supervisor: Oversees, and assists individual restaurant and its maintenance associates to ensure the company, as well as state and federal health and safety guidelines are being maintained or exceeded.
Maintenance: Carries out all functions as assigned by quality manager or quality supervisor with a constant regard for fellow associates, and customers’ well being.
MARKETING PLAN A comprehensive business plan includes a sound marketing plan. Owner, investors and bankers want to know you have a proactive plan to grow your business. You can’t rely on instant popularity and simple word-of-mouth marketing just because some restaurants, but not many, open their doors to instant success. Objectives: • • • Goals: • • • USP “Diet sandwiches” is our USP. We care for the calorie that our sandwiches add to your health. We give sandwiches that will not make you sluggish in the morning and that can kill your hunger during the noon, will give you a light feel for your dinner. We are here to break up the common perception that fast food destroys your health. We value your health than anything else. Service differentiation We are providing the customers with diet sandwich so it maintains their health. We will be providing fast food in area of 5km. from our fast food hub. This is a unique positioning were in the customer will perceive us different from other fast food outlets. Segmentation Create Awareness through intensive marketing Attract people and impart the experience Break even by the third year of establishment Shall deliver what is promised, promptly Shall adapt to the changing trends and deliver the best accordingly Shall strive to maintain harmonious relationship with customers & suppliers
Brand name: Mummies Sandwich We value your health
For any business it needs to identify the segment they are going to segment the population. We segment people between age group who are so conscious about their health. We here by segment our customers into elite (who are youngsters between age 20-30) and premium (people between age group 30-45). Segmentation helps to cater each individual segment that has commonality. Targeting We cater mainly to these two segments that will take care of our sales. Once we are done with our segmentation we are in to how we will target our segment. Unlike a common segment where you have wide range of population with different needs, segmentation helps better in targeting our segment. You have a population with a commonality which you can tap. We focus our two segments so that they feel their needs are satisfied to the fullest possible. Positioning Now the biggest challenge in front of us is how we are going to position our products in front of our segments. To our elite segment we would like to position our sandwiches as tasty, trendy, with more varieties. We make them feel that we make them trendy, youthful with the fast foods but with concern for their health. Once we could position ourselves to our elite customers here comes our premium customers. Here lies our greatest challenge and also opportunity. They are the customers who we are looking for. They are the ones who are really health conscious but need our sandwiches to cope with their fast moving schedules. To them we are going to position our sandwich as a “Sandwich of their money, health and time”. Marketing mix Product Our main product is sandwich. We are specializing in producing sandwiches that are not going to affect your health. We will have customization that is our customers will get their choice of taste. We use product differentiation strategy were we differentiate our product we make the customer to feel that we are not offering them the ordinary sandwiches that everyone offers.
Price We are going to use cost plus pricing strategy. Since we are going to differentiate our product from the others we are going have this strategy. Customers will not feel the difference in our price even if it is high as it appears to be a different one.
Promotion The foremost activity and most important among the marketing mix is promotion. We need to create the awareness among the people about our sandwiches. Or else it will be considering as yet another sandwich in the market that has evolved to add fuel to existing health problems. It is our campaign that is going to bring out the innovation that we have brought in sandwich. One our advertisement campaign succeeds sure our sandwich will stand on its own. We would like to go for food festivals, sponsoring events in colleges, through Fm and hoardings. Place This is where we are one step ahead of our competitors. We see to that we are nearer to our customers. In Coimbatore our outlets are in three places. 1) Gandhipuram 2) Peelamedu 3) R s puram.
LONG-TERM DEVELOPMENT GOALS DIET SANDWICH is an innovative concept that targets a new, growing market. We assume that the market will respond, and grow quickly in the next 5 years. Our goals are to create a reputation of quality, consistency and security (safety of food) that will make us the leader of a new style of dining. Strategies: Our marketing efforts will be concentrated on take-out and delivery, the areas of most promising growth. As the market changes, new products may be added to maintain sales.
Milestones: After the restaurant opens, we will keep a close eye on sales and profit. If we are on target at the end of year 1, we will look to expand it. Risk evaluation: With any new venture, there is risk involved. The success of our project hinges on the strength and acceptance of a fairly new market. After year 1, we expect some competition in the form of other independent units. Chain competition will be much later. REFERENCE: Secrets of small business success Newell M (1985) Retail plan of a fast food Business by Abdul Jamil Sharify www.fundinguniverse.com/sample-business-plans www.score.org www.sandwichpanel.com www.virtualrestaraunt.com http://www.interstellar-solutions.co.uk/business-planning.php
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