Group Final Project

Group 2 Final Project [Web Address]
Business Plan of Opening a Hot Pot

Restaurant in Kaohsiung,
Blues’ Hotpot.
Group member: Kai Tsai, Guillaume Valery, Gregoire Lesene, Valentin

Gomez, Aden Chen, Shirley Liu
Business contact: Kai Tsai,

consultant and director, Axis Musical Corporation
Any concerns or questions, please send email to following address:
kai.farwind@gmail.com
Mobile: +886981775206
[Street Address] [City], [State] [Postal Code]

Phone: [Your Phone] Fax: [Your Fax] E-Mail: kai.farwind@gmail.com
[Insert Date] organization Lorem Ipsum 2
Table of Content
Chapter I Preface
1. Background of starting a hot pot restaurant in Kaohsiung
2. Business Ideas
Chapter II Service Package Illustration
1. Service type and restaurant setting setup
2. Analysis of Wowprime business model
Chapter III Business Model & HRM
1. Procurement aspect/Setting up a company
2. Human resource management expense
3. Business model/Pricing policies
4. Marketing Section and promotion channels
Chapter IV Marketing Research in Kaohsiung, Competition analysis
and Location Analysis
1. Characteristics of restaurant market in Kaohsiung
2. Target customer demographic
3. Current Competitors and brief introduction
4. Pedestrians flow and SWOT analysis of location choice
Chapter V Financial Section
1. Estimated sales revenue
2. Budget calculation for the first year and after
3. Financial report forecasting
Chapter VI Benefits Evaluation of Investment
1. Conclusion of business plan
2. Benefit evaluation report
3. Potential threats and risks
Chapter VIII Appendix of references & Attachments
Chapter I Preface
1. Background of starting a hot pot restaurant in Kaohsiung
2. Business Ideas
-Background of Starting a Hot Pot Restaurant in Kaohsiung
Our designed question asks us to make a market survey on opening
a hotpot restaurant in the Kaohsiung Arena area, find out the most
profitable strategy and set the best selling price.
Hotpot restaurants have long been one of the most popular types of
restaurant in Taiwan. Its popularity and varieties of choices show by
the niche price and the shop density appeared in our survey. Hotpot
restaurants are commonly seen in Taiwan, either in Taiwanese style,
Sichuan style or in Japanese style; and the price per person can
range from 120 NTD to 700 NTD. Two of the most profitable
corporations in Taiwan, respectively named Wowprime (王品集團)
and Tripodking (鼎王集團), have hotpot restaurants as profitable
subsidiary companies for their price discrimination strategies to

different customer preferences and purchasing powers. As for the
location analysis of hotpot restaurant services, the area of
Kaohsiung Arena region is quite niche for catering industries, as the
designed question suggests; the profit will be huge once a
restaurant gains popularity.
-Business Ideas
After group discussions, we decided to design a restaurant project
on our own. How we set up the hotpot restaurant will be determined
by the analysis based on the existing popular hotpot restaurants. By

taking the profitable corporations and their operating strategies as
examining models, we acquire information in an efficient manner to
the market, avoiding possible risks, and making innovative
alterations.
The model we decided to adopt is 12 Hotpot, one of the
subsidiaries of Wowprime catering groups. 12 Hotpot is relatively
small in scale; the varieties of hotpot soup and extra services are
also kept as simple as possible to lower the cost and to attract
customers of less purchasing power in the neighborhood.
Our name of the restaurant will be “Blues’ Hotpot.” There’s a
somehow sufficient place in front of the shop and we’d invite
musicians (NSYSU’s students) to perform there to attract customers.
Our group aims to open a hotpot restaurant following the similar
pattern though a somehow differentiated services to attract
consumers.
Chapter II Service Package Illustration

1. Service type and restaurant setting setup research
2. Analysis of Wowprime business model
-Service Type and Restaurant Setting Setup
A pre-analysis on competitors and successful business models is
required before we actually take them for reference before start our
business. Therefore, the following is a study of 12 Hotpot of
Wowprime.
A. Storefront description and basic information
Item Description
Floor space Smaller than most hotpot restaurants;
Approximately 100-150 square feet.
Opening 11:30-23:00, no reservations
hours
Price 198 NTD per set
Seat numbers (Qingnian branch)7 tables for four,
and 24 seats by the bar (52 seats in total)
Menu Two simple choices of broth
—with/without fried garlic and cabbage in the kelp
broth
B. Interview with the manager; analysis and comparison

According to the manager, 12 Hotpot’s target customers are people in
the neighborhood who want to enjoy a simple hotpot. The aim of the
simple broth choices is to lower the cost, so that they can upgrade the
quality of vegetables, meats and other hotpot ingredients.
The seats by the bar and long opening hours are designed for
students, young office staffs or couples, who are the most common
customer groups with adequate purchasing power between 200 NTD to
300 NTD. The 198 NTD price is carefully designed to maximize the
profit.
Since the space and seats are limited, they accept no reservations.
Prices are fixed; every hotpot set has the same price of 198 NTD. Extra
vegetables, meat, hotpot ingredients and drinks costs ranges from 10
to 50 NTD.
C. Synthetic Analysis:
We studied Wowprime’s price discrimination policies according to the
differentiated service they apply and also the purchasing power of
consumers. Wowprime divided their catering services into three groups
of brands,
1) First division, Wang steak and 夏幕尼, target audience is those who
seek premium dining experience and have higher price elasticity.
2) Second division, tasty steak, 聚, 陶板屋, 原燒, 舒果, target audience is
those do not wish to spend too much on dining but seek for quality
food.
3) Third division, 12 hotpot and Famonn Coffee, target audience is
students, employees, and customers from nearby community who seek
simple, quality hotpot.
Different customers satisfied by their purchasing power for

differentiated product or services regardless of the fact that they all
belong to Wowprime groups. We chose 12 hotpot as our starting
business model is because it’s rather an easy one to start and its wide
known success.
Chapter III Business Model & HRM

1. Procurement aspect/Setting up a company
2. Human resource management expense
3. Business model/Pricing policies
4. Marketing Section and promotion channels
-Setting up a company
According to the laws and regulations issued by the R.O.C. Ministry of
Justice, establishing a company has to follow the following steps:
1. Come up with a shop name (Blues’ Hotpot), and register under the
Government of Kaohsiung.
2. Open an account under the name of Blues’ Hotpot® and deposit the
capital (at least 1,000,000 NTD in the case of establishing an
incorporated company) in the account. (There are local agency offices
could specialize these financial issues)
3. Authorize an accountant to write a balance sheet of the company.
Cost of the accountant: around 1,600 NTD
4. Fill an application for Company Registration with the Ministry of
Economic Affairs. Cost of the register fee and license fee: 2,000 NTD
Total fee of registration: Around 3,600 to 5,000 NTD
Fire-fighting Equipment
According to the Fire Services Act of National Fire Agency of Ministry of

the Interior, R.O.C., the administrator shall contract a fire protection
equipment engineer or technician to conduct periodical service of the
equipment, and the service results shall be reported to the local fire
department. (Fire Service Act of R.O.C., Article 9)
-Articles of Expenditure:
Architectural cartography fee: 10,000 NTD
Design and joint check-up: 300,00 NTD
Fire protection installation and fee of site investigation: 30,000 NTD
Fire protection equipment cost (for factory with superficial measure
under 150 square meters): under 10,000 NTD
-> around 80,000 NTD
Fee of periodical inspection and service of fire safety equipment: 2,500
NTD
->Total cost: 82,500 NTD
Cost of fire protection equipment installation: 80,000 NTD
Fee of periodical inspection and service of fire safety equipment: 2,500
NTD
Total fire protection equipment cost: 82,500 NTD
Facilities Purchasing
According to experienced consultants, the first year facility costs are
described in following chart:
Item Price (NTD)
Kitchen Equipment 15,000
Tables & Chairs 50,000
Transportation Equipment 400,000
Rent 1,200,000
Computer system 13,800
http://www.familiar.com.hk/price.html
Human Resource Management:

Manager/shareholder*1
Cook*1
Cook’s assistant *2
Part-time employee*3
Pricing Policies:
Following the operation similar to 12 Hotpot’s and considering the
costs (144590 NTD per month), we set the starting price at around 198
NTD to 250 NTD. Detailed Pricing policies concerning marketing will be
described below.
Marketing Section and Promotion Channels:
We have three major ways of brand promoting.
1. Internet:
-Facebook fan club: Anyone who checks in at our restaurant gets an
extra plate of slice meat/price discount/voucher.
-Invite well-known bloggers to come and write about the cuisines
and dining experience.
2. Personal networks:
-Distribute flyers at nearby high schools and colleges.
- Sign an agreement with two or more schools regarding a discount.
Any of the students of the contracted schools comes to the
restaurant can have a 10% off (identified by student ID); and a group
visit (four people and/or more) gets a 15% off. Facebook check-in
works simultaneously.
3. Promotion on weekdays and weekends:
-Free drinks (black tea) from Monday to Friday. Refill allowed.
The discount policies will be altered after six months of operation.
After a year, we’ll examine the operating profit to see if adjustments

are needed.
4. Art activities and programs:
-The manager/staff plays guitar in the performing corner in the
restaurant every Thursday evening.
-A simple performing area in the restaurant is on-lend to school
clubs and other youth groups on weekend nights.
Chapter IV Marketing Research in Kaohsiung, Competition analysis

and Location Analysis
1. Characteristics of restaurant market in Kaohsiung
2. Pedestrians flow and SWOT analysis of location choice
-Population of Zuoying District
Zuoying District is the third biggest administrative division in
Kaohsiung where has a population of 17,784 people.
The population in the northern Kaohsiung has increased in recent
years, and the habitants tend to gather toward Zuoying District due to
the rising of business areas, marketplaces and luxurious residential
communities. The vicinity of MRT Kaohsiung Arena Station is especially
populated and is also the center for restaurants.
-Why locate near Kaohsiung Arena Station?
1. High visitors flow rate. Large number of tourists gathers on
weekends.
2. With the density of restaurants and diners in the area, the
advertising of our company will have more exposure and thus more
efficient.
3. Large number of residents and students in the area.
Ex. Mansions around the Museum of Fine Art and along He-ti Road,
Wenzao Ursuline University of Languages, and 2 high schools near
Kaohsiung Arena Station
SWOT analysis
Strengths Weaknesses
1. original decoration 1. few publicity in early stages
2. affordable price 2. low flow rate in early stages
3. distinctive additional services 3. high marketing cost in early
and programs stages
4. foods with quality 4. operating profit approaches to
5. high flow rate in downtown zero in early stages
Kaohsiung 5. inexperienced administrator
6. employee orientation training
needed
Opportunities Threats
1. hipster styled decoration will 1. keen competition with lots of
attract youths other nearby restaurants
2. cooperation with school clubs 2. comparatively few choices of
(ex. club performances in the meals
store) can gain publicity and 3. sizable fund needed
attract more young customers
3. holding art and cultural
activities
4. small and medium enterprise
administrations receive
government’s subsidy
4. Pedestrians flow of the our candidate locations,

Our team members did pedestrians flow research on nearby hotpot
restaurants to analyze people passing by and the actual people
entering the restaurants by categorized consumers into two groups—
weekdays consumers and weekends consumers. We found 2 potential

rental places are currently available on the Internet and field researches
by actual visiting the nearby area.
1) First location, Yu Cheng road, Restaurant monitored: 12 Hotpot.

-Administrative area: Belong to Zuoying District(Top 3 populated area),
near the rim of Sanmin District(Top 2 populated area)
-Weekdays: (calculating time from 5:30 to 7:30)
People passing by: 430 people in 2 hours.
People entering: 38 people in 2 hours.
-Weekend:
People passing by: 553 people in 2 hours.
People entering: 111 people in 2 hours.
Estimated weekdays’ consumers per operation day: 38*5/2=95
Estimated weekend’s consumers per operation day: 111*5/2=277
2) Second location, Nan Ping road, restaurant monitored: Old Sichuan

Spicy Hotpot restaurant.
Administrative area: In the middle of Zuoying District(Top 3 populated
area)
-Weekdays:
People passing by: 338 people in 2.5 hours.
People entering: 74 people in 2.5 hours.
-Weekends:
People passing by: 434 people in 2.5 hours.
People entering: 87 people in 2.5 hours.
Estimated weekdays’ consumers per operation day: 74*5/2.5=149
Estimated weekend’s consumers per operation day: 87*5/2.5=174
After evaluated the rental and the locations, we decided the first
location to be our desired candidate restaurant site.
Chapter V Financial Section

1. Estimated sales revenue
2. Budget calculation for the first year and after
3. Financial report forecasting
-Estimated Monthly Sales Revenue:
By separating the customers into two groups, weekdays and

weekend, we forecast the number of consumers visiting restaurant will
only be half the number according to the calculation of pedestrian flow
in the beginning of operation. (Definition of beginning operation: the
first year, in second year we assume we would have similar customer
flow to 12 hotpot as our comparable rival)
Estimated weekdays’ consumers per operation day: 95/2=47
Estimated weekend’s consumers per operation day: 277/2=138
Average 66 customers per day, average consumed 200 NTD,
therefore daily sales revenue equal to 200*47=9,400 NTD.
Average 388 customers per day, average consumed 250 NTD,

therefore daily sales revenue equal to 250*138=34,500 NTD.
Monthly revenue thus,
(Weekdays: 9,400*20=188,000 + Weekends: 34,500*10=345,000),

Assume Average proportion between weekdays to holidays is 2 to 1.
Totally estimation of monthly sales revenue would be 533,000 NTD.
-Estimated Operation Cost (fixed cost & variable cost):
According to existing statistical analysis of proportion of food selling

price to cost, cuisine in restaurant 45% to 50%, Beverage 25% to 30%,
and we assume the average cost proportion of our hotpot restaurant is
38%. (Average cost proportion of second year operation should
reasonably decrease)
Average monthly cost buying ingredients is 202,540 NTD.

Labor force fee: Cook, monthly salary 38000 NTD, 2 Assistants each
cost 25000 NTD, 3 part time employees hourly paid 100NTD per
person, the operation hour is 7 hours, thus monthly salary 16800 NTD,
subtotal salary of part time employees is 50,400NTD.
total labor force cost is 138,400 NTD.
Monthly Advertisement budget & management cost: 30,000 NTD.
(Including manager’s salary)
Rental cost of the location: 100,000 NTD.
Monthly Water and Electricity: 20,000 NTD
-Forecasting financial report:

Income statement of the beginning operation, (the first year)
Items Subtotal Total
Gross Sales $6,396,000.00 $6,396,000.00
Sales Cost
Food Ingredients $2,430,480.00 $2,430,480.00
Gross Sales Profit $3,965,520.00
Operation Cost
Pres Operation cost $161,500.00 $161,500.00
Water and Electricity $240,000.00 $240,000.00
Human resource fee $1,660,800.00 $1,660,800.00
Management+ rental $1,560,000.00 $1,560,000.00

Total Operation Cost $3,622,300.00
Profit before taxation $343,220.00 $343,220.00
Income Tax $75,805.00 $75,805.00
Net profit after tax $267,415.00 $267,415.00
-Income statement of the second year operation,

Gross Sales $12,792,000.00 $12,792,000.00
Sales Cost
Food Ingredients $4,860,960.00 $4,860,960.00
Gross Profit $7,931,040.00
Operation Cost
Water and Electricity $240,000.00 $240,000.00
Human resource fee $1,660,800.00 $1,660,800.00
Management $1,560,000.00 $1,560,000.00
Total Operation Cost $3,460,800.00
Profit before taxation $4,470,240.00
Income Tax $1,107,560.00 $1,107,560.00
Net profit after tax $3,362,680.00
Taxation formula: T=P*0.25-10000.
-Balanced Sheet of the beginning operation, the first year.

Cash 500,000 500,000
Inventories 30,000 530,000
Kitchen Equipments 15,000 545,000
Tables & Chairs 50,000 595,000
Transportation
Equipment 400,000 400,000
Accumulated
Depreciation 995,000
Rent 12,00,000 2,195,000

Total Assets 2,195,000
Total Liabilities 0
Total Owner's equity 2,195,000 2,195,000
-Balanced Sheet of second year,

Cash 800,000 800,000
Inventories 50,000 850,000
Kitchen Equipments 20,000 870,000
Tables & Chairs 60,000 930,000
Transportation
Equipment 300,000 400,000
Accumulated
Depreciation 13,30,000
Rent 1,200,000 2,530,000
Total Assets 2,530,000
Total Liabilities 0 0
Total Owner's equity 2,530,000 2,530,000
Chapter VI Benefits Evaluation of Investment

1. Conclusion of business plan
2. Benefit evaluation report
3. Potential threats and risks
Benefit evaluation of operation analysis is based upon profit rate
after taxation. According to our forecasting analysis,
Net profit after Profit rate

taxation Sales Profit after taxation
Beginning Operation $267,415.00 $3,965,520.00 6.74%
Second year Operation $3,362,680.00 $7,931,040.00 42.40%
We have to admit that the profit rates according to the forecasting

analysis might be optimistic regardless the beginning efforts to attract
nearby consumers and the risks of additional expenses on human
resource management, marketing spending, loan interests and etc. The
reasonable starting capital for our Blues’ Hotpot would be at least
5,000,000 NTD to ensure business development smoothing and
steady.
However, if we could overcome the difficulties of loans and to invite
someone experienced in hotpot business (better someone who worked
in 12 hotpot restaurant or familiar with their business model and
ingredient supply chain), we think it would be a good idea to open this
hotpot restaurant with theme of blues/modern music design to attract
consumers of nearby community and younger generations.
As for the designed question, we believe our report not only
showing a sufficient marketing analysis on hotpot business and also a
very detailed way to enter current market with minimum risks & efforts
to generate maximum profit.
Chapter VIII Appendix of references & Attachments
Legal issues reference:

法務部 http://www.moj.gov.tw/mp095.html
內政部消防署
http://www.nfa.gov.tw/main/Unit.aspx?ID=&MenuID=696&ListID=3229
http://taoyuanorg.pixnet.net/blog/category/103800
申報手續費資料來源

Group Final Project

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Group Final Project

Uploaded by

Copyright:

Available Formats

Group 2 Final Project [Web Address]

Business Plan of Opening a Hot Pot

Group member: Kai Tsai, Guillaume Valery, Gregoire Lesene, Valentin

Business contact: Kai Tsai,

[Street Address] [City], [State] [Postal Code]

Chapter VIII Appendix of references & Attachments

and Tripodking (鼎王集團), have hotpot restaurants as profitable

subsidiary companies for their price discrimination strategies to

by the analysis based on the existing popular hotpot restaurants. By

Chapter II Service Package Illustration

B. Interview with the manager; analysis and comparison

seek premium dining experience and have higher price elasticity.

2) Second division, tasty steak, 聚, 陶板屋, 原燒, 舒果, target audience is

Different customers satisfied by their purchasing power for

Chapter III Business Model & HRM

According to the Fire Services Act of National Fire Agency of Ministry of

Human Resource Management:

After a year, we’ll examine the operating profit to see if adjustments

Chapter IV Marketing Research in Kaohsiung, Competition analysis

4. Pedestrians flow of the our candidate locations,

weekdays consumers and weekends consumers. We found 2 potential

1) First location, Yu Cheng road, Restaurant monitored: 12 Hotpot.

2) Second location, Nan Ping road, restaurant monitored: Old Sichuan

Estimated weekend’s consumers per operation day: 87*5/2.5=174

Chapter V Financial Section

-Estimated Monthly Sales Revenue:

By separating the customers into two groups, weekdays and

Average 388 customers per day, average consumed 250 NTD,

Monthly revenue thus,

(Weekdays: 9,400*20=188,000 + Weekends: 34,500*10=345,000),

-Estimated Operation Cost (fixed cost & variable cost):

According to existing statistical analysis of proportion of food selling

Average monthly cost buying ingredients is 202,540 NTD.

-Forecasting financial report:

Management+ rental $1,560,000.00 $1,560,000.00

-Income statement of the second year operation,

Items Subtotal Total

Taxation formula: T=P*0.25-10000.

-Balanced Sheet of the beginning operation, the first year.

Rent 12,00,000 2,195,000

-Balanced Sheet of second year,

Items Subtotal Total

Chapter VI Benefits Evaluation of Investment

Net profit after Profit rate

We have to admit that the profit rates according to the forecasting

Chapter VIII Appendix of references & Attachments

Legal issues reference:

You might also like

(Weekdays: 9,40020=188,000 + Weekends: 34,50010=345,000),