Restaurant

BUSINESS PLAN AMERICAN DINER

5409 Lapel St. Timbuktu, UT 48224 January 4, 1993

Adopting a 1950s theme, the American Diner intends to serve traditional foods, such as fruit pies and cobblers, freshly baked breads, pot pies, and other "homecooking" with an eye toward health. The two proprietors, both experienced restauranteurs, intend to draw on their extensive food service backgrounds as they launch their new business. The following plan outlines the strategy the Diner will develop to cater to the growing Timbuktu community in the face of strong competition .

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EXECUTIVE SUMMARY INTRODUCTION MENU MARKET DESCRIPTION COMPETITION MARKETING STRATEGIES MANAGEMENT TEAM FINANCIAL PROJECTIONS

In 1984. Type of Business Diner. was involved in all aspects of its business for six years until its sale in 1990. downtown Timbuktu. INTRODUCTION American Diner is designed to create a community atmosphere as a good. The location at 5409 Lapel St. structured as a limited liability business.000 needed to capitalize the American Diner project. neighborhood cafe. Company Concept American Diner will create a community atmosphere as a good.• APPENDICES EXECUTIVE SUMMARY Founders John Doe has worked in food service for over 17 years. Financial Goals To acquire $107. puts the diner in the heart of lively. Jane Smith was instrumental in the planning and start-up of The Watering Hole one of Timbuktu's most popular bar/restaurants. the . She has worked in food service/food retailing since 1980 and has extensive managerial experience. he established the popular and successful downtown restaurant. healthful fare with all selections made on the premises from "scratch. old fashioned. A priority of American Diner will be serving fresh. Paris Cafe. and as owner. with an estimated payback in five years. old-fashioned neighborhood cafe in thriving downtown Timbuktu." To keep food costs down. friendly.

a strong need exists for quick. Future plans include expanding the bakery line. grey booths with formica/chrome tables. shopping and entertainment center for this region. pies and cobblers. possible downtown and university delivery. the Timbuktu population is expected to grow 5-7% in the next five years. freshly baked breads. Most of the menu will revolve around baked goods. College students. Paris Care. Foods will come from local and regional suppliers whenever possible. . vibrant. and well-organized carry-out food for the downtown labor force as well as for downtown shoppers. are well-known for their appetite for quickly prepared good food. many consumers are seeking fast. A deli counter.. American Diner will be a simple 50seat cafe with neon signage. a refurbished pressed-tin ceiling with ceiling fans. increasing over-the-counter sales (e. yet creative with many interchangeable ingredients. pot pies with fresh. Based on projections by the Institute for Public Policy and Business Research at the University of Timbuktu. flaky crusts. downtown Timbuktu will continue to provide a unique. during that time.g. and a continuing effort to become more proficient in carryout operations. The deli will offer a choice of fresh mini-loaves for sandwiches. checkered tile floors.menu will be simple. In increasing numbers of single households and dual earner households with limited time for food preparation. diverse (vegetarian and non-vegetarian). and a fresh juice bar will also be showcased. As learned from her experience with the downtown Timbuktu restaurant. packaged loaves of bread and whole pies). fine coffees. another large group of consumers for American Diner. This will also keep the dining costs reasonable for consumers—self-service with no tipping expenses. Setting the mood of a '50s diner with decor. Emphasis will be placed on the bakery which will feature old-world breads baked daily. with a preference for organically grown products. e. and a lunch counter (with the look of an old soda fountain) to match the tables. Only counter service will be offered to keep labor costs low. nutritious meals.g.

and spreads (chicken salad. baked maple custard and seasonal fruit pies. The ingredients of American Diner's bierock will vary to satisfy vegetarians as well as meat-eaters. hot or iced sun tea. The deli will also offer creative versions of traditional side salads: potato salad. A deli with a variety of meats. Mexican burritos. Indian somosas. Also featured will be freshly baked scones and muffins. cheesecake. and sour cream wrapped in a flavorful dough.g. today's vegetable special will be in tomorrow's pot pie. The limited menu will be based on "comfort" foods at reasonable prices (Mom's cooking made better). Greek spanokopita. To round out meals of pot pie or bierocks and side salads.. priority is being placed upon a menu with interchangeable ingredients. "Pocket" breads are known in virtually every culture. For example. Imagine: A pot pie made with fresh. bean salads and tossed salad. To top it all off. onions. cole slaw.MENU To keep food and labor costs low. Breakfast will emphasize baked goods with a European style breakfast that includes a bread basket with fruit and cheese. will be soup-of-the-day and desserts of freshly baked cobbler-of-the-day. Chinese eggrolls. freshly . cheeses. beverages offered will include freshly brewed organically grown coffees (with choices of espresso or cappuccino). flaky crust with a variety of meat or vegetable fillings. e. vegetarian) with a choice of herb or plain French mini-loaves. American Diner will emulate the German version of the pocket bread—the bierock—which traditionally includes ground beef.

whole grain waffles (ginger pumpkin) will be offered. an historic hotel. Sporting events. sit-down restaurants is evident by the amount of time .S. plays. The presence of two institutions of higher learning in Timbuktu provide the area with a progressive-minded clientele. Buck County and Timbuktu are serving as hosts for an increasing number of conferences and conventions. Studies have shown that members of this age group are heavy consumers of restaurant fare. particularly football and basketball. In addition. and several successful restaurants. bring visitors from throughout the region.). This clustering effect of features creates a large customer base from which to draw.8%. The recent addition of Timbuktu's Mall and the unique downtown shopping area draw people heavily from neighboring cities as well as from out of state. compared with the U.squeezed citrus and vegetable juices. The city lies almost mid-way between Capital City and Middleton and Buck County is ranked sixteenth in the U. as well as limeades. historic Timbuktu Hall (concerts. Almost a third of the population in Buck County is aged 18 to 24.S. On Sundays. etc. in addition to the regular menu. for young adults. The menu offers a variety of healthful choices-note that there are no fried foods.000 (80% of the total population for Buck County). average of 10. MARKET DESCRIPTION Timbuktu is the fifth largest city in Utah with a population of 65. Downtown Timbuktu is the focus for entertainment with movie theatres. a brew pub. An advantage of not having fried foods is the savings in operating and service costs that exist with the use of deep fryers." The demand for high quality. the majority are "fast food. lemonades and smoothies (blended fruit drinks). COMPETITION Although many restaurants exist in Timbuktu.

MANAGEMENT TEAM . Believing that radio and print ads are not cost effective. "comfort" food menu. To keep labor costs down. The food service concept is a cross between a deli and a coffeehouse. With this combination of atmosphere. The simple menu with interchangeable ingredients is designed to keep food costs low. American Diner's strengths relative to the competition lie in the controlled labor and food costs. American Diner will spend ad dollars in other creative ways: • • • • Selling t-shirts and coffee mugs with American Diner logo Postcards of the storefront in an old-fashioned airbrushed style illustration Carry-out bags featuring the printed logo with menu stuff-in Menus will be distributed to downtown businesses and the university campus Sponsoring various community projects and events to help with name recognition • Ultimately. strictly counter service will be utilized. As stated earlier. the cafe will be smoke-free. service and carry-out. With the growing concern over health and smoking. MARKETING STRATEGIES Advertising costs will be 1-2% of sales. efficient carry-out operation. the decor conjures up the feeling of an old-fashioned comfortable diner. table service will not be offered. plans include hiring an experienced. the best advertising for the American Diner will be the word-ofmouth from satisfied customers. versatile staff that is able to both work in the kitchen and out front. Upon entering the American Diner. the American Diner will be unique. This feature will eliminate a number of employees that increase personnel costs in other restaurants. emphasizing an organized. with a fullservice bakery.spent waiting to be seated at most downtown cafes. Another strength for the American Diner is location—the heart of downtown Timbuktu.

The business will be a 50/50 partnership in terms of management. She was instrumental in the planning and start up of Paris Cafe. and worked closely with the kitchen manager to oversee equipment/food purchases and menu worked as a host/waitress/bartender. Major medical insurance will be provided for John and Jane. John Doe's track record in the restaurant business has illustrated only success. Jane Smith also comes into this project with a strong food service background. full-time staff will be eligible for insurance. planned restaurant public relations. dish washers and bus people. At the time of its sale in 1989. quick breads. Jane Smith's other restaurant experience includes work as baker. John and Jane will be involved in every aspect of the business.040. he fulfilled a life-long dream when he opened his own restaurant in downtown Timbuktu. John Doe will oversee the front end and Jane Smith will oversee the bakery/kitchen. A co-manager of Natural Foods from 1981-1985. Since he was a boy in western Utah John Doe has worked in food service in a variety of capacities. including the design. service and management. sales for . doubling its size and adding a bar. the Paris Cafe. Jane Smith is again a co-manager at this store. food preparation. and more. The restaurant expanded in 1987. menu. she also hired and trained the wait. and hosting at the Paris Cafe as well as baking biscuits. oversaw financial and personnel matters. Paris Cafe was grossing $1. The Paris Cafe is still a wildly popular and thriving business at 1 Block St. During her time as a buyer. She is a full-time staff member spending half her time as a floor manager and the other half as a supplements/personal care products buyers. All policies will be decided between these two. After one year of employment. host and bar staff.000 per year and employed a staff of 67. danish and desserts as needed daily. In charge of creating a scheduling system for the staff. Starting out peeling potatoes and graduating to dishwashing at eight years old. The team will hire an experienced manager to oversee the operation when they are not there. waitperson. which is now one of Timbuktu's most popular bar/restaurants. John Doe was involved in all aspects of the operation from 1984 up to 1990: managed day-to-day operations.

FINANCIAL PROJECTIONS The following projections are based on past experience with downtown business in Timbuktu.75 (available upon request). An accountant will be hired to take care of quarterly payroll and business taxes. See appendix for a complete breakdown of equipment and start-up costs.000/year in sales is based on approximately 315 people per day (360 days/year) with average guest check of $4. The equipment and leasehold improvement figures come from estimates given to the management team by suppliers and contractors.75 (available upon request). • Middle Projection of $540. The cash register system will track sales by category. which is admittedly high— the goal is to reduce this area to around 33%. • Most Conservative Projection of $420. Middle Projection : Year 1 . Plans include the purchase of a computer with a software package to do payroll and weekly inventory. Labor Costs are based on prevailing wages for necessary employees.her departments have risen significantly. • Inventory Purchases are based on 40% of sales.75 (available upon request). • • Growth in sales is figured at a 17% increase per year. To a large degree the success of any food service venture depends on ordering and inventory skills.000/year in sales is based on approximately 420 customers per day (360 days/year) with an average guest check of $4. Current government tax rates and insurance quotes are the basis for the payroll taxes and benefit package. She has a good understanding of food distribution.000/year in sales is based on approximately 245 customers per day (360 days/year) with an average guest check of $4. • Most Optimistic Projection of $720. hours and duties based on similar operations. which will be valuable in her role at the American Diner.

000 $320.226 $0 $13.774 $13.000 $220.Income Statement and Balance Sheet INCOME STATEMENT (Feb.93-Jan.000 $306.226 .94) Net Sales Less: Cost of Sales Gross Profit Less: Operating Expenses Operating Profit Less: Other Expenses (net) Profit Before Taxes $540.

1994) Current Assets: Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Noncurrent Assets: Equipment Less Depreciation $28.BALANCE SHEET (As of Jan.000 Intangible Assets (net) Other Noncurrent Assets Total Noncurrent Assets Total Assets LIABILITES AND EQUITY Current Liabilities: Accounts Payable Currently Maturing LTD Other Current Liabilities Total Current Liabilities Noncurrent Liabilities: Long Term Debt Other Noncurrent Liabilities Total Noncurrent Liabilities Equity: Owners Equity Retained Earnings Total Equity Total Liabilities and Equity $78.226 $120.066 $0 $78.066 $152.620 $0 $55.540 $0 $18.226 $55.000 $152.540 $0 $0 $28.000 $0 $124.226 APPENDIX A: RESUMES .226 $0 $4.620 $0 $18.31.

1978. and marketing the departments. negotiated with suppliers about equipment. Graduate. Morgan. telemarketer for one of the publications. coordinated advertising material for two publications and worked as a. 1989 to Present: Shift Manager/Supplement and Personal Care Buyer. 1986: Advertising Coordinator.A. 00000 (505)555-1212 EDUCATION Graduate. Waiter. Joe's Deli. October. July. University of Michigan. customer service. Northwest High School. receiving shipments. Duties.John Doe 123 Maple St. Bachelor of General Studies in Liberal Arts. 1988 to April 1989: Manager. Advertising U.S. WORK EXPERIENCE November. inventory control. part of show management team for the Natural Foods Expo (the Industry's largest trade show). May. 1974. hired and trained the staff. 1989. UT. Timbuktu. 1991: Host. Utah. Duties: supervised the start-up of the restaurant/bar operation. 1985 to April. helped develop menu. worked as host and bartender. . Paris Cafe. to May. Save-On Drugs: staff supervision. pricing and stocking shelves.

Duties: staff supervision. 1985: Board Member.July. managed day-to-day operations. day-to-day store operation and coordination of promotional events. UT. 00000 (505)555-1213 EDUCATION Graduate. 1985: Co-Manager. WORK EXPERIENCE June 5. Jane Smith 555 N. 1969-1972. The Watering Hold. 1984 to May. November. August. References available upon request. University of Michigan. a distributor of natural foods. 1968. Morgan Elementary. 1981 to June. Studies in Liberal Arts. Utah. . Main St. Timbuktu. Salt Lake City. Duties: worked in kitchen as well as in food serving line. High School. 1970 to May. Board of Directors of Cooperative Warehouse. Duties: founded business. involved in all aspects of business. Utah. 1992: Head Cook. public relations and more. 1984 to June. Oceana Restaurant. 1971: Kitchen Worker. Duties: manager of kitchen and head cook for sixty grade school children as well as ten staff members. 1990: Owner. Timbuktu. personnel. inventory control. Timbuktu. including financial. Loon River Saloon. Utah. WORK RELATED ACTIVITIES September. 1992 to June 30. Manager.

00 $3.00 .000.300.00 Start-Up Wages (based on eight weeks start up time) $8. waitress. APPENDIX B: MASTER COST LIST Contract Work Blodgett Stack Oven Opening Food Inventory Booths.00 $4.500. Meats-N-Things: dishwasher. 1968: Food Service Worker. References available upon request.500.June.500. 1963 to May.100.00 $4. cashier. Tables Neon Signs Deli Case $43. hostess.00 $2.00 $1.000.

00 .00 $100. Supplies/Pans.00 $500.00 $750.000.00 $500.000.150.00 $200. etc.00 $2.500.00 $600.00 $200.850.00 $230. (100 settings) Berkel Chopper Bzerba Slicer Business Structure Fee Three Compartment Sink Coffee Machine w/pots—three burner Stereo System Steamtable (two compartment) Work Tables (three) Microwave Hobart Coffee Grinder Blenders (two) Ingredient Bins w/wheels Toaster Time Clock Business Insurance Window Shades (storefront) Chairs (for tables) Cutting Boards Table Accessories (salt and pepper shakers.Refrigerator Reach-In Computer System & Cash Register Hobart Mixer (60 qt.00 $450.00 $800.00 $100.) Misc.00 $2. Etc.000.00 $385.00 $100.00 $2.00 $550.) $1.) Hobart Mixer (20 qt.00 $600.00 $1.00 $300.00 $1.00 $300.00 $3. Utensils Six Burner Range Oven Freezer Reach-In Sandwich Unit Proofer Glassware.00 $1.400.00 $450.00 $1. Silverware Plates.00 $200.00 $500.360.00 $150.650.

00 $600.00 $20.00 $5.00 $1.670.00 $50.300.00 $101.000.000.00 $1.00 $50.00 .330.00 $5.775.Menus Bus Tubs Pick-Up Window Heat Lamp Ticket Wheel Rent T-Shirts/Mugs Advertising Package Utilities Payroll Taxes Total Cash reserve of Total $100.00 $1.000.00 $107.

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