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PREFACE:
Feasibility Study – Barbecue Restaurant (Rs.2.20 Million)
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This is the final project report of the course “Introduction to Business Finance” facilitated by Mr.
IqbalNayani. This is the feasibility report of starting a new business of a Barbeque Restaurant with
finance from SMEDA. The purpose of this report is to show the estimated profitability and financial
position of the company. We have also described about Project and Products, the Critical factors of the
business and the Process flow of the business. We have shown some tables related to Raw material
cost, Human resources, Space requirement, Furniture and Fixtures used, Revenue Generation, Working
Capital Requirement, Project cost and Utility charges. Also showing the profitability and financial
position are the Income Statement and Balance Sheet respectively. We have also done the analysis of
financial statements which include ratios and its graphical representation as well.
AKNOWLEGEMENT:
First of all, we thank Almighty Allah who praise us with the ability to think, work and deliver what we are
assigned to do. Secondly, we must be grateful to our course facilitator who helps us in this project. We
also acknowledge him that throughout our studies for helping and guiding us. We also would like to
thank him for showing us some example that related to the topic of our project. It is a great honor to
work with him.
TABLE OF CONTENTS
1. DISCLAIMER……..........................................................................................................................5
2. INTRODUCTION TO SMEDA.........................................................................................................6
3. INTRODUCTION TO SCHEME.......................................................................................................6
4. EXECUTIVE SUMMARY…………………………………............................................................................7
5. BRIEF DESCIRPTION OF PROJECT AND PRODUCT….......................................................................7
6. CRITICAL FACTORS…………………………………..................................................................................8
7. PROCESS FLOW..........................................................................................................................8
8. INSTALLED AND OPERATIONAL CAPACITY...................................................................................8
9. RESTAURANT COST SUMMARY…………........................................................................................9
9.1 PROJECT FINANCING................................................................................................................9
9.2 PROJECT COST ..........................................................................................................................10
9.3 SPACE REQUIREMENT................................................................................................................10
9.4 MACHINERY AND EQUIPMENT ....................................................................................................10
9.5 FURNITURE AND FIXTURES ........................................................................................................11
9.6 RAW MATERIAL REQUIREMENTS ...............................................................................................11
9.7 HUMAN RESOURCE REQUIREMENT ...........................................................................................12
9.8 REVENUE GENERATION .............................................................................................................12
9.9 UTILITIES REQUIREMENT............................................................................................................13
9.10 WORKING CAPITAL
REQUIREMENT..........................................................................................14
10. ANNEXURE………………………………………………………………………………………………………………………....15
10.1 INCOME STATEMENT ..................................................................................................................15
10.2 BALANCE SHEET ........................................................................................................................16
10.3 RATIO ANALYSIS……………………………………………………………………………………………….…………………………
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DISCLAIMER:
This information memorandum is to introduce the subject matter and provide a general idea and
information on the subject. Although, the material included in this document is based on data or
information gathered from various reliable sources; however, it is based upon certain assumptions
which may differ from case to case. The information has been provided on ‘as is where is’ basis without
any warranties or assertions as to the correctness or soundness thereof. Although, due care and
diligence has been taken to compile this document, the contained information may vary due to any
change in any of the concerned factors, and the actual results may differ substantially from the
presented information. SMEDA, its employees or agents do not assume any liability for any financial or
other loss resulting from this memorandum in consequence of undertaking this activity. The contained
information does not preclude any further professional advice. The prospective user of this
memorandum is encouraged to carry out additional diligence and gather any information which is
necessary for making an informed decision including taking professional advice from a qualified
consultant / technical expert before taking any decision to act upon the information. For more
information on services offered by SMEDA, please contact our website: WWW.SMEDA.ORG.PK
INTRODUCTION TO SMEDA:
Feasibility Study – Barbecue Restaurant (Rs.2.20 Million)
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The Small and Medium Enterprises Development Authority (SMEDA) was launched by Govt. Of Nawaz
Sharif in October 1998 with having a clear objective to support economy and giving a drive to the
economy by building up of Small and Medium Enterprises (SMEs).SMEDA is relatively a new organization
with a futuristic structure. Having a clear mission "To assist in employment generation and value
addition to the national income, through development of the SME sector, by helping increase the
number, scale and competitiveness of SMEs", SMEDA has carried out ‘Sectoral Research’ to make out
accurate policy, access to finance, business development services, fully planned strategic initiatives and
institutional collaboration and networking initiatives. Simultaneously to the feasibility studies, provision
of business development services to the SMEs by SMEDA has also started to engine the growth. These
services include identification of experts and consultants and delivery of need based capacity building
programs of different types in addition to business guidance through help desk services.
INTRODUCTION TO SCHEME:
Young entrepreneurs was highly supported by “Prime Minister’s Youth Business Loan” which was
offering subsidized financing at 8% mark-up per annum for one hundred thousand (100,000)
beneficiaries, through well reputed institutions, primarily by the National Bank Of Pakistan (NBP) and
the First Women Bank Ltd. (FWBL), having a budget of Rs. 5.0 Billion for the year 2013-14.Small business
loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of 1 year grace period,
and a debt : equity of 90 : 10 will be distributed to SME beneficiaries across Pakistan, covering; Punjab,
Sindh, Khyber Pakhtunkhwa, Baluchistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally
Administered Tribal Areas (FATA).
EXECUTIVE SUMMARY:
The Barbecue Restaurant can be a very profitable and fastest growing business and it is proposed to be
established at a location that has a continuous flow of traffic, convenient parking, preferably near
densely populated middle income areas or flat complexes so that variety of customers can easily get
attracted. Major cities like Karachi, Hyderabad, Sukkur, Larkana, Multan, Lahore, Gujranwala,
Faisalabad, Sialkot, Gujarat, Rawalpindi, Peshawar, Hub and Quetta etc. are suitable to house the
project. Common menu items at the proposed Barbecue restaurant includes fish, steaks, beef
sandwiches, Kebab item, French fries, salad and cold drinks which are mainly preferable.
The installed capacity of Barbecue Restaurant is to serve 335 clients per day; however, the restaurant
would initially start business with 140-150 clients. 12 personnel would be required to manage the
operations of Barbecue restaurant. Total Cost Estimates are Rs. 2.20 million with a fixed investment of
Rs. 1.88 million and an initial working capital requirement of Rs. 0.32 million. Given the cost
assumptions, internal rate of Return (IRR) and payback are 54% and 2.25 years respectively.
Technology:The proposed setup with used Barbecue cooking machinery including grilling machine,
instant Marinator, fryers, and pre-processing equipment would serve popular Barbecue.
Product:Mainly we have planned to offer popular Barbecue items, including Chicken and Beef
burgers, Chicken Tikka, Russian salad, Kebab items, beef sandwiches and steaks have been selected
to be served separately or as combo meals through the restaurant. It has installed capacity of
serving 335 customers per day but is estimated to start with 140-150 customers per day.
Target Market:The middle income segment of Karachi is mainly targeted. Specifically we are
targeting youngsters and families who love to have get-togethers.
CRITICAL FACTORS:
Whether an entrepreneur is opening a new Barbecue Restaurant or trying to expand an existing
Barbecue outlet, there are winning principles that can improve the chances of success. Some key
success factors are as follows:
PROCESS FLOW:
Main Course
Drive Meal Take-
through Preparation Away
Customer
PLACE ORDER Packing
Front Desk
Order in
Or Queue
Waiter
Walk-in
Dine-In
Customer Sidelines
(Family)
(Family) Preparation
Serving
results of the analysis are outlined in this section. The projected Income Statement and BalanceSheet
are attached as annexure.
Total 933,000
Considering the size of the proposed establishment, it is assumed that the owner would be managing
the overall affairs of the Barbecue setup. Owner will process and check bills, invoices, and cash and also
maintain accounts etc. It is essential to hire experienced cooks, trained in operating machinery for the
Restaurant. The proposed project would need a total of 12 persons to handle the restaurant operations.
Salaries of all employees are estimated to increase at the rate of 10% annually.
DESIHOLIC BARBECUE
COMMON SIZE INCOME STATEMENT
YEARS YEAR 2015 YEAR 2016 2015 % 2016%
DESIHOLIC BARBECUE
BALANCE SHEET
YEAR 2014 YEAR 2015 YEAR 2016
ASSETS
FIXED ASSET AMOUNT (PKR) AMOUNT (PKR) AMOUNT (PKR)
MACHINERY & EQUIPMENT 933,000 839,700 755,730
BUILDING 233,000 209,700 188,730
OFFICE FIXTURE & FURNITURE 181,850 163,665 147,298
TOTAL FIXED ASSETS 1,347,850 1,213,065 1,091,758
CURRENT ASSET
CASH & BANK BALANCE 234,500 363,927 910,147
RAW MATERIAL INVENTORY 87,150 97,608 109,321
PREPAID RENT 505,000 505,000 505,000
TOTAL CURRENT ASSETS 826,150 966,535 1,524,468
PRELIMINARY EXPENSES 25,500 20,400 15,300
TOTAL ASSETS 2,200,000 2,200,000 2,631,526