THE BURGER

HOUSE

(BUSINESS PLAN )

Submitted by:
 EXECUTIVE SUMMARY
The Burger House is homely restaurant where you can enjoy delicious and healthy burgers. It
will be owned by three owners Miss Sujita Khadka, Miss Sneha Pradhanang and Manju Kumari
Rai. It will provide customers with the best quality burgers which are worth its price. It aims to
provide quick service and the burgers are at cheapest price without compromising on the
quality. The very idea of The burger House came from the notion that nowadays people are
busy with their schedule and spare very little time to eat. So, The Burger House mainly focuses
on the take away customers rather than providing them with a fine dining setting. Such fast
food item will give the customers overall satisfaction.

The total capital requirement is Rs.434401 among which 54% is planned to be raised from the
loan and rest 46% from the contribution of the owners in the equal proportion. This venture
will pay a tax of Rs. 707971which is 25% of the net income i.e. Rs.2123915 in the first year
itself.

All the three owners have completed their under graduate course from Kathmandu College of
Management (KCM). Ms.Manju K.Rai has worked as a marketing manager in King’s burger for
three years. Ms. Sneha Pradhanang has experience of three years working as an accountant in
pizza Hut and Ms. Sujita Khadka has working experience of 3 years as an operating manager in
Momo Magic

The burger house will open its shop in new roads which is proximity to the targeted customers
(shoppers, office people, youngsters, customer of banks, etc.). It plans to open other outlets in
near future. It plans to create customer delight by satisfying them with remarkable services by
giving them more then they have expected or at least meet their expectations.

1 Marketing Plan
1.1 Description Of the product or services
Burger’s Home is a great place to have quality burger which provides delicious burger
within few minutes of your order. The mission is not only to have a great food but efficient
and friendly service because customer satisfaction is vital.
The restaurant exclusively serves burger in 3 different varieties:
• Hamburger
• Chicken burger
• Vegetable burger

The Burger House guarantees 100% customers satisfaction, value friendly service and provides
quality burger at market competitive prices.
1.2 Comparison of product with its competitors
Burger house has a comparative advantage over its competitors mainly in terms of price,
taste, fast service and its prime location. It doesn’t compromise in taste and in quality. The
burgers are customized as per the Nepali taste.
It focuses on hygiene and cleanliness; the customers are left with no doubt about the
hygiene of the food.
The fast service is another main advantage that makes Burger Home more competitive
than any other food points. This helps to attract customers who are busy and just want to
satisfy their hunger.

1.3 Location
Burger House has planned to open its first outlet in New Road next to Peanuts store. The
area New road has been chosen for various reasons.

Prime Location: New Road is one of the prime locations in the valley. Most of the people
hangover here for shopping and for other purposes. Along with that there are good number of
banks and commercial shops in that area. Also there is no problem

• When it comes to delivery from suppliers as it is easily accessible in terms of

transport facilities.
• Proximity to customers: Our main targeted customers are young people and busy
people since young people like fast foods.

1.4 Main Customers

Our customers are mainly targeted on the basis of age, income, location and regularity.
• Youngsters
• Busy people (office goers)
• The regular visitors
• Customers of banks and other shops

Youngsters who don’t have high income will find our restaurant affordable. The
office people with busy schedule and have very short time to spare for food will
drop in our restaurant for a quick lunch break. So our targeted customers are
mainly middle income people, youngsters and others who visit the area for
shopping.

1.5 Promotional Measures

Burger House has decided not to spend a lot for promotion expenses as the location itself
will be enough to attract the customers. Some promotional measures to be used are:
 • Informative flyers: the flyers would information about The Burger House and
varieties of burgers available with their prices. These flyers will be distributed in
different shop around the vicinity.
• Hoarding Board: the hoarding board of The Burger House will also inform people
about the shop.
• Food magazines and other weekly supplements: The advertisement about The
Burger House will be published in food magazines.

1.6 Total Demand

On the basis of the market survey we have concluded that there are total 35 shops in our
market area and we have taken the 15 sample restaurants:

R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 R11 R12 R13 R14 R15

153 100 145 200 120 90 160 147 80 130 205 160 250 150 159
0 0 0 0 0 0 0 5 0 0 0 0 0 0 5

Now based on the above sample restaurant’s demand, we have estimated total demand as
follows:
Total demand of sample = 1530 + 1000 + 1450 + 2000 + 1200 + 900 + 1600 + 1475 + 800 +
1300 + 2050 + 1600 + 2500 + 1500 + 1595

=22500

Now,

Average demand= 22500/15 = 1500

Therefore, total demand= 1500*35 = 52500 burgers per month.

1.7 Market share

Again, as per our survey the number of competitors is few in the market and their size is
small and the product is dissimilar. With this information on hand we have used the
decision guide table to estimate our market share which is as follows:
From Decision guide table, market share is 20%-30%
As we opt to be at a conservative level we take 20% of the total demand as our market
share:

20% of 52500 = 10500 burgers per month

 = 10500*12 burgers per year

=126000 burgers per year

1.8 Sales Forecast

Our five year sales forecast are as follows:

Calculated as,

Projected sales = 70 % of market share for 1st year

= 70% of 126000

= 88200 burgers

Five year plan forecast

Year Projected sales Percentage
1 88200 70
2 100800 80
3 113400 90
4 126000 100
5 126000 100

1.9 Selling Price

Looking over various methods of calculating the selling price like comparative method, cost
plus method and what the market will bear, we came to conclusion that cost – plus
method is more feasible for our selling price calculation.
Hence, we are using Cost Plus Method to calculate our selling price.

1.10 Promotional Measures

As per the promotion following measures will be used:
• Informative flyers Hoarding Board
• Informative Advertisements in magazines
• Friends and families and other relationships
1.11 Marketing Strategy
Following will be our marketing strategy. Our main focus will be providing value to the
customers. Customers will be our king and our philosophy will be “customers are always
comes first and they are always right”
• Prompt, Regular, Courteous and efficient service to our customers
• Proper display of our Burgers
• Signboards/ Billboards
• Membership card
• Keeping burger house stalls in food fair

1.12 Marketing expenses

We have separated 2000 per month for the marketing expenses since we don’t require
intensive marketing.

2 Production plan
2.1 Production Process

a) First, the required vegetables as Onion, Tomato and Lettuce Leaves are cut and stored
beforehand.
b) As per the order, the buns are buttered and put in microwave for heating.
c) Then, according to the customer’s order, the frozen veg or non veg patty is fried in the
frying equipment.
d) With step c, simultaneously, Mayonnaise and Tomato ketchup is spread on the buns.
e) Now the ingredients are assembled. The assembling process:
Putting the Lettuce,
Then the fried patty,
Then cut vegetables,
Finally cover the bun,
After garnishing the wrapped burger is served.
We will be hiring two chef, among which one will be the master chef and the other will
be the assistant of the other.

Skill Required - the workers should have experience in small hotels or restaurants. He
or she should have good skills in cutting and handling kitchen equipments.
2.3 Life of Fixed Assets

Depreciation rate for machinery and equipments is 12% and for the furniture is 20%
S. No Particulars Amount % Amount
1 Machinery 175000 12% 21000
and
equipments
2 Furniture 104000 20% 20800
Total 41800
Depreciatio 3483
n per month

2.4 Repairs and maintenance

The equipments used are not very complicated. So, if any problem comes in the equipments,
local technician can solve it easily.

2.5 Sources of Machinery and Equipments

We plan to purchase the equipments from the local distributers dealing in kitchen equipments.
We plan to order the local carpenter to design and prepare the furniture of the shop as per
our needs.

2.6 Planned Capacity

Burger house will be open 30 days per month and 360 days per year. Hence our planned
capacity will be as follows:

Planned capacity = 88200/360 = 245 burgers per day

2.7 Future capacity

The existing equipments are enough for more production in the future. Even if our sales
increase by 20-30% in the future, the equipments are enough. However, if it increases beyond
this, we have to increase our operation layout and also we may have to add another cooking
range and additional labors.

2.8 Terms and conditions of purchase of machinery and equipments

For the purchase of the machinery and equipment, we will purchase in cash basis.

2.9 Factory location and layout

Production and delivery is conducted from the same location. The burgers are assembled and
prepared at the same place where it is delivered. So, the customers can witness the
preparation of their burger. The production process follows the assembly line layout where
the production is in a straight line.

There is a kitchen space for the preparation of burger and some chairs are placed where the
customers can sit and have burgers. There are shelves in the kitchen itself for storing the
ingredients required to prepare the burger. Since the raw materials like buns, vegetables, etc
are purchased daily and do not stay in the store for long, much space for inventory storage is
not required.

2.10 Raw Materials required

For daily production of 245 units of burgers, we require the following raw materials.
S. No Particulars Unit Quantity
1 Bun Pieces 245
2 Cheese Packet(1pkt=49 piece) 5
3 Butter Pkt (1 pkt =500gm) 3
4 Tomato Kg 5
5 Onions Kg 5
6 Lettuce Bundle 20
7 Mayonnaise Bottle (1bottle= 2lt) 1
8 Ketchup Bottle (1 bottle= 2 lt) 1
9 Buff meat Kg 5
10 Chicken meat Kg 3

2.11 Cost of raw materials (daily requirement)

S. No Particulars Unit Quantity Rate Amount
1 Bun Pieces 245 5 1225
2 cheese Packet 5 pkt 205 1025
3 Butter Pkt 5 pkt 35 175

2.12 Raw Materials availability

We have considered the following 3 factors before taking decisions about the purchase of raw
materials
Price: We have chosen the supplier with the lowest cost in the valley without compromising on
the quality. We have contracted with Andies bakery, Maha Bouddha for the daily supply of
buns and pattys we require.

Source: (the sources of raw materials i.e. the suppliers we require are in the valley itself and
delivery is not a problem.)

Reliable: The sources have been proved to be reliable through a thorough market study.

2.13 Number of laborers:

Direct Labor: 1 chef, 1 assistant chef and 2 waiters

Indirect labor: Among the indirect labor we only have 1 manager who will be managing overall
burger house expenses and it’s operation

2.14 Cost of labor (monthly)

Designation No. of employee Rate/ month Amount
Direct labor Chef 1 10000 10000
Assistant chef 1 6000 6000
Waiter 2 4000 8000
Total 24000
Indirect labor Manager 1 12000 12000

2.15 Labor availability

We can hire the laborers from within the valley by posting ads on newspapers and through our
networks.

2.16 Labor motivation

In order to increase the productivity of the employees, the owners are responsible to always
motivate them to work harder. So, our employees will have reasonable salary and also a very
friendly and safe working environment.

Moreover, they will be provided with bonuses during Dashain and Tihar. Also, they will be
provided with incentives at work like TADA, tea, meals.
We are open to their feedback and suggestions, so they are always free to have their say. They
will always be heard by us.

2.17 Factory overhead expenses

Factory overhead expense per month is as follows:

S.N Description Amount(Rs)
1 Shop Rent 30000
2 Repair and maintenance 2000
3 Tea 500
4 Stationery 100
5 Transportation 1000
6 Fuel 2000
7 Others 1500
8 Depreciation 3483
9 Indirect labor 12000
Total 52583 / month
2.18 Production cost (per unit)

We have estimated that 70% of the sales will be of ham burger (buff), 20% will be of chicken
burger and the rest 10% will be of veg. burger.

Statement of per unit cost of production for each type of burgers is as follow:
Description Buff Chicken Veg Total
Cost allocation 70% 20% 10% 100 %
%
Monthly RM 97658 27902 13952 139512
Cost
Monthly Direct 16800 4800 24000
labor cost
Monthly factory 36808 10517 5258 52583
OH cost
Monthly total 51266 43219 21610 216035
production cost
Monthly 5145 1400 205
production
quantity
Per unitcost ( Rs) 20 31 27
 3. Organization and Management Plan
3.1 Form of Business

The Burger House will be registered under the Partnership Act 2020. There will be three
partners and all three will invest the same amount and share the same amount of
profit while they are liable for same amount of losses and liabilities. All three will
however supervise and over look the day to day activities of the Burger House.

3.2 Organization structure

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1
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Figure.1 Structure of Organization

3.3 Business Experience and Qualification of the Entrepreneur

Ms Sneha Pradhanang, Ms Manju K. Rai and Ms Sujita Khadka all have completed their
Bachelors from Kathmandu College of Management (KCM). Ms Manju K. Rai has
worked as marketing Manager in the Kings Burger for three years. Ms Sneha
Pradhanang has had 3 years working experience as Accountant in Pizza Hut. Ms. Sujita
Khadka has an experience as an operating manager for three years in MomoMagic
3.4 Pre - Operating Activities

S.N Activities Time Duration

1 Market Survey 2 weeks
2 Preparing a business plan 1 week
3 Registering business 1 week
4 Application and approval of 2 weeks
loan
5 Contacting equipment and raw 2 weeks
materials suppliers
6 Contract of rental purpose 1 week
7 Hiring employees 1 week
8 Setup store 1 week
Total weeks 11 weeks

Figure 2 Gantt chart

Particulars/Time 1 2 3 4 5 6 7 8 9 10 11
(Weeks )
Market Survey
Preparing a
business plan
Registering
business
Application and
approval of loan
Contacting
equipment and
raw materials
suppliers
Contract of
rental purpose
Hiring
employees
Setup store
3.5 Pre-operating expenses Our pre operating expense are registration and survey cost only.
Amortization of the pre operating cost will be done at the rate of 10%.
S. No Description Amount ( Rs)
1. Registration 4500
2 Survey Cost 2000
3 Others 3000
Total 10500
10% amortization 1050
Per month amortization 88

3.6 Fixed asset requirement for the office

Following are the fixed assets requirement for the burger house office and cost calculated
below:

3.7 Administrative expenses

Following are the administrative expense of the burger house:

S.N Description Amount (Rs)
1 Stationery 600
2 Tea 400
3 Telephone 1500
4 Other 1000
5 Depreciation(3.6) 610
6 Amortization (100/10*3.5) 88
Total 4198
 4. Financial Plan

4.1Total Capital Requirement (Project cost)

4.1.1 Fixed Capital= 279000+57000=336000

4.1.2 Working capital

Workings:

Cash Management= Direct Labor + Overhead expenses +Marketing + administrative

=24000+2000+3000+49600

=78600

Raw material in stock are for only 2 days as our raw materials are food items that do not last
long.

RM Stock = (11826-100-100)*12/15 = 139512/15=9301

(Note: electricity and water are not included in the calculation of RM stock)

Working Capital

1. RM (2 days) =9301
2. Cash Management= 78600

Hence working capital= 9301+78600= 87901

4.1.3 Pre – operating activities

From 3.5,

Pre-operating activities= 10500

Therefore,

Total capital requirement= Fixed capital (4.1.1) + working capital (4.1.2) + preoperating
expenses (4.1.3)

=336000+87901+10500

= Rs.434401
4.2 Financial Plan and Loan Requirement Schedule
Particulars Amount Percentage
Equity 214401 54%
Loan 200000 46%
Total 434401

4.3 Security for loan

While taking loan we have considered the following;

• Interest rate
• Loan maturity date
• Repayment schedule
• Loan processing time

4.4 Loan Repayment Schedule

We will be taking loan amount of Rs. 200000 at the rate of 16% for five years. Loan will be
repaid at five installments.
Year Loan Amount Interest (16%) Installment Total Payment
1 200000 32000 40000 72000
2 160000 25600 40000 65600
3 120000 19200 40000 54200
4 80000 12800 40000 52800
5 40000 6400 40000 46800
4.5 Unit selling price

Unit Selling Price (ham burger, cost allocation-70%)

Particulars Amount (Rs) Amount (Rs)
Unit cost of production 29
Per month administration 2939
expenses
Per month marketing expenses 1400
Per month interest loan 1867
Total 6206
Monthly production units 5145
Per unit admin, mark. , 1.21
interest exp.
Total 30.21
Mark up (100%) 30
Selling price 60
Unit Selling Price (chicken burger, cost allocation- 20%)
Particulars Amount Amount
Unit cost of production 31
Per month administrative 840
expenses
Per month marketing expenses 400
Per month interest loan 533
Total 1773
Monthly production 1400 1.27
Total 32.27
Mark up (149%) 48
Selling price 80

Unit Selling Price (veg. burger, cost allocation-10%)

Particulars Amount Amount
Unit cost of production 27
Per month administrative exp. 420
Per month marketing expenses 20
Per month interest loan 267
Total 707
Monthly production 805 0.88
Total 27.88
Mark up (79%) 22
Selling price 50
Hence, the selling price for ham burger is Rs. 60, chicken burger is Rs. 80 and veg burger is
Rs.50
4.7 Cash flow statement

Cash flow statement of the burger house for 1st year is as follows:
4.8 Balance Sheet (first year)

4.9 Break Even Point

BEP (%) = (FC*100)/(S-VC)

Fixed Cost= Factory overhead +marketing +administrative cost + interest
=631000+2000*12+50370+32000
=737370
Variable cost = Raw material + Direct Labor= 1674144 + 288000= 1962144
Now,
Therefore, BEP = (737370*100)/ (5531400-1962144) = 20.66%

BEP (sales volume) = 20.66% of annual sales

= (20.66)/100*5531400
= Rs. 1142787.24
4.10 Return on investment (ROI)

ROI = (Net profit after tax *100)/Total capital employed

= (2123915*100)/434401
= 488.93%

ROE= (Net profit after tax*100)/Total owner’s equity

= (2123915*100)/234401
=906.10%
4.11 Financial projection for the 5 years

Profit and loss account for five years

Particulars 1st 2nd 3rd 4th 5th Capacity 70 80 90 100
100 utilization
Sales forecast 88200 100800 113400 126000 126000
Total sales 5531400 6350400 7144200 7938000 7938000
Workings: calculation of sales volume for year2, 3 and 4:

2nd year:

Total sale: buff burger=70%*100800*60=4233600

Chicken burger=20%*100800*80=1612800

Veg. burger= 10%*100800*50=504000

Total = 6350400

3rdyear

Total sale: buff burger=70%*113400*60=4762800

Chicken burger=20%*113400*80=1814400

Veg. burger= 10%*113400*50=567000

Total = 7144200

4th year

Total sale: buff burger=70%*126000*60=5292000

Chicken burger=20%*126000*80=2016000

Veg. burger= 10%*126000*50=630000

Total = 7938000
 Cash Flow for five years

Particulars Pre- 1 2 3 4 5
operating
Cash inflow
Equity 234401
Loan 200000
Cash sales 5531400 62350400 7144200 7938000 7938000
Total cash 434401 5531400 62350400 7144200 7938000 7938000
4.12 Project feasibility

Burger business is seen to be feasible because these days’ people prefer more fast food than
the food for which they have to wait for long time. On top of that, burger which is known as
feeling food is very popular among the people.

The production of the burger follows a very simple technology, where there is no need of
sophisticated technologies and equipments. It is more a labor intensive one where the skill
labor counts more.
In the business, we, entrepreneurs have created this idea from the corridor principle as we all
have some experience in the related field before. The total capital requirement is Rs. 434401
among which 54% is planned to raise from loan and rest 46% from the contribution of the
owners.

Hence, considering all the aspects involve in our business, we have come to conclusion that
this business venture is feasible and profitable one. However a close monitoring should be
done in the price of raw materials and the controlling should be done to make sure expenses
don’t increase abruptly.
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