INTRODUCTION TO BUSINESS FINANCE

TOPIC:

BUSINESS PLAN OF RESTAURANT

DERA -E- KHALIFA

INSTRUCTOR: GROUP MEMBERS:

MAM UROOJ ISTEQLAL SAMEEN SAIFULLAH (64147)
FAHAD ARSHAD (64332)
MAHAM (63936)
DANIYAL RAO (63988)
INTRODUCTION

DERA-E-KHALIFA The Restaurant is a creation by Mr. Fahad with his Friends whose are the shareholders, who are
highly passionate, dynamic and motivated entrepreneur. They have an excellent experience in catering and marketing
with a renowned organization. With the vision of expanding his business across the country he has developed a business
plan in assistance with his Friend, who is financial expert at country’s central bank.
A combinational of Marketing, Finance and operations expert under one umbrella will definitely provide breakthrough
to this business.
Mr. Daniyal , Ms. Sameen , Ms. Maham are the Shareholders of Restaurant therefore they are fully aware of
consumption pattern of the target market, norms and values of the people residing there. It would prudently strengthen
him in achieving business objectives.
 VISION, MISSION & OBJECTIVES
VISION
To establish a fast food chain across the
country providing hygienic, quality and
halal food services.
MISSION
• To operate business ethically and
sincerely
• We grow our business profitably
• We keep customer retention
• Provide value for which customer
pays
• We take customer feedback at our
core
OBJECTIVES
• To make this business a destination
for all the customers who habitual of
fast food.
• To build a long term relationship
with the customers by launching web
portal whereby customers can place
order online in the selected vicinity
• Our main focus will be serving high-
quality food at a great value.
 MARKETING PLAN

 The fast food restaurant is a growing segment in Pakistan relying heavily on the changing lifestyle patterns,
population growth of the target age group and the related increase in employment of women. The fast food
consumption has also increased due to increase in the employment rate of male / female population aged between
20 to 29 years (fast food goers).
 In today’s hectic urban lifestyles, demand for convenience dominates all other preferences. People want quick and
convenient meals. They do not want to spend a lot of time preparing meals, travelling to pick up means, or waiting
for meals in restaurants.
 We are targeting young as our primary market, “MAT” is the place to meet and hang out after coaching classes.
Due to heavy extra-curricular activities among youth, it is common for school and college students to have some
meals with their friends. They tend to flock to fast food joins at fast food outlets.
 MARKET SIZE

 Market size for fast food business can be estimated through following statistics.

Product Daily Sale (Nos.) Retail Price (per Revenue Generation

unit) (per day)
Zinger 600 Rs. 450 Rs. 90,000
Broast (Qtr) 100 Rs. 450 Rs. 15,000
Broast (Full) 100 Rs. 1400 Rs. 60,000
Club Sandwich 180 Rs. 220 Rs. 21,600
Cold Drinks 500 Rs. 50 Rs. 10,000
(Regular)
Chicken Burger 70 Rs. 350 Rs. 7,000
French Fries 100 Rs. 150 Rs. 4,000
Total 1650   Rs. 207,600
 OPERATONAL PLAN

 Anticipated Sales / Revenue Generation

Item descriptions Sales Price / Unit First Year Sales First Year Sales
(No.) Revenue
Zinger Burger Rs. 450 21600 (60 / day sale) Rs. 2,592,000

Chicken Broast Rs. 450 21600 (60 / day sale) Rs. 2,592,000
(Qtr)
Chicken Broast Rs. 800 10800 (30 / day sale) Rs. 2,376,000
(Half)
Chicken Broast Rs. 1400 7200 (20 / day sale) Rs. 3,600,000
(Full)
Chicken Burger Rs. 350 10800 (30 / day sale) Rs. 864,000

Club Sandwiches Rs. 220 12600 (35 / day sale) Rs. 1,260,000

Cold Drinks Rs. 50 36000 (100 / day Rs. 720,000

sale)
French Fries Rs. 150 18,000 (50 / day sale) Rs. 540,000

Total Revenue     Rs. 14,544,000

 OPERATIONAL PLAN

Anticipated Cost / Unit

Item descriptions Cost per unit First Year Sales First Year Cost
(No.)
Zinger Burger 75 21600 1620000
Chicken Broast 75 21600 1620000
(Qtr)
Chicken Broast 140 10800 1512000
(Half)
Chicken Broast 280 7200 2016000
(Full)
Chicken Burger 55 10800 594000
Club Sandwiches 65 12600 819000
Cold Drinks 17 36000 612000
French Fries 15 18000 270000
Total Revenue     Rs. 9,063,000
 EXPENSES AND CAPITAL
REQUIREMENTS

 Machinery and Equipment Requirement

Machines Qty Price / Total Production Capacity /
Unit Day
Commercial Fryer 2 86500 173,000 800 units
(Branded)
Broast Machine 1 395,00 395,000 480 units
(Branded) 0
Freezers (25 cf) 1 90,000 90,000  
(Branded)
Hot Plate for Burgers, 1 55,000 55,000 250 units
Kebabs & Sandwiches
(local)
Fries Cutter (local) 1 7,000 7,000  
Generator 1 75,000 75,000  
EXPENSES AND CAPITAL
REQUIREMENTS

 Space Requirement
Space Requirement Area (Sqft) Renovation Cost
Kitchen & Meal Preparation 350 175,000
Section
Front Desk / Reception 25 30,000
Store 100 20,500
Waiting Area 25 24,500
Total Area 500 250,000

HR Requirement
Description No Of Salary Per Salary Per year
Employees Month
Owner Manager 1 20,000 240,000
Kitchen Supervisor 1 15,000 180,000
Servers 3 24,000 288,000
Dish Washer 1 8,000 96,000
Cleaner 1 8,000 96,000
Security Guard 1 12,000 144,000
Total 8 87,000 1,044,000
EXPENSES AND CAPITAL
REQUIREMENTS

 Furniture & Fixture Requirements

Furniture and Fixture cost QTY Unit Price Total Price
Dining Table (Square) 6 4000 24,000
Chairs (Standard) 24 1500 36,000
Trays (Crockery) 50 100 5,000
Portable Emergency Lights 4 2500 10,000
Counter / Working Tables 1 15,000 15,000
Counter Chairs 2 1500 3000
Cash Counter / Cash Handler 1 15,000 15,000
Wall lights / Tube Lights 6 1200 7200
Wall fans 6 2500 15,000
Total Furniture & Fixture cos     130,200
EXPENSES AND CAPITAL
REQUIREMENTS
 Raw Material Requirements (For 7 Days)

Raw Material Requirements (For 7 Days) Amount

Chicken (For Zinger and Broast) 50,000
Material for Burgers 21,000
Material for Sandwich 10,000
Packaging Material 10,000
Soft Drinks and Fries 17,000
Total Requirements 108,000

 Working Capital Requirements

Description Days Amount
Utilities 30 59,000
Salaries 30 87,000
Rent 30 60,000
Raw material 7 108,000
Total Working Capital Required   Rs. 314,000
EXPENSES AND CAPITAL
REQUIREMENTS

 Utilities Requirements
Utilities Per Month Per Year
Electricity 35,000 420,000
Gas 22,000 264,000
Telephone 2000 24,000
Total Utilities 59,000 708,000

 Miscellaneous Expenses

Description Per Month

Machinery Maintenance Cost 5% of Machine Book Value
Marketing Cost Rs. 20,000
Packaging Cost Rs. 25,000
Other Expenses Rs. 30,000
 Project Cost Summary

Land & Premises      

Deposits (upfront amount) 1 360,000 360,000
Renovation / decoration   250,000 250,000
Total requirements for Land & Premises     610,000
       
Raw Material Requirements (For 7 Days)      
Chicken (for Zinger, Broast)     50,000
Material for Burgers     21,000
Material for Sandwiches     10,000
Packaging Material     10,000
Soft Drinks and Fries     17,000
Total Raw Material Requirements     108,000
       
Marketing & Advertisement at Opening      
Cable TV Tickers     15,000
Banners (Different Sizes)     20,000
Digital Banners     16,000
Pamphlets     4,000
Bill Boards     10,000
Total Marketing & Advertisement     65,000
expenditure
 Project Cost Summary

 Project Financing

Description Details

Total Project Cost 1,733,200

Total Equity (10%) 173,320

Bank Loan (90%) 1,559,880

Markup (per annum) 8%

Tenure of the Loan 8 years

Grace Period 1 year

 Project Cost Summary

 Machinery Maintenance Cost

Machines Qty Per Unit Total Value Depreciation Maintenance
Value Cost Cost (2.5%
of
Depreciation
) after every
three
months
Commercial Fryer 2 86,500 173,000 28,833 2881
Broast Machine 1 395,000 395,000 65,833 6583
Freezers (24 cf) 1 90,000 90,000 12,857 1285
Hot plate for 1 55,000 55,000 7,857 785
Burgers, Kebab &
Sandwiches
Fries Cutter 1 7,000 7,000 739 76
Generator (1.5 1 75,000 75,000 11022 1103
KVA)
Total (Per Year)       127,141 12,713
 FINANCIAL PLAN

 Projected Income Statement

  Year 1 Year 2 Year 3 Year 4 Year 5
           
Revenue 14,544,000 16,289,280 18,243,994 20,433,273 22,885,266
           
Net Sales 14,544,000 16,289,280 18,243,994 20,433,273 22,885,266
Raw Material Cost 9,063,000 10,150,560 11,368,627 12,732,862 14,260,806
Labor & Salaries 1,044,000 1,169,280 1,309,594 1,466,745 1,642,754
Utilities 708,000 792,960 888,115 994,689 1,114,052
           
Cost of Sales 10,815,000 12,112,800 13,566,336 15,194,296 17,017,612
           
Gross Profit 3,729,000 4,176,480 4,677,658 5,238,977 5,867,654
           
General Expenditure &          
Selling Expenses
Rent Expense 720,000 792,000 871,200 958,320 1,054,152
Office & Miscellaneous 30,000 33,000 36,300 39,930 43,923
Expense
Amortization Expense 5000 5000 5000 5000 5000
Depreciation Expense 127,141 114,427 102,984 92,686 83,417
 FINANCIAL PLAN

Maintenance Expense 12,713 11,442 10,298 9,268 8,341

Marketing & 150,000 139,500 129,735 120,654 112,208
Advertising
           
Sub Total 1,044,854 955,869 1,025,782 1,105,204 1,194,833
           
Operational Income 2,684,146 3,220,611 3,651,876 4,133,773 4,672,820
           
Financial Charges (8% 124,790 124,790 110,805 95,700 79,388
per annum)
           
Earning Before Taxes 2,559,356 3,095,821 3,541,071 4,038,073 4,593,432
           
Tax 262,887 371,559 472,767 597,970 750,693
           
Net Profit 2,296,469 2,724,262 3,068,304 3,440,103 3,842,739
 FINANCIAL PLAN
 Projected Statement of Cash flow
Projected Cash Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Flow Statement

             
Cash flow from            
Opening Activities

Net Profit   2,296,469 2,724,26 3,068,304 3,440,103 3,842,739

2
Add: Depreciation   127,141 114,427 102,984 95,686 83,417
Expense
Amortization
Expense

(Increase) /   (12,960) (14,515) (16,257) (18,208) (20,393)

Decrease in RM
Inventory
             
Net Flow   2,441,570 2,858,20 3,192,545 3,555,997 3,951,550
Operations 5
 BALANCE SHEET

Year 1 Year 2 Year 3 Year 4 Year 5

Non Current
asset

Land 610,000 720,000 830,000 940,000 1,050,000

Current Asset

Inventory 9,063,000 10,150,560 11,368,627 12,732,862 14,260,806

Machinery and 173,000 350,000 90,000 50,000 90,000
equipment’s

Total Asset 9,846,000 11,220,560 12,288,627 13,722,862 15,400,806

Owners’ 9,846,000 11,220,560 12,288,627 13,722,862 15,400,806
Equity
 FINANCIAL PLAN

 NET PRESENT VALUE

 We just take 5 years to calculate NPV
 Total project cost = 1733200
 For (+ve)-NPV; @ 10%
 At year 0= 1733200
 At year 1= (2296469)*{1/(1+10%)^1}= 2066822
 At year 2= (2724262)*{1/(1+10%)^2}= 2179409
 At year 3= (3068304)*{1/(1+10%)^3}= 2147812
 At year 4= (3440103)*{1/(1+10%)^4}= 2064061
 At year 1= (3842739)*{1/(1+10%)^5}= 2386038
 NPV @ 10% = 9110943
 FINANCIAL PLAN

NET PRESENT VALUE

Total project cost = 1733200
 For (-ve)-NPV; @ 50%
 At year 0= 1733200
 At year 1= (2296469)*{1/(1+50%)^1}= 324372
 At year 2= (2724262)*{1/(1+50%)^2}= 162186
 At year 3= (3068304)*{1/(1+50%)^3}= 248643
 At year 4= (3440103)*{1/(1+50%)^4}= 400101
 At year 1= (3842739)*{1/(1+50%)^5}= 486550
 NPV @ 50% = -111340
 FINANCIAL PLAN

 IRR
 IRR = RL + (+NPV)/(+NPV)-(-NPV) * RH-RL
 IRR = 10% + (9110943)/(9110943)-(-111340) * 50%-10%
 IRR = 39.5%
 CONCLUSION

 Starting up in business is an exciting challenge. However, it is necessary to have a good

idea, a clear understanding of the market and financial knowledge and skills to support
the business' development. There are many more things that go into running it than just
providing the product(s) or service(s) that your business offers. We’ll also be responsible
for our business’s finances, protecting our business and personal assets, keeping our
business legal, paying taxes, keeping records, managing employees and more.
 researching the market
 assessing the competition
 predicting revenue and costs accurately
 Securing adequate finance.
THANK YOU