1.0 Executive Summary
The purpose of this business plan is to showcase the development and expansion of an Indian restaurant based in the greater Philadelphia metropolitan area. Indian restaurant, LLC (“the Company”) will provide a number of traditional Indian dishes coupled with fusion recipes created by the owner. At this time, the company is seeking a business loan of $150,000 in order to commence operations. The Company was founded this year, and revenue-generating operations are expected to commence in the fourth quarter.
The Indian Restaurant will serve a broad array of traditional Indian cuisine that consists of in, in dishes of food produced, a strong competitive advantage over similar restaurants in the market.
The restaurant will also serve a broad array of both soft drinks and alcoholic beverages. The founder is currently in the process of acquiring a liquor license that will allow the business to serve beer, wine, as well as cocktails on site. The sale of alcohol will greatly boost the revenues of the business during the first three years of operation.
The next section of the business plan will further document the operations of the Indian Restaurant.
As stated above, the Indian restaurant is currently seeking $150,000 of debt capital in order to commence operations. The terms of this loan are to be determined during negotiation. However, this business plan assumes that the company will receive a 10 year term loan that carries a 7% interest rate. Beyond this capital infusion, the founder intends to invest $150,000 of his own funds. It should be noted that given the highly predictable streams of revenue generated by the business, the Indian Restaurant would be a very good candidate for a working capital line of credit for expansion purpose is moving forward. However, this business plan assumes that no further capital be used during the first three years of operation.
As time progresses, the Indian restaurant may seek to establish additional locations with the accrued profit business can also engage in catering operations which were drastically boost the revenues of the business on a month-to-month basis. Finally, the business could easily establish mobile operations so that food can be served on site or at area festivals. This will creating a new revenue stream for the Company.
2.0 The Indian Restaurant
As stated in the executive summary the business will serve a number of classic Indian dishes, both in a sit down and take away capacity. The founder expects that approximately 70% of revenues will come from food directly consumed on site. The founder has a number of specialty recipes that will be incorporated into the restaurant operations in order to set the restaurant apart from other similar restaurants in the market.
Beyond the sale of food, the business will maintain an appropriate liquor license so that a broad array seemed on site. This is a very important revenue center for the business as it will carry gross margins range 10 depending on the type of beverage being sold. The company will comply with all state and municipal regulations regarding the state of alcohol on site. Quarterly excise taxes and all in a very timely manner. Additionally, all employees we properly trained on procedures that limit the potential for liabilities.
3.0 The Financing
3.1 Usage of Funds
Below is a breakdown of how management intends to use the $150,000 business loan and $50,000 capital injection into the business. The funds will be used as follows:
- Location development – $50,000
- Liquor License – $10,000
- Furniture, Fixtures, and Equipment – $60,000
- Working Capital – $60,000
- Professional Fees – $10,000
- Inventory – $5,000
- Misc. Development Costs – $5,000
3.2 Investor Equity
At this time, the company is not seeking outside equity investor
3.3 Exit Strategies
In the event that the owner finds it financially prudent to do so, a qualified business broker will be hired in order to manage the sale of the Indian restaurant to a third-party. There is a substantial demand for restaurants that are profitable, and the owner could easily sell the business for a price to earnings multiple of four times to six times the previous year’s earnings depending on the smoothness of profits as well as the visibility of the Indian restaurant brand name.
4.0 Market Analysis
4.1 Economic Analysis
Restaurants have remained popular in all economic climates given that people are extremely busy these days, and many studies show that most people eat out at least one night per week. In very busy households, this number can balloon to almost 3 nights per week depending on the target market as well as the median incomes of the family.
At this time, the economic climate within the United States is strong. Interest rates have remained very stable despite substantial increase in asset prices among all classes. Unemployment rates are at near all-time lows. Although many economists point to a few indicators that there may be a modest recession moving forward giving rising interest rates – this risk is relatively low. Even during an economic recession, the Indian restaurant will be able to remain profitable given his numerous revenue streams coupled with the high margins generated from income.
4.2 Industry Analysis
There are more than 600,000 restaurants, eateries, and sit down cafés within the United States. Each year these businesses generate approximately $715 billion revenue and provide jobs for about 15 million people. It is considered to be one of the oldest industries within the United States, and given that people are busier these days – the demand for quality restaurants has increased substantially.
One of the common trends within the restaurant industry is to integrate as much technology in as possible in order to reduce the ongoing costs associated with operating a restaurant as well as marketing operations. The Indian restaurant will use a number of online sales platforms in order to boost its revenues from the onset of operations.
4.3 Customer Profile
Among people that will frequent the Indian restaurant, management has developed the following demographic profile that will be used in conjunction with marketing operations:
- Household income exceeding $50,000
- Lives within 5 miles of the Indian restaurant location
- Has an interest in Indian food and is familiar with the menus of these restaurants
- Will spend $10 to $20 per person per visit at the location
Within any given market, there are a number of Indian restaurants that are in operation. This is especially true in major suburban markets as well as all major cities. One of the ways that the Indian restaurant will maintain a strong competitive advantage is that the business will only use top ingredients that are organic. The restaurant will maintain a liquor license which is uncommon among Indian restaurants. This will allow the business to not only have a greater increase in profits, to purchase alcohol on site rather than having to bring their own beverage.
5.0 Personnel Summary
6.0 Marketing Plan
6.1 Marketing Objectives
- On the Internet so that people can quickly place orders to the company’s website as well as third-party platforms.
- Maintain expansive online profiles on social media platforms including FaceBook, twitter, and Instagram in order to have people easily find the restaurant on the Internet.
- Develop ongoing relationships with local catering companies within the target market.
- Develop and implement a moderate sized print campaign targeting residents within 5 miles of the Indian restaurant location.
6.2 Marketing Strategies
Prior to the onset of operations, the company will distribute a number of flyers and coupons to every resident within a 5 mile radius of the restaurant. These coupons will be special offers including free drinks as well as discounts on food. This will create immediate draw to the Indian Restaurant location so that people are familiar with it from the grand opening date. Management anticipates that the business will spend approximately 3% of its aggregate revenues on a monthly basis geared towards print marketing campaigns.
Of utmost importance to the Indian restaurant is maintaining an expansive online presence that consists not only of a proprietary website, but also substantial presence on social media. The proprietary website will showcase the menu, hours of operation, the location, and other information about the business. E-commerce functionality will be embedded into the website so that people can place orders for take away food directly through the platform.
Additionally, the company will maintain an expansive presence on FaceBook and Instagram in order to showcase images of the facility, while also having people be able to leave reviews regarding their experience. This is an important aspect of marketing operations given that stronger views on social media platforms like FaceBook will greatly reduce the ongoing marketing efforts required by the business on an ongoing basis.
The Indian restaurant will also maintain review pages on other platforms including Yelp and TripAdvisor to the people who frequently leave reviews on these websites can quickly find the business. Management will address every single review that comes through on these platforms especially in the incidents were someone had a less than positive experience.
Finally, the Indian restaurant will maintain relationships with caterers and other event planners within the market that have clients that want to serve Indian food during their events. This is an important aspect of operations, and management will seek to develop these relationships during the first six months of operation.
7.0 Financial plan
7.1 Financial Assumptions
- The Company will acquire $150,000 in debt funds to launch operations.
- The founder will inject $50,000 of capital.
- The Indian Restaurant will have a growth rate of 10% per year during the first three years of operation
7.2 Sensitivity Analysis
The revenues of the Indian restaurant are only modestly sensitive to negative changes in the economy. People, especially bit busy working people, will continue to frequent restaurants within their target market. This along with the high gross margins generated from revenues will ensure that the Indian restaurant can remain profitable servicing all underlying financial and debt obligations on a month-to-month basis.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Business Ratios and Breakeven Analysis