Sample Business Plan Restaurant Shuddha Swaad organic food restaurant

Sample Business Plan: Restaurant - Shuddha Swaad, organic food restaurant Shuddha Swaad Executive summary 1.1 Objectives 1.2 Mission 2.0 Company Summary 3.0 Services 4.0 Market Analysis Summary 5.0 Strategy and Implementation Summary 6.0 Management Summary 7.0 Financial Plan Executive Summary Shuddha Swaad is a new medium-sized restaurant located in a Mumbai Suburbs. Shuddha Swaad's emphasis will be on organic and Indian ethnic food. An emphasis on organic ingredients is based on Shuddha Swaad's dedication to sustainable development. Additionally, the restaurant employs its staff from the villages and trains them. Services Shuddha Swaad offers a trendy, fun place to have great food in a social environment. The restaurant offers a large repertoire of ethnic ingredients and recipes from across the states. Ethnic recipes will be used to provide the customers with a diverse, unusual menu. The emphasis is on re-introducing the local healthy options to the city life. Being organic, is just another value addition to it. Customers With the growth trend towards ‘specialty restaurant’ Shuddha Swaad believes that it has a strong market. Its main target audience will be rich hippies who naturally desire organic foods as well as ethnic cuisine, estimated to be at 10,00,000 in numbers. The second group that will be targeted is young nuclear families with double income, which are growing at an annual rate of 12% with 450,000 potential customers. The last group which is particularly interested in the menu's healthy offerings is dieting women which number 350,000. Management Shuddha Swaad has assembled a strong management team. Anitha Desai will be the general manager. Anitha has extensive management experience of organizations ranging from six to 45 people. Priyank Jain will be responsible for all of the finance and accounting functions. Priyank has seven years experience as a CPA. JLastly, Shuddha Swaad has chefs Annapoorna Devi and Durgaprasad Rao who will be responsible for the back-end production of the venture. Collectively they have over 37 years of experience. The market and financial analyses indicate that with a start-up expenditure of $141,000, Shuddha Swaad can generate $350,000 in sales by year one, $500,000 in sales by the end of year two and produce net profits of 7.5% on sales by the end of year three. Profitability will be reached by year two. Highlights Click to Enlarge 1.1 Objectives 1. Sales of $350K the first year, more than half a million the second. 2. Personnel costs less than $300K the first year, less than $400K the second year. 3. Profitable in year two, better than 7.5% profits on sales by year three. 1.2 Mission Shuddha Swaad is a trendy and healthy place to eat, combining an intriguing atmosphere with excellent, interesting food that is also very good for the people who eat there. A rewarding place for employees, which is reflected in their service delivery. 2.0 Company Summary [ Shuddha Swaad is a single-unit, medium-sized restaurant. We focus on organic and creative food. The restaurant will be located in Mumbai. Most important to us is our financial success, but we believe this will be achieved by offering high-quality service and extremely clean, non-greasy food with interesting twists. 2.1 Company Ownership [ The restaurant will start out as a simple sole proprietorship, owned by its founders. 2.2 Start-up Summary The founders of the company are Anitha Desai and her companion Priyank Jain. Priyank focuses on the financial issues and Anitha on the personnel issues. Priyank earned his business major degree from the S.P.Jain institute of management. We have found the location and secured the lease for $2,000 per month. We will be able to set up shop in time to begin turning back a profit by the end of month eleven and be profitable in the second year. The place is already equipped as a restaurant so we plan to come up with a total of $40,000 in capital, plus a $100,000 SBAguaranteed loan, to start up the company. Start-up Requirements Start-up Expenses Legal Stationery etc. Other Total Start-up Expenses $1,000 $1,000 $1,000 $3,000 Start-up Assets Needed Cash Balance on Starting Date Other Current Assets Total Current Assets $88,000 $50,000 $138,000 Long-term Assets Total Assets Total Requirements $0 $138,000 $141,000 Funding Investment Investor 1 Investor 2 Total Investment $25,000 $15,000 $40,000 Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Current Liabilities $1,000 $0 $0 $1,000 Long-term Liabilities Total Liabilities $100,000 $101,000 Loss at Start-up Total Capital Total Capital and Liabilities ($3,000) $37,000 $138,000 Start-up 3.0 Services [ The Menu The menu is going to be extremely simple but changing every day. We will keep a small group of constants on the menu and then feature a chef's recommendation that we plan to have 85% of meals ordering. This will help us to reduce waste and plan ingredients and purchasing. Organic Ingredients The organic ingredient element will allow us to price to the extremely wealthy Internet entrepreneurs who are looking to spend an exorbitant amount of money to have peace of mind that their money is still coming back to themselves. We will be extremely ecologically conscious as well, and spread this across our literature. Ethnic Ingredients and Recipes Our chef will have great latitude in designing and producing menu offerings from many different Indian cultures. We will endeavor to procure all the traditional, authentic ingredients necessary to hold true to these varied and interesting cultural recipes. 4.1 Market Segmentation [back to top] The Rich Trend setters: Organic is becoming a way of life for this target segment. Rich lads, who naturally desire organic foods as well as ethnic cuisine, estimated to be at 10,00,000 in numbers. They are an easy target to attract for the trials. To hold them and make them repeat customers is the key. Nuclear families: Working couples are usually more interested in trying out places which are trendy and healthy at the same time. They have double income and it is particularly easy to make them spend money again - they spend the most on drinks, appetizers and tips. Diet conscious women segment: Last group which is particularly interested in the menu's healthy offerings is dieting women which number 350,000. The organic food menu will always have a line of extremely delicious very low-fat meals. Market Analysis .0 Strategy and Implementation Summary Our strategy is simple, we intend to succeed by giving people a combination of great,healthy, interesting food, and an environment that attracts "trendy" people like a magnet. Implementation isn't simple, but that's in the doing of it, not in the plan. 5.1 Competitive Edge [ Our competitive edge is the menu, the chef, the environment, and the tie-in to what's healthy and trendy. 5.2 Sales Strategy As the table shows, we intend to deliver sales of about $350K in the first year, and to double that by the third year of the plan. Sales Monthly Click to Enlarge Sales Forecast Unit Sales Meals Drinks Other Total Unit Sales 2007 22,822 11,415 240 34,477 2008 35,000 17,500 500 53,000 2009 45,000 22,500 1,000 68,500 Unit Prices Meals Drinks Other 2007 $6.00 $2.00 $3.00 2008 $7.00 $2.00 $3.00 2009 $7.00 $2.00 $3.00 Sales Meals Drinks Other Total Sales $342,330 $22,830 $2,400 $367,560 $525,000 $35,000 $5,000 $565,000 $675,000 $45,000 $10,000 $730,000 Direct Unit Costs Meals Drinks Other 2007 $2.00 $0.50 $1.00 2008 $2.00 $0.50 $1.00 2009 $2.00 $0.50 $1.00 Direct Cost of Sales Meals Drinks Other Subtotal Direct Cost of 2007 $45,644 $5,708 $240 $51,592 2008 $70,000 $8,750 $500 $79,250 2009 $90,000 $11,250 $1,000 $102,250 Sales 6.0 Management Summary Anitha has great experience managing personnel and we are quite confident of his ability to find the best staff possible. Our chef, Annapoorna and Durgaprasad, is already on board and has a published cookbook that will add prestige to the restaurant immediately. We will be looking to find a young, ultra-hip staff to make sure we add the edge that makes Shuddha Swaad so trendy. 6.1 Personnel Plan As the personnel plan shows, we expect to invest in a good team, fairly compensated. We think the planned staff is in good proportion to the size of the restaurant and projected revenues. Personnel Plan 2001 Manager Hostess Chef Cleaning Waiters $60,000 $42,000 $54,000 $30,000 $72,000 2002 $65,000 $45,000 $60,000 $35,000 $100,000 2003 $70,000 $50,000 $65,000 $40,000 $130,000 Other Total People Total Payroll 7.0 Financial Plan $24,000 8 $282,000 $52,000 10 $357,000 $55,000 12 $410,000 We expect to raise $30,000 of our own capital, and to borrow $100,000 guaranteed by the SBA as a 10-year loan. This provides the bulk of the start-up financing required. 7.1 Break-even Analysis Our break-even analysis is based on the average of the first-year numbers for total sales by meal served, total cost of sales, and all operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. We realize that this is not really the same as fixed cost, but these conservative assumptions make for a better estimate of real risk. Break-even Analysis Break-even Analysis: Monthly Units Break-even Monthly Revenue Break-even 14,028 $146,453 Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 7.2 Projected Profit and Loss $10.44 $8.34 $29,459 As the profit and loss table shows, we expect to become barely profitable in the second year of business, and to make an acceptable profit in the third year. Pro Forma Profit and Loss 2007 Sales Direct Cost of Sales Other $367,560 $51,592 $0 -----------Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and $27,000 Other Expenses Depreciation Utilities Payroll Taxes Other $1,000 $1,200 $42,300 $0 -----------$1,050 $1,260 $53,550 $0 -----------$1,103 $1,323 $61,500 $0 -----------$35,830 $72,122 $282,000 $357,000 $410,000 $51,592 $315,969 85.96% 2008 $565,000 $79,250 $0 -----------$79,250 $485,750 85.97% 2009 $730,000 $102,250 $0 -----------$102,250 $627,750 85.99% Total Operating Expenses Profit Before Interest and $353,500 ($37,532) $448,690 $37,060 $9,500 $6,890 $20,670 3.66% $546,047 $81,703 $8,250 $18,669 $54,784 7.50% Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales $10,000 $0 ($47,532) -12.93% Profit Monthly 7.3 Projected Cash Flow The cash flow projection shows that starting cost and provisions for ongoing expenses are adequate to meet our needs until the business itself generates its own cash flow sufficient to support operations. Pro Forma Cash Flow 2001 2002 2003 Cash Received Cash from Operations: Cash Sales Cash from Receivables $367,560 $0 $565,000 $0 $730,000 $0 Subtotal Cash from $367,560 Operations $565,000 $730,000 Additional Cash Received Sales Tax, VAT, $0 HST/GST Received New Current Borrowing New Other Liabilities $0 (interest-free) New Long-term Liabilities Sales of Other Current $0 Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received $0 $0 $367,560 $0 $0 $565,000 $0 $0 $730,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expenditures Expenditures from Operations: Cash Spending Payment of Accounts 2001 2002 2003 $8,979 $395,818 $13,273 $525,084 $20,231 $645,906 Payable Subtotal Spent on $404,797 Operations $538,357 $666,137 Additional Cash Spent Sales Tax, VAT, $0 HST/GST Paid Out Principal Repayment of $0 Current Borrowing Other Liabilities Principal $0 Repayment $0 $0 $0 $0 $0 $0 Long-term Liabilities $0 Principal Repayment Purchase Other Current $0 Assets Purchase Long-term $0 Assets Dividends Subtotal Cash Spent $0 $404,797 $0 $548,357 $0 $681,137 $0 $0 $0 $0 $10,000 $15,000 Net Cash Flow Cash Balance ($37,237) $50,763 $16,643 $67,405 $48,863 $116,268 Cash 7.4 Projected Balance Sheet The table shows projected balance sheet for three years. Pro Forma Balance Sheet Assets Current Assets Cash 2007 $50,763 2008 $67,405 2009 $116,268 Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets $50,000 $100,763 $50,000 $117,405 $50,000 $166,268 $0 $1,000 ($1,000) $99,763 $0 $2,050 ($2,050) $115,355 $0 $3,153 ($3,153) $163,116 Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities 2007 $10,294 $0 $0 $10,294 2008 $15,217 $0 $0 $15,217 2009 $23,194 $0 $0 $23,194 Long-term Liabilities Total Liabilities $100,000 $110,294 $90,000 $105,217 $75,000 $98,194 Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and $40,000 ($3,000) ($47,532) ($10,532) $99,763 $40,000 ($50,532) $20,670 $10,139 $115,355 $10,139 $40,000 ($29,862) $54,784 $64,922 $163,116 $64,922 [ Capital Net Worth 7.5 Business Ratios ($10,532) Business ratios for the years of this plan are shown below. Industry Profile ratios based on the Standard Industrial Classification (SIC) code 5813, Eating Places, are shown for comparison. Ratio Analysis 2007 2008 2009 Industry Profile Sales Growth 0.00% 53.72% 29.20% 7.60% Percent of Total Assets Accounts Receivable Inventory Other Current 50.12% Assets Total Current Assets Long-term Assets Total Assets 101.00% -1.00% 100.00% 101.78% -1.78% 100.00% 101.93% -1.93% 100.00% 43.70% 56.30% 100.00% 43.34% 30.65% 35.60% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 4.50% 3.60% Current Liabilities Long-term Liabilities Total Liabilities Net Worth 10.32% 100.24% 110.56% -10.56% 13.19% 78.02% 91.21% 8.79% 14.22% 45.98% 60.20% 39.80% 32.70% 28.50% 61.20% 38.80% Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising 0.65% Expenses Profit Before Interest -10.21% and Taxes 6.56% 11.19% 0.70% 1.77% 6.16% 3.20% 98.90% 82.32% 78.45% 39.80% 100.00% 85.96% 100.00% 85.97% 100.00% 85.99% 100.00% 60.50% Main Ratios Current Quick 9.79 9.79 7.72 7.72 7.17 7.17 0.98 0.65 Total Debt to Total 110.56% Assets Pre-tax Return on 451.33% Net Worth Pre-tax Return on -47.64% Assets 23.89% 45.03% 4.30% 271.84% 113.14% 1.70% 91.21% 60.20% 61.20% Additional Ratios Net Profit Margin Return on Equity 2001 -12.93% 0.00% 2002 3.66% 203.88% 2003 7.50% 84.38% n.a n.a Activity Ratios Accounts Receivable 0.00 Turnover Collection Days Inventory Turnover Accounts Payable 39.35 Turnover Payment Days Total Asset Turnover 5 3.68 9 4.90 11 4.48 n.a n.a 34.83 28.19 n.a 0 0.00 0 0.00 0 0.00 n.a n.a 0.00 0.00 n.a Debt Ratios Debt to Net Worth Current Liab. to Liab. 0.00 0.09 10.38 0.14 1.51 0.24 n.a n.a Liquidity Ratios Net Working Capital Interest Coverage $90,469 -3.75 $102,189 3.90 $143,075 9.90 n.a n.a Additional Ratios Assets to Sales 0.27 0.20 0.22 n.a Current Debt/Total 10% Assets Acid Test Sales/Net Worth Dividend Payout 9.79 0.00 0.00 7.72 55.73 0.00 7.17 11.24 0.00 n.a n.a n.a 13% 14% n.a