Business Plan Paper
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3-SSRBusinessPlan.docxRunning Head: 3-SSR BUSINESS PLAN
3-SSR BUSINESS PLAN -2
3-SSR Business Plan
Contents Executive Summary 3 Business Description and vision 4 Definition of market 4 Description of products and services 5 Organization and Management 6 Marketing Sales and Strategy 7 3-SSR-Porter’s five Forces 8 Abel Business Scope for 3-SSR 10 Who do we serve? 10 What do we Offer? 11 Technology 11 SWOT Analysis 11 Strengths 11 Weaknesses 12 Opportunities 12 Threats 12 Marketing Mix-4Ps 12 Product 12 Price 13 Place 13 Promotion 13 Point Of Difference (POD) - Point of Parity (POP) 14 Financial management 15 Conclusion 16 References 17
Executive Summary
The 3-Star-Style Restaurant (“3-SSR”) will be a moderately priced 50 seat restaurant offering family style food and service. Roasted chicken, pot roast, Samosas and Purichole along different Parathas, wraps and generous salads are all on the menu. We will offer specialty selections including lighter options and smaller portions for a children’s menu.
The restaurant will be family owned and operated by Pargat Singh kahlon and Preeto Singh who both have experience of over 15 years in the restaurant and catering industry. Pargat and Preeto will be leasing a 3000 square foot space located on Highway 90 between Sanderson & Alpine, Texas. The site was previously leased as an Italian restaurant. However, the former tenant removed the majority of the furniture, fixtures and equipment which will need to be replaced. The location will also require some additional renovation to update the lavatories and increase table space in the dining area.
The decor will feature wood accented chairs with blue and white checked table cloths. Dinner style tables will be surrounded by wooden chairs with comfortable seating cushions. Sales projections assume 1200 customers per week resulting in weekly sales of just over $14,000 or $728,000 annually. This equates to around $242 per square foot in sales annually which positions 3-SSR as a highly desirable concept for ownership in a table service market where $200 to $325 per square foot is considered moderately profitable and therefore a good investment. Total startup costs will be $320,294, $150,000 of which will be contributed by the owners and the remainder will be secured by a proposed bank loan.
In the analysis of porter’s five forces, lack of barriers to entry in the industry, customers trust than home-made food is healthier than restaurant food, presence of close substitutes firms in the industry and supplier power in provision of natural and quality products are some of the competitive factors that are likely to affect our position but all the same, 3-SSR is prepared in all areas to stand tall in the industry.
Business Description and vision
The 3-Star -Style Restaurant will be located in Marathon, TX a town of approximately 50,000 people which near major airports which are El Paso International Airport (ELP) and Midland/Odessa International Airport (MAF). The restaurant will be wholly owned and operated by Pargat and Preeto. The restaurant will serve a variety of classic home-style favourites from pot roast and mashed potatoes to patty melt and vanilla ice cream. The restaurant will be open 7 days a week, running from Monday to Saturday from 7:00am -9:00am and on Sunday from 11:00am to 5:00pm. The vision which serves as the purpose statement to the restaurant is “premier home-style dining restaurant in Marathon, TX town offering reasonably priced meals, in a warm, relaxed and comfortable setting.”(Heald, 2017).
Definition of market
The Marathon, TX town area is in great need of a family style restaurant. This section of on Highway 90 between Sanderson & Alpine, Texas is commonly referred to as “fast food alley”. The selection of fast food is vast, however; the area is limited on its family restaurant choices. 3-SSR’s nearest competitor, The AU Bon Restaurant is located over 3 miles away from the location. Further, established in the 2000s the AU Bon Restaurant’s customers are older than the targeted family group 3-SSR focuses on.
Description of products and services
Proper labelling and rotation techniques, accompanied by ample storage facilities will ensure that high quality prepared product will be sufficiently available to meet the demands during peak business hours. Replenishment and ongoing preparation will continue during off-peak business hours. The restaurant layout, including the dining room, kitchen and serving line, has been designed for efficiency and flexibility to accommodate the fluctuation in customer traffic and peak meal periods.
Upon arrival, guests will be greeted immediately by either the assistant manager or a server and asked for the seating preference. Drink orders will be taken and guests can munch on our complimentary rolls. Once the customer’s order is taken, the order will automatically be printed to a requisition printer located in the grill area. The grill cook will use the printed ticket to keep track of orders and place the meal under the heating lamps until the order is complete. The kitchen preparation line has been designed to be operated by a minimum staff of 1 line cook and a maximum of 4 cooks. This design allows line staffing to be adjusted to the business volume. Shift changes for all staff will involve cleanup, restocking and preparation. All monies will be settled at the end of each shift. The closing shift will involve designated closing duties that will leave the restaurant clean and fully prepared for the next day (Petzer& Mackay, 2014).
At 3-SSR, we will position ourselves as the premier home-style restaurant by preparing quality home cooked meals with simple wholesome ingredients. Pargat and Preeto will also provide home cooked fare that appeals to the current trends of healthier food and offers menu selections which will appeal to this group.
Organization and Management
3-SSR expects to hire 15 employees. Together, Pargat and Preeto will personally select each candidate. They’ve adopted an effective interview process designed to staff the restaurant with highly qualified people for each position. Each applicant will be rated and evaluated according to a pre-defined set of standards designed for each position. Background checks will be utilized for designated positions. Recruiting efforts will always centre on referrals.
The restaurant will be owned by Pargat Singh Kahlo. Pargat began his restaurant career at the age of 20 working in a quick-service foodservice operation and earned his way through college as a server and bartender. After earning his degree, he worked for a regional restaurant chain and an independent fine dining restaurant. In these organizations, he held the positions of Assistant Manager and then General Manager.
Preeto Singh received her Culinary Degree from the Art Institute in Dallas. After graduation, she was employed by a local chain restaurant and then at a Five Star Hotel in Dallas. Preeto will initially be employed as the Kitchen Manager. Initially, Jeff and Betty will fill in many of the management gaps. Over time, they have plans to hire a sales director, a general manager, and a kitchen manager.
To meet the gaps associated with payroll, inventory management, and cost accounting, the Pargat and Preeto will purchase POS (point of sale system) that simplifies communications between the kitchen and the wait staff. Orders go through the computer, directly to the kitchen printer. Another benefit of restaurant POS programs is that it can track everything from food usage to the most popular menu items. Because the POS system acts as a time clock, it can also help prepare payroll – which will save some money in the bookkeeping department. Along with the daily operations of running a restaurant, a POS system can organize profit and loss statement and sales tax (Shimoff et al…., 2014).
Marketing Sales and Strategy
Our initial marketing campaign will consist of contacting our databases clients and notifying them of our grand opening. We will seek the use of a local mailing service program to assist us in the implementation of the campaign. Ongoing- we will meticulously keep our database current and use the Constant Contact program.
Customer service is of the utmost importance. Customer surveys estimate that only 1 in 20 customers that have a problem in a restaurant will tell management about it. It will be our goal to provide a wonderful home-style meal combined with superior customer service. Training programs will include teaching materials to train our employees about service attitudes, customer perception and how to handle guest complaints. Pargat and Preeto will conduct periodic staff meetings intended to review policy, increase guest satisfaction and to keep a general line of communication between staff and management. All guest complaints will be acknowledged by the staff and referred to management. Programs will be in place for all types of guest complaints. More serious complaints will be documented and kept on file. Customer feedback will be accomplished by customer surveys or the use of mystery shopper (Kotler et al…., 2015).
( Every supplier independently set the prices of the products especially fresh produce from farms. )3-SSR-Porter’s five Forces
( Little barrier to entry in industry. )
(
Consumer’s preferences for home- made food and also have low switching cost.
)
( Cracker bell offers home comfort food and attracts similar market. Herdays is a full family service restaurant. )
By looking at the porter’s 5 forces model above and putting this into context of 3-SSR, the main problem that 3-SSR face is the growing number of entrants into the market as well as the threat of substitutes and degree of rivalry within the industry. In terms of threat of new entrants, there is little barriers to entry in the restaurant industry and many people have looked and seen that it is a profitable venture where some are targeting to enter and provide catering services and customized recipes for the families upon establishment of special links and agreements.
In terms of threat of substitute Cracker bell and Herdays are close substitution in offering home-style foods to the clients. Herdays is a full service family restaurant established in 1970s but its prices are higher than for 3-SSR. Similarly, Cracker Barrel restaurant offers a menu of home comfort food attracting similar market as 3-SSR but in terms of location, is more than 20 miles from 3-SSR.
In terms of buyer power, buyer has low switching cost they can easily switch to another brand. Additionally, some of the consumers trust that meals at home are healthier than those prepared in restaurants.
In terms of supplier power, they do set prices independently and in cases where we mostly need fresh produce, not many suppliers are in position to supply and those that are willing to supply, and they tend to set very high prices. However, being in industry for more than 15 year, we have established links with suppliers who we believe will not fail us but definitely sure the prices will be high since they supply quality and fresh products that we intend to use to give our clients a special taste.
Abel Business Scope for 3-SSR
Under this model, three question will be answered which are what do 3-SSR offer that gives them competitive advantage, who do we serve and lastly, how do we do it (technology)?
Who do we serve?
Technology
What do we offer?
All the above questions are responded as follows:
Who do we serve?
3-SSR focus to offering dinning home experience by offering premier home-style restaurant by preparing quality home cooked meals with simple wholesome ingredients. We shall target families who after work, they feel tired after work but they can get in our restaurant for a home cooked meal they can enjoy – without the cleanup. However, we also target a broad base of consumers from both the residential and business community.
What do we Offer?
3-SSR provide home cooked fare that appeals to the current trends of healthier food and offer menu selections which are not highly priced but rather offer quality, fresh and home-like food that majority of the customers desire. Customers are sensitive to their health and therefore, they feel they need something that is natural and not with so much chemicals but rather traditional in a way and that is what we are offering to them hence our brand as “S-SSR is the premier traditional home-style restaurant”.
Technology
3-SSR provides a wonderful home-style meal combined with superior customer service. The hotel has proper labeling and rotation techniques, accompanied by ample storage facilities which ensure that high quality prepared product is sufficiently available to meet the demands during peak business hours. 3-SSR uses Point on sale system which deals with payroll, inventory management, and cost accounting. Lastly, 3-SSR will be able to offer home-style meals for a reasonable price in a comfortable ‘home-like’ setting and focus on treating each and every one with dignity and respect – just like we would at our own home!
SWOT Analysis
Strengths
3-SSR is located in place that has good access to infrastructure and easily reachable by the customers, exceptional staff with the can do attitude with combined 15 years in the restaurant industry, established customer market and approved vendors because owner has experience in the catering industry, because of our restaurant is smaller, we can provide exceptional quality by hand-selecting our market specials when compared to our larger corporate competitors and lastly, hand selecting of the staff gives restaurant the ability to have employees who provide unsurpassed service when compared to our larger competitors
Weaknesses
Recruiting and maintain quality employees will be a challenge to the restaurant. Another weakness is that we have a small space with 50 seat capacity and since we offer unique services and products, we expect customers we serve to increase tremendously hence need to invest towards the expansion of the space.
Opportunities
There is a limited barrier to entry in the industry which offers opportunities to enter into business immediately. 3-SSR focuses on offering additional catering services in future for family reunions, weddings and other events desiring a “home-style” menu.
Threats
Some of the threats are include; rising operational costs, some consumers that trust meals at home are healthier than those prepared in restaurants and also government mandates which include restaurant operation, food safety, and worker protection at the federal level and health, sanitation, safety and fire at the local level.
Marketing Mix-4Ps
Product
3-SSR provides quality home cooked meals with simple wholesome ingredients. Our home cooked fare appeals to the current trends of healthier food and offers menu selections which are not highly priced but rather offer quality, fresh and home-like food that majority of the customers’ desire. We also offer speciality selections including lighter options and smaller portions for a children’s menu. 3-SSR is known as a premier home-style restaurant providing quality meals at the reasonable prices. We blend our product with warm and friendly service expected from a family-style restaurant creating an informal, comfortable environment which will make the customers satisfied and want to return again and again, unlike our competitors.
Price
Our Product and services are reasonably priced to reciprocate their value. Our meal price will range between 6 to 12 $ dollars with lunch going at an average of $6 and dinner going at an average of $10. This pricing is quite different from our competitors who their prices range between $8 to $17 and their customer services are wanting. We intend to create a home experience to our clients and provide to them quality meals that are equal to the value of the money they give.
Place
3-SSR is located at a prime location in Marathon, TX a town of approximately 50,000 people which is close to near major airports which are El Paso International Airport (ELP) and Midland/Odessa International Airport (MAF). Considering our location, our restaurant will be accessible by a good number of people both domestic and international visitors who are entering the country through the airport stations. We intend to advertise our restaurant and put flyers in the nearest airports and also in the social media, to inform the public of our grand opening and unique products and services we are offering.
Promotion
We will have Signage on the West Roads to the restaurant as well as signage over our entrance. We have already a database of the existing catering customers and we will rely on word of mouth to attract these customers and grow our business. Consequently, we will use direct mailing to our potential customers. Lastly, we will put more effort into marketing our restaurant through social media platforms that are within the reach of our target customer base.
Point of Difference (POD) - Point of Parity (POP)
Cracker bell and Herdays are close substitutes to 3-SSR but amidst similarities, 3-SSR has a plan that will make it stand out. Herdays is a full-service family restaurant established in the 1970s but its prices are higher than for 3-SSR. Similarly, Cracker Barrel restaurant offers a menu of home comfort food attracting similar market as 3-SSR but in terms of location, is more than 20 miles from 3-SSR. 3-SSR stand out where it will be offering premier home-style restaurant by preparing quality home cooked meals with simple wholesome ingredients. Also, we will provide home cooked fare that appeals to the current trends of healthier food and offers menu selections which are not highly priced but rather offer quality, fresh and home-like food that majority of the customers’ desire.
3-SSR will have a wide selection on our menu and also have menu options for lighter fare as well as a children’s menu. We will be open 7 days a week and unlike our chain competitors, our servers won’t try to be your best friend our rush you through your meal. Our name says it all “3-Star-Style Restaurant - honest to goodness food served to you by honest to goodness people!”
Our meal price will range between 6 to 12 $ dollars with lunch going at an average of $6 and dinner going at an average of $10. This pricing is quite different from our competitors where Herdays prices are higher than 3-SSR and range from $8.00-$20 per entrée and for Cracker Bell entrees range from $7.99-$14. Therefore, 3-SSR is a restaurant with a unique difference that intends to give its clients a wonderful, friendly and amazing experience.
Financial management
Total startup costs will be $320,294, $150,000 of which will be contributed by the owners and the remainder will be secured through a proposed bank loan. Pargat and will contribute will contribute $150, 000 and are requesting an additional $170,294 in the form of a bank loan. The loan is expected to be a fully amortizing 5-year term note secured by UCC filings on all furniture fixtures and equipment.
Looking at profit/loss projections, the net profit is expected to be $1200, $50000 and $75000 for year 1, 2 and 3 consecutively. The projected cash balances are $25000, $35000 and $60000 for year 1, 2 and 3 consecutively. Lastly, considering the balance sheet, the net worth is expected to be $215000, $230,150 and $239,711 for year 1, 2 and 3 consecutively.
Conclusion
Owing to the fact of prime location with easy access from Interstate 30, exceptional staff with the can do attitude and 15 years in the restaurant industry, already has established a customer market and approved vendors, small size that enhances provision of exceptional quality by hand-selecting our market specials when compared to our larger corporate competitors and hand selecting our employees who will strive to offer unsurpassed service when compared to our larger competitors, it is definitely clear that 3-SSR is a premier Traditional Home-Style Restaurant - - honest to goodness food served to you by honest to goodness people!” and the best business idea to pursue and bring transformation in the restaurant industry.
References
Heald, B. D. (2017). Classic Diners of New Hampshire: America Through Time. Fonthill Media.
Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015).Marketing. Pearson Higher Education AU.
Petzer, D., & Mackay, N. (2014).Dining atmospherics and food and service quality as predictors of customer satisfaction at sit-down restaurants.
Shimoff, J. R., Easley, J. C., Moothart, G. T., Birchem, M. A., &Casci, B. (2014). U.S. Patent No. 8,650,095. Washington, DC: U.S. Patent and Trademark Office.
