Project on Hotel

8/6/2019 Project on Hotel

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[TEMPTATION RESTURANT]

A Project on EntrepreneurialFinance

Project finance

On

Tempta

tion(Multi-cuisine restaurant)

Business Plan Page 1


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Prepared & submitted by:VATSAL PANDYA

YESHA SHAH(MBA II, finance)

SOM LALIT INSTITUTE OF BUSINESS MANAGEMENT

CERTIFICATE

This is to certify that Mr. Vatsal Pandya and Ms. Yesha Shah, students of the

MBA Programme (Finance) of the Som-Lalit Institute of Business

Management (SLIBM), have successfully completed their Grand Project on

the subject Project Finance for Starting up a New Restaurant

TEMPTATION for the academic year 2008-09 and have dully submitted the

report to the institute.

Project Guide: -



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..

(Mr. A .K. Jain

Vice president, VIVRO)

For,

Som-Lalit Institute of Business Management,

Gujarat University

Ahmedabad 380009

ACKNOWLEDGEMENT

First, and foremost we would like to thank for giving us an opportunityof making a

business plan which would enhanced our skills and giving us a concrete path to work

on such project.

Through this acknowledgement we would like to express our sincere gratitude

towards all those people who have been inspirational and instrumental in drafting this

project.

We would like to express our heartfelt thanks to Mr. A. K. JAIN (Vice president,

VIVRO) and DR. JAGDISH JOSHIPURA for his unstinted support, which he

offered right from the conception to the completion of this project report.



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We would also like to thank MR. RAJ MONDAL (General Manager,

OPERATIONS) MR. ASHWIN MEHTA (Manager, F&B) HOTEL HAVELI

Gandhinagar and MR. PURAV DOSHI (ARCHITECT) for their valuable

suggestions and their time and helping where we were wrong and couldnt find the

way out.

We would also like to thankSom Lalit Institute of Business Management to give an

opportunity to do a project on such topic.



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TABLE OF CONTENTS

SR.NO PARTICULARS PAGE NO

1 EXECUTIVE SUMMARY 42 MISION AND VISION STATEMENT

2.1 Mission & Vision 6

2.2 Idea & Core Activities 7

2.3 Product Offering 8

3 INDUSTRY oVeRVIEW

3.1 Description of primary industry 10

3.2 Restaurant Sector 10

3.2.1 Lifestyle 10

3.3 Restaurant sector in Gujarat 11

3.4 Hospitality 11

3.5 Industry After 5 Years 13

4 TARGET CUSTOMERS 15

5 MARKETING PLAN

5.1 Penetration strategy

5.1 Marketing Communication Mix 24

5.2 Advertising 255.2.1 Advertising in Magazines 26

5.2.2 Leaflets in Newspaper 28

5.2.3 Advertising in Radio 29

5.2.4 Creating Temptations Website 29

5.3 Word of Mouth Publicity 30

5.4 Publicity 31

6

COMPETITIVE ANALYSIS



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6.1 Product Life Cycle 35

6.2 Porters 5 forces 37

6.3 SWOT analysis 40

7Layout

7.1 Layout of restaurant 42

8 ORGANISATIONAL STRUCTURE

8.1 Organisation Structure 47

9 Competitors advantages, dis-advantages, barriers

50

10 OPERATIONAL PLAN 54

11 Training 58

12 Miscellaneous issues 61

13 risk factors 63

14 FINANCIAL PLAN

14.1 Profit & loss a/c 65

14.2 Balance sheet 68

14.3 Cash flow statement 69

14.4 NPV & IRR statement 70

14.5 Break even analysis 71

15 EXIT STRATEGY 73

16 Conclusion 75

17 BIBLIOGRAPHY



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EXECUTIVE SUMMARY

TEMPTATION Restaurant offers a trendy, fun place to have great food in a

heritage environment. The restaurant offers a nice interior and a perfect place to have

food. The restaurant provides the food along with entertainment. It provides customer

a unique experience and unique difference than the other restaurants in city. The

emphasis is on providing people a new concept of LIVE COUNTERS. The

TEMPTATION Restaurant would sell the experience of difference along with food. It

would have a Magician and a Tarot Card reader which would add value to the

Restaurant. It would provide the customer what they require and would focus on

satisfying the customers needs. The restaurant would have a great benefit of its

location as it would be in the hub area of the city. The people can enjoy the food in

the atmosphere where they can get relaxed and feel comfort. The restaurant would

provide the unique experience to the people which they have never experienced. The

restaurant would also concentrate on the entertainment part which would see that

people not only feel the new experience but also enjoy the place. The restaurant would

try to make their customers feel comfortable at their best. The place and the

experience of the customers would be such that the customer will recommend their

friends and that would be indirect publicity of the restaurant. TEMPTATION would

be hiring the best chefs so that there is some differences in the food from the others

are serving. The customer would also enjoy the ambience of the restaurant.



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MISSION STATEMENT

TEMPTATION is a trendy and healthy place to eat, combining an intriguing

atmosphere with excellent, interesting food that is also good for the people who eat

there. A rewarding place for employees, which is reflected in their service delivery.

VISION STATEMENT

TEMPTATION will be a global, restaurant offering consistent products and services

in key business and leisure destinations. Our growth will be achieved through hotel

ownership, management and selective franchising. We will be known for our

innovation, exemplary service and superior hospitality. TEMPTATION is committed

to being the employer of choice in the hospitality industry. We have a synergistic

relationship with our customers.



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Idea

My idea is to open a Multi-Cuisine restaurant TEMPTATION catering into Healty

and Hygienic Quality food and Services especially concentrating on Hospitality of

customers. The scope of the idea of Temptation Restaurant is not just limited to To

the taste of food but also to experience the difference and uniqueness.

CORE ACIVITES

TO

PROPOSED BUSINESSThe core activities of Temptation restaurant would be to satisfy the market place and

customers demand. The restaurant requires to satisfying the basic need of the

consumer of serving the best quality food with unique experience. It would have a

consumer friendly atmosphere where proper care of consumer would be taken. It

would provide consumer a different experience in hospitality and service. The

Temptation restaurant would create an atmosphere of entertainment by having a

Magician and a Tarot card reader which would entertain the consumers.

SALIENT FEATURES

The offering at Madhuban Resort would mainly include:

Cottage facility



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The resort provides exclusive village theme based cottage facility for

customers. The cottages have unique facilities for residing.

Restaurant

The speciality of the restaurant is that it provides authentic village food of

different cultures.

INDOOR GAMES

The resort provides indoor games facility like Pool Table, Table Tennis,

Snooker, Carrom, Chess. This facility is available throughout the day.

POOL AREA

The resort provides swimming pool facility.

HORSE & CAMEL RIDING

Horse riding facility is provided at the resort.

LAWN AREA/PARTY AREA

The resort provides a very wide lawn area for customers to enjoy their day.

The lawn area can also be used for parties, wedding, receptions.

MOVIE SCREENING

Special movie screening is also provided after sunset in the lawn area.



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CHILDREN PLAY AREA

A special play area is designed for kids entertainment.

PUPPET SHOWS

Puppet shows is also a part of entertainment for customers.

MAGICIAN

The resort also provides a small magic show to customers.



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INDUSTRY

OUTLOOK

&

OVERVIEW



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INDUSTRY OUTLOOK ANDOVERVIEW

Description of primary industry

Basically the industry which our business plan is related to is the Resort sector,

but at the same time the industry is also related to lifestyle, hospitality and

services industry. So the primary industry is combination of all the fourindustries and it creates a new industry. The relation between all the industries

is such that each sector complements another and adds value to the product and

services provided to customers.

Resort sector

The Indian restaurant services sector is estimated to be worth Rs. 57,000 crore,

out of which only Rs. 3,940 core or 6.9 percent is accounted for by the

organized sector. The vast unorganized segment mainly comprises street-side

stalls/kiosks constituting the majority of consumer food-service units and is

characterized by intense fragmentation and a virtual absence of standardization

of operations. This segment was Rs. 35,000 crore in 2004, which grew by

about 18 per cent to Rs. 41,400 crore in 2005 and in 2006 the segment recorded

a growth of nearly 19% over previous year and stood at Rs. 49,200 Crore. It is

growing continuously, in the last year it was worth Rs. 49,200 crore an

increase of 15.85%. The future of this industry is very bright due to overall

development in all the related sectors and industries.



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Life Style

The life style of the people depends on the disposable income they are having.

People with a high disposable income will have a high standard of living while

people having low disposable income will have low standard of living. During

the past five years, average monthly income has increased almost by 43 percent

and disposable income of individuals has increased nearly to 45 percent. This

growth in income will help the Resort service sector to grow further.

Hospitality

The hospitality industry in India is growing at the rate of 15 per cent annually.Hospitality Industryjust like many other segments in India is booming at an

unprecedented pace. India faces a huge challenge of being "under roomed"

while the economy is growing rapidly. This provides for a huge opportunity for

hospitality industry. Innovations are very important in the services sector,

especially in the hospitality sector. The restaurant business requires

entrepreneurs to continuously come up with new dishes; new ways to present

or serve existing dishes, new services or schemes to satisfy customers, new

ways of enhancing their ambience and new processes to economize operations.

Without innovation, restaurants face the threat of becoming obsolete- leading

to sickness and ultimately driving them out of business or forcing them to

hand the business over to a more efficient and innovative entrepreneurs.

Restaurant Sector In Gujarat

Gujarat ranks 5th among all states in India in terms of the total number of

restaurants. Growth rate in restaurant industry in the state is 12% per

annum.There is a lot of opportunity for growth in this target population

because Gujaratis are known as Food Lover. At all the income levels

especially at the middle and the upper level, disposable income is

tremendously increasing in this state and also the number of Business Class

consumers is increasing, due to The corporate boom.



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Lifestyle and service Industry

The restaurant Service sector is directly related with the Lifestyle of the people.

It is mainly dependent on the disposable income of the people. Currently the

industry is in growth stage and on the other hand service industry is also the

fastest growing industry and is considered as the best sector. Growth in

working womens population and prevalence of nuclear families with double

income are other trends causing this change in the lifestyle of Indians. Increase

in overseas travel and the presence of foreign media in the country have also

change the life style of the people. For instance, last year above 5Million

Indians had travelled abroad and the number is likely to rise by 15% to 20%

every year.



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Industry After five Years

All the four industries are continuously growing. It is estimated that the

hospitality sector is likely to see a further US$ 11.41 Billion in investment over

the next two years. The restaurant service sector is also expecting to grow at a

stronger rate. The total number of outlets increased dramatically in 2006

registering a year on year growth of around 70% as compared to a year of year

growth rate of 29% in 2005.



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TARGET

&MAJOR

CUSTOMERS



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Internal

The Temptation Restaurant can by providing better training to its employees

and doing its operations more efficiently can help the organization to achieve

internal growth.

Franchise:

The Temptation Restaurant can think of franchising in different cities. It can

think of it in future once it achieves success in Ahmedabad. Franchise would

help Temptation Restaurant to tackle more market and would help in building

brand name. It is the second step for the restaurant to franchise itself.

Horizontal:

Horizontal growth strategy would add to the franchise growth strategy. It can

establish a branch in the Ahmedabad if the Temptation Restaurant proves to be

successful. It would help it to cater the more customers in the same market.

Interactive:

Take customer's point of view:

This is the basic thing in every field. The product that restaurant is serving is

for the customer thus it is important to know what they think about it. A

feedback should be taken from every customer whether they liked the

restaurant or not, if not then what changes would they like and how can they be

satisfied.



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Customer relationship:

The data of the people who had entered in the restaurant should be kept. An

emotional attachment should be created with them. The personal detail of the

customer who had entered should be taken and should greet them by messages

or through mails on the auspicious occasions. The restaurant would send cards

and gifts to the recurring customers on their birthday and anniversary.

Once all the contacts are built up in the mailing list, it can issue any number of

powerful promotions to encourage repeat visits or higher check totals. It would

help restaurant to achieve its goal of making the customers think of it first

when planning their next night out. It would give them a good reason, and

they'll come back again and again.

Be the hometown favourite:

The local marketing would connect the restaurant to the pulse of local

community. The restaurant should concentrate on the social responsibility by

sponsoring a community event or by donating food for the good cause. It

should help the society in developing which would create a good image in the

society and would help it in building a good brand name.

Promotion:

A promotional strategy is the distributed communication methods used to

communicate a product or service to its intended market in a controlled and

monitored format. The promotional strategy includes every marketing initiative

that will impact the customers' purchase decision.

PRIMARY DATA COLLECTION



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The primary data collection would be through a small survey. The

questionnaire for the survey would be as under:

(1) What are the purposes for which you generally go out to an eating

outlet/joint?

1. Business Meeting 6. Treat

2. Planned Dinner 7. Entertaining Guests

3. Family Outing 8. Walk-ins

4. Get Together 9. Other, specify

5. Kitty Parties

(2) Please specify the types of cuisines you would like to have: -

1. Lebanese 6. Thai

2. Mexican 7. Indian

3. Japanese 8. Chinese

4. Mediterranean 9. Continental

5. Italian 10. Other, specify

(3) Please specify the type of restaurants that you generally prefer: -

1. Fast Food Outlet 4. Theme Bases Restaurant

2. Fine Dining Restaurant 5. Food Courts

3. Multi Cuisine Restaurants 6. Other, specify

(4) Please specify the probable reasons for your selection of a particular type of

restaurant: -



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1. Opinion of Group 6. Service Quality

2. Popularity 7. Facilities

3. Hygiene 8. Ambience

4. Convenience and Location 9. Other, specify..

5. Choice of Food

(5) Imagine a new fine dining restaurant cum lounge is opening in the city.

Which out of the following add-ons would you prefer to have?

1. Streaming Videos 5. Book/Magazines Racks

2. Valet Parking 6. Pick up and Drop facility

3. Wi-Fi Zones 7. Other, specify

(6) Would you like to have a Transparent Kitchen in the restaurant?

1. Yes 2. No

If No, please specify the reason.

(7) Which newspapers do you generally read?

1. Gujarat Samachar 5. Indian Express

2. Divya Bhasker 6. DNA

3. Sandesh 7. Economic Times

4. Times of India 8. Other, specify

(8) Do you read magazines regularly?

1. Yes 2. No



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If Yes, please name them

(9) Do you listen to Radio?

1. Yes 2. No

If Yes, how many hours a day do you listen to Radio?(1) Less than 1 hour (2) 1 hour 3 hours (3) More than 3 hours

(10) Do you prefer non-vegetarian food?

1. Yes 2. No

If No, would you mind vegetarian and non-vegetarian food being served fromthe same kitchen?

1. Yes 2. No



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(11) From where do you normally get the information about a new restaurant

opening in the city?

1. Newspapers 4. Friends & Colleagues

2. Radio 5. Family & Relatives

3. Cable TV 6. Other, specify..

(12) Would you like to visit such a restaurant cum lounge if it opens in the city?

1. Yes 2. No


(13) Would you like to visit it if it opens in the areas like Ambawadi, Parimal

Garden, and C. G. Road or nearby?

1. Yes 2. No


(14) Would you mind if it opens up in a Mall?

1. Yes 2. No

(15) Please tell us something about yourself for the following information: -

Name: -.

Age (years): -

Gender: - Male Female

Area of Residence: -.



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Area of Office/College: -......



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ADVERTISNG

Temptation initially to make the target audience aware and to attract them

would focus on Advertising and Publicity but its main emphasis would be on

Advertising. Here the main emphasis is to inform customers of opening a new

restaurant in city with different experience.

The various media that Temptation restaurant would resort on for marketing

and advertising restaurant would be:

Advertisements in local newspapers

Leaflets placed in newspapers

Advertisements in Radio Stations

Creating Temptations website

Advertisements in Magazines:

Two different advertisements each 3column X 5 Cm long in Magazines of

Ahmedabad, Rajkot, Bhavnagar, Baroda as also either of Times of India or

Business Standard would be required to make people aware of the

establishment of TEMPTATION restaurant.

One would be to invite the target audience to the new opening restaurant and

the other would be for attracting people to experience the difference and

uniqueness.

This advertisement would be floated on Friday, Saturday and Sunday editorials

of magazines like Today, Sputnik, Stardust and many more relevant magazines

which would reach to the targeted audience. These magazines would also



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attract corporate to come and enjoy the executive lunch that are also being

offered.

Advertisement featuring to invite the target audience to the new

restaurant- TEMPTATION which is opening shortly:

TEMPTATION- Multi Cuisine Restaurant

COME AND EXPERIENCE THE DIFFRENCE

Opening Shortly

WE WILL OFFER YOU THE DIFFRENCE THAT YOU CAN REALISE AND WILL ALSO TRY

AND ACHIVE THE EXPECTATIONS OF OUR CUSTOMERS.

Advertisement featuring attractive the customer for experiencing the

diffrence and uniquueness at TEMPTATION along with membership

benefit.


Temptation is the restaurant where you can find

uniqueness then other restaurants. We will be

known for our innovation, service and hospitality.

Temptation is the place where we will exceed your

expectations.

Temptation- Multi cuisine restaurantA Restaurant specializing in your needs

COME AND EXPERIENCE THE DIFFRENCE

WE WOULD PROVIDE WITH THE MEMBERSHIP BENIFITS TO OUR SPECIAL AND

REGULAR CUSTOMERS. WE WOULD ENSURE YOU THE UNIQUENESS THAT YOUCAN EXPERIENCE.

Temptation is the restaurant where we will try to satisfy

the customer needs and demands. The customers would

experience the innovation, great service and the best

hospitality. We would be known for our hospitality to

the customers. We would also provide with

membership discounts.


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Leaflets placed in Newspapers:The most easy and less costly medium to aware people of the establishment of

the Temptation restaurant would be placing colourful brochure kind leaflets in

the most popular newspapers. This is different from advertising in the

magazines in the sense that only the target audience would be made to come in

contact whereas in case of advertising in the magazines all come in contact

with the advertisement (also those who are not the target audience).

These leaflets would be placed occasionally in the peak season like Diwali,

summer vacations, Christmas and weekends.

The newspapers in which such leaflets would be placed would be local

newspapers like Gujarat Samachar, Divya Bhaskar and other local newspapers

as also either of Times of India or Business Standard. These leaflets would be

circulated to the newspaper providers of the middle, upper middle, upper and

elite class areas like selected areas in Navrangpura, Naranpura, Thaltej,

Gurukul, and S. G. Road, Vastrapura, Paldi and the like in Ahmedabad and

similarly in other cities like Bhavnagar, Rajkot, Baroda. The leaflets would

also offer some promotional discont of 15% on the total bill as the promotional

offer.



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Front side of leaflet: Back side of leaflet:

Advertisement in the Radio Station

The modern radio stations are quickly penetrating the entertainment industry.

These are source of entertainment for all from kids to elders in the family.

These would attract women while they are cooking or while they are doing

household chores, teenagers while driving cars and so on. This medium hasnow become an efficient source of advertising with its far reach.

The advertisements running in radio station, especially like Radio Mirchi,

Radio One, SFM and My FM in Gujarat, for Temptation restaurant would

inform the audience of the restaurant and these would invite them to come to

the restaurant and dine over here.


WELCOME TO temptation RestaurantA multi cuisine restaurant

COME AND EXPERIENCE THEDIFFERENCE

Product OFFERING

The offering would broadly include the following4 categories.

- Hygenine and Quality food

- Recuiting and training

- Live counters

- Customer is KING

COME AND EXPERIENCE THE

DIFFERENCE


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The other advertisements in radio stations of other states would also invite

orders from outside and expand the operations of Temptation.

Creating temptations Website

To attract a large number of target audiences temptation is planning to float a

website. This website would contain the content that is sufficient for the

clickers to educate them and also place orders through the website.

ENSURING WORD OF MOUTH FOR the

TEMPTATION RESTURANT

The most effective way of attracting potential customers at Temptation

Restaurant would be with the help ofWORD OF MOUTH.

This technique helps not only attracting the new customers but also helps in

retaining the most lucrative current customers for the Restaurant.

The word of mouth can be accomplished by providing quality services and

hospitality provided to the customers at Temptation Restaurant.

The market research would be conducted time to time to understand and

analyse the preferences of the customers and the Temptation Restaurant would

try and fulfil and even overdoing those expectations of the customers and

consumers making them satisfied and delighted with its services.

A satisfied or an overwhelmed (delighted) does not simply become a loyal

customer who would frequently come to restaurant but would also bring and

inform other such as relative and friends about the restaurant. It is seen that 1

satisfied customer brings at least 12 other customers.



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This method is a cheap source of attracting new customers though retaining

and satisfying the current customers sounds a bit costly.

PUBLICITY FOR TEMPTATION

RESTURANT

The publicity is the use of non-paid media messages to deliver brand

information designed to positively influence customers and prospects. Publicity

is a free tool to attract and influence the customers and prospects.

Temptation Restaurant during its inauguration that is initial stage and also at

later stage would go for publicity to attract and influence prospects and

customers as this source is the most renowned and people give their full

consent to such publicity.

For creating publicity of Temptation Restaurant would on a regular basis

conduct various events at restaurant such as various different Food Festivals

and Membership offers and so on.

The restaurant can provide free dinner package to its recurring customers. A

customer who comes in five or six times a month for dinner, after a couple

months of this, if the restaurant approached the person's table and says, "You're

such a good customer, today your dinner would be sponsor by the restaurant

only. This would create huge word of mouth publicity, the person who avail

the free food would tell 10 of his or her best friends about the amazing service

provided by the restaurant. This would help the restaurant to promote itself in

the market and with less expensive.



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Measure:

The restaurant need to keep track of how its advertising or marketing

department is working. It should measure the result by asking the customer

how they heard about the restaurant and thus it would help to know that how its

advertising or marketing tactics are working. The small restaurants do not have

that budget for ads and thus they cant block much of the capital for longer

times what they want is the quicker results.

Public Relation:

The restaurant should develop good personal relation with the local or national

media. The restaurant should develop a list of media which can impact

consumer opinion for the restaurants. The restaurant should maintain positive

relation with them which would help the restaurant in the long run.

Packaging:

The packaging of a product and or service is the appearance which creates first

impression in the mind of a potential customer has. In the restaurant industry it

is the menu, the staff uniforms and the interior decor. These are the packaging

for the restaurant.



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COMPETITIVE ANALYSIS

PRODUCT LIFE CYCLE

INTRODUCTION STAGE:



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The Temptation would not be having introduction stage as the industry have

pass this stage and is now in the Growth Stage. The industry is growing and

thus it is the best time for theTemptation Restaurant to enter.

GROWTH STAGE:

The Restaurant industry is now in the Growth stage. The Temptation would

directly enter in this stage as seen in the above figure. The restaurant would

take the maximum benefit in this stage.

MATURITY:

This is the stage in which the growth of the industry slows down. In this stage

Temptation Restaurant would diversify into other business which would again

start from the growth stage.

DECLINE:

The Temptation would close down it Restaurant and would focus on the new

business in which it had diversify

PORTERS FRAME WORK



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Porters five forces helps the company to understand both the strength of the

companys current competitive position, and the strength of a position that the

company is looking to move into, Porters five forces are as follow :

1. Suppliers Power

2. Buyers Power

3. Competitive Rivalry

4. Threat of Substitute

5. Threat of New Entrants

Porters five forces implications on Restaurant Industry:

Suppliers Power:



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Company is not at all affected by the suppliers because the suppliers for the

Temptation Restaurant are many. There are many suppliers in the market and

the raw materials required by the restaurant also does not needed and

specialization , it purchase its raw material from the market where there are

many suppliers. Company has to purchase the raw material of different

varieties. There are many option for the company to purchase the raw material

and the cost of switching is also very less. Thus the bargaining power of the

suppliers is less because of easily availability, general product and cost of

switching is very low.

Buyer Power:

The Temptation Restaurant would sell its product to the general people. The

Temptation Restaurant would have the more bargaining power because the

customer segment is very large, there are huge numbers of customers and the

Temptation Restaurant not only sells the food but also sells the experience with

it. Customers who approached to the restaurant come to that particular

restaurant once or twice thus they have less bargaining power.

Competitive Rivalry:

Temptation Restaurant is having many competitors in the market. In

Ahmadabad there is more than 200 Restaurant and it will receive competition

from each of them. It will mainly face the competition from the Restaurant

Flavours and newly opened Gloria because it the restaurant that provides a

new experience of having food. The Temptation will also face the competition

from other restaurants also who have already set a brand image in the eyes of

the people. All these restaurants are known for their ambience and the quality

of the food which they serve thus the Temptation would have to compete from

each of the restaurants. The Restaurant would also be facing an indirect



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competition from the unorganized sector. It would face the competition from

the local hawkers and stalls providing food.

Threat of Substitution:

Threat of Substitution is not a problem for the Temptation Restaurant. In

Ahmedabad all the restaurants are pack on Saturday and Sundays. The

restaurants do have any direct substitution but it have the indirect substitution.

In Ahmedabad there are not much places for freak out so people opt for going

out for dinner on Saturdays and Sundays thus if the city gets some good places

for that customers would look at hospitality and service provided by the

restaurants. Thus at present the Temptation Restaurant does not have threat of

substitution but in future it might have.

Threat of New Entrants:

Threat of new entrant is always there in the Restaurant business. There are

very less barriers for the new entrant to enter into the Restaurant Sector. The

investment requires starting a restaurant is less and it can also be establish in a

short span of time. There is no specific technology are know how is needed to

start the restaurant. The Brand Loyalty is very less in this sector because the

people always seeks for the new place and also wants to have different

varieties of food. Thus the threat of new entrants is always their in this

industry. The Hayate is also planning to open a Hotel in the Ahmedabad. Thus

any new comer can enter into the market and can create a lot of problem for

the company.



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Layout

The total area that would be required to be managed in different areas of

restaurant is shown in the figure below. Total area allocated for each activity of

restaurant that is required to be carried on also shown in the figure below:



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Front Office

They would be responsible for the activities related to the administration of the

Restaurant.

The qualification of the Restaurant Manager: Post Graduation/ Diploma in

Hotel Management & an experience of atleast 3 years in the Hospitality

Industry

Assistant Restaurant Manager would assist wherever the Manager would

require & his qualification would be the same but an experience of 1 year in the

Hospitality Industry.

Cashier would be responsible for all the dealings with the give and take of the

cash & would also do all the billings procedure.

Kitchen Department

The senior chef would act as a leader and would assist all the other members of

the department.

There would also be the captains would be responsible for all the workings of

the restaurant & they would be the assisting the chefs, cooks & the stewards.

The cooks would be an epicure &should have a complete knowledge of the

making of the same.

The stewards would be an attendant and also would act as an helping hand to

the cooks.

Food and Beverages Department



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There would be a F&B Manager who would only look after the F&B

Department.

The management of the banquet hall would also come under his shoulders.

While the stewards & the assistant stewards would have the same

responsibility as the Kitchen Department.

Purchase Department

There would be a store in charge would look after all the things in the store

room including the inventory.

The store register would also be maintained by him.

There would be a helper who would assist in the carriage of the stock from one

department to the other. Also he would assist the F&B Manager as and when

required.

The house keeping boys would take care of the stock remaining as the

inventory & would do all the activities that the Purchase Head tells him to do.

The guard would take care of the restaurant as a whole.



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COMPETITORS

ADVANTAGES,

DIS-ADVANTAGES &

BARRIERS



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COMPETITIVE ADVANTAGE

The Temptation Restaurant would focus on providing people a new and a

unique experience. The people are tired up by experiencing the same, and thus

it would very well serve the needs of the customer. People are now seeking a

place where they can get not only have food but can have also has some

entertainment and the Temptation would provide the same. The Restaurant is

unique in its application. It would also be different from other restaurant in

many ways which will provide it a competitive advantage over the other

Restaurant. The Temptation Restaurant would also get the competitive

advantage from is design. It would also have to face competition from other

restaurant which already have established themselves and have a great brand

name. Its unique design, different experience of having food would help it to

gain a competitive edge over the other restaurants. It would also be providing

a Tarot Card Reader which would tell the peoples fortune and would guide

them in making their life good. It would also have a Magician which would

add more value to its entertaining part.

The Temptation Restaurant would opt for penetration strategy; it has a huge

unorganized market. It can even target the customers which are opting for

stalls and hawkers food. The people are ready to compromise with their

hygiene factor but are not ready to compromise with the taste.



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Competitive DISADVANTAGE

The Temptation Restaurants disadvantage would be its lack of Brand

awareness among the people. It has to do lots of marketing for getting out of

this competitive disadvantage. The competitors are already in this field and

know the consumer behavior and thus it will a competitive disadvantage for

the Temptation Restaurant.

BARRIERS

There are very less barriers for the new entrant to enter into the Restaurant

Sector. The investment requires starting a restaurant is less and it can also be

establish in a short span of time. There is no specific technology are know

how is needed to start the restaurant. The Brand Loyalty is very less in this

sector because the people always seeks for the new place and also wants to

have different varieties of food. Thus the threat of new entrants is always

there in this industry. The Hayate is also planning to open a Hotel in the

Ahmadabad in the next year.



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OPERATIONAL

PLAN



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Prime Vendor Contracts Work

The Temptation Restaurant would enter into a contract with the vendors. It

would enter into the contract with distributors of vegetables. Like any other

contract it is a simple contract that distributor would obtain a high share of the

restaurant demand in exchange it would provide better quality product at a

reasonable price. It is a mutual agreement that is intended to benefit both the

parties. When negotiating a prime vendor contract, an operator needs to be

aware of the conditions that apply to the distributor in order to get the product

to the establishment. Distributors face challenges in delivering product that are

out of their control, such as weather, fuel costs, road conditions and routing

changes. Any part of these components can affect the costs of the products,

delivery dates or times, or possibly the amount of product that can be

delivered. Restaurateurs are always concerned about quality, freshness, prices

and availability of their products, but most importantly distributors should

always understand that service is paramount to retaining their customers'

satisfaction.

Recruiting

The restaurant would focus more on its recruiting procedures. It is important to

place the right people on the right job. The entire performance of the restaurant

service would be depended on the people it would hire. It would not appoint

the employees hastily but would invest the require time and effort to get the

right person. Good people may not always find you. Sometimes, you have to

find them. Filling out your service staff with people who can star in their roles

is the key to success. Some of the potential for good employees are mentioned

as under:

http://www.restaurantvoice.com/Better-Operations/prime_vendor_contracts.htmlhttp://www.restaurantvoice.com/Better-Operations/restaurant-recruiting-interview.htmlhttp://www.restaurantvoice.com/Better-Operations/prime_vendor_contracts.htmlhttp://www.restaurantvoice.com/Better-Operations/restaurant-recruiting-interview.html


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A potentially good Employee should be:

People orientated

Enthusiastic

Outgoing, and

Confident

People Orientated individuals would enjoy entertaining guests and orchestrating

everything, from a simple meal among friends, to an extravagant celebration.

On this stage the applause might not just come from the tip, but the appreciation

and gratitude guests express as they depart.

The employees should be outgoing and enthusiastic individuals. On this stage,

for them each night is a performance. Like actors, the cast play many roles and

wear many hats. In the same night, the cast act as informal hosts, masters of

ceremonies, food guides and salespersons.

Confidence is the result of many things. Star performers feel good about

themselves and their ability to perform their role well.

Restaurant Success by Maintaining

Continuity during Peak Business Hours

The restaurant would maintain the uniformity in its service. It is very difficult

to maintain the same service at the time of the peak hours but by providing

perfect training and guidelines same can be achieve. Every successful

restaurant operator knows and understands that continuity is what made them

successful. Continuity not only comes from the food and beverage that they

sell, it also comes from the service. Customers arrived at the restaurant to have



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TRAINING



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Training

Employees never just happen - it is the result of a conscious effort on the part

of the trainer and the trainee. Job training is the processes of helping an

employee acquire the necessary knowledge, skill, and work habits to perform a

specific job. Failure to help employees get started properly results in needless

expense, high levels of employee frustration, and increased turnover rates.

Planned training saves time and cost much less than letting people learn "the

hard way". It reduces waste. It helps to insure safe work habits. It reduces

employee frustration. It prevents the learning of incorrect work habits, which

will have to be unlearned later. It helps to insure guest satisfaction.

These are some points, which would aid in accomplishing task of training crew

members.

People learn best when fresh.

People learn best in a non-threatening climate.

People learn better when the purpose of the skill or task is known

People learn better when the "why's" are explained along with the "what's" and

"how's".

People learn faster when they are provided "feedback".

Employees never just happen - it is the result of a conscious effort on the part

of the trainer and the trainee.

Stress the "do's" rather than the "don'ts".

Work from the known to the unknown.

Don't talk a "foreign" language.

Break down complex tasks into basic tasks

Doing tasks are learned by doing.

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Staff members can help in Increase Revenue

Encouraging helpful suggestions:

Staff members should be given encouragement for giving ideas to help the

restaurant to improve. In order to progress the restaurant would be open to their

suggestions, be appreciative of their concerns, and would put into action ideas

that are plausible.

Bringing potential problems to attention:

Alert staff members would avoid most costly errors. It would create an

environment whereby the staffs believe their observations will be appreciated

and promptly acted upon by management. It would encourage people to step

forward with their observations, and restaurant would show sincere

appreciation when they do.

Participate in teamwork:

The Temptation Restaurant would make people work together as a team as

they can accomplish more in less time. This cuts labour costs. It would create

a culture of understanding among the employees.

Empower:

The Temptation Restaurant would provide empowerment to there employees.

It is not always possible for employees to go through the chain of command. A

few employees would fell comfortable in this position, while others may not.



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MISCELLANEOUS ISSUES



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Experience is the most important factor for success. Management skills,

courtesy and good manners, entrepreneurial ambition, willingness to work hard

and under pressure, attention to detail and effective controls are vital.



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Risk factor



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Risk factor

The reasons for sickness in the restaurant business:

Mismanagement

Insensitivity to external factors

Inability to update the business

Losing sight of the basics

The steps that can be adopted for successful turnaround can be listed as

follows:

By doing proper introspection and strategic analysis.

Doing a detailed survey of the prevailing business environment.

Analyzing the influence of the changes at the macro level on the business.

Writing down the business sales marketing and operations plans.

Meeting key personnel and employees.

Revising plans.

Having discussions with vendors and customers. Contacting the bank, tax authorities, and accountant.

Keeping only essential employees.

Cutting unnecessary cost.

By Renovating and Innovating.

Implementing plans.

By revising and reassessing.



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FINANCIAL PLAN



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Financial data

FINANCIAL ASSUMPTIONS

Food Sales

(125*180*5)+(125*200*2);Rs.125 is the APC, 180 &

200 is the capacity, 2 & 5 arethe number of days

5%-1st Year, 7% next 3years

Food Purchase 30% of Food Sales NIL

Income from Banquet Hall(50*300*120),50

guests,Rs300 APC, 120 daysin a year

5% growth every year

Food Costs on Banquet 30% of Income of Banquet NILTransportation Costs NIL 2% increase every year

Inventory MaintainenceCosts

NIL 5% increase every year

Sale Of Beverages NIL 5% increase every year

Income from banquet hall NIL 5% increase every year

Beverages Consumed NIL60% of sale of

beverages

Salaries NIL 5% increase every year

Staff Meal Expenses A/c NIL 5% increase every year

Telephone Expense NIL 2% increase every year

Stationary Expenses NIL 5% increase every year

Cleaning Agents NIL 5% increase every year

Gas NIL 5% increase every year

Interest on loan 12.75% per year NIL

Advt. & Promo. Expenses NIL10% increase every

year

Fire Fighting Expenses NIL 5% increase every year

Misc Expenses 1% of Total Costs NIL

Corporate Taxes 33% of Net Profit NILInterest on Capital 6.00% NIL

Dep on F&B 20.00% NIL

Dep on Kitchen equip 10.00% NIL

Dep on Electronic equip 40.00% NIL

Dep on Computer 60.00% NIL

Dep on Equip in res &banquet

10.00% NIL

Dep on Fire fighting equip 15.00% NIL

Dep on Furniture 10.00% NIL

Breakeven Point (per day) (VC+FC)/365 NILLease Rental NIL 10% increase every



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PROFIT AND LOSS ACCOUNT

2009 2010 2011 2012 2013

INCOME

Sales

Food Sales 78.00 81.90 87.63 93.77 100.33

Sale Of Beverages 7.00 7.35 7.72 8.10 8.51

Income from banquet hall 18.00 18.90 19.85 20.84 21.88

TOTAL SALES 103.00 108.15 115.20 122.71 130.72

Purchases

Food Purchase (30% of Food Sales)23.40 24.57 26.29 28.13 30.10

Transportation Cost 0.40 0.41 0.42 0.42 0.43

Food Costs on Banquet (30% ofB.Income )

5.40 5.67 5.95 6.25 6.56

Inventory Maintenance Cost 0.25 0.26 0.27 0.28 0.30

TOTAL PURCHASES 29.45 30.91 32.93 35.09 37.40

Gross Profit 73.55 77.24 82.26 87.62 93.32

INCOME FROM OTHER SOURCES

Interest on Deposits @8% 0.00 0.24 0.24 0.24 0.24

Income on Investment @ 8% 0.00 0.16 0.56 0.80 1.20

TOTAL INCOME 73.55 77.64 83.06 88.66 94.76

EXPENDITURE

Corporation Tax 0.08 0.08 0.08 0.08 0.08

Beverages Consumed 4.20 4.41 4.63 4.86 5.11

Salaries 23.88 25.07 26.33 27.64 29.03

Staff Meal Expenses 3.00 3.15 3.31 3.47 3.65

Electricity Expenses 3.00 3.00 3.00 3.00 3.00

Telephone Expense 0.50 0.51 0.52 0.53 0.54

Stationary Expenses 0.40 0.42 0.44 0.46 0.49

Cleaning Agents 0.18 0.19 0.20 0.21 0.22

Maintenance & Repairs 0.93 0.95 0.95 0.95 0.95

Gas 2.00 2.10 2.21 2.32 2.43

Newspaper Expenses 0.02 0.02 0.02 0.02 0.02

Decoration Expenses 0.65 0.65 0.65 0.65 0.65

Interest on loan (12.75%) 2.55 2.15 1.71 1.21 0.64

Trial Costs 0.12 0.00 0.00 0.00 0.00

Uniform Expenses 0.50 0.50 0.50 0.50 0.50

Advertisement & Promotional

Expenses

3.00 3.30 3.63 3.92 4.23

Fire Fighting A/c 0.16 0.17 0.18 0.19 0.20

Misc Expenses (1% of Total Cost) 0.70 0.72 0.74 0.76 0.78

Lease Rentals 13.20 14.52 15.97 17.57 19.33

Corporate Taxes @ 33% on TotalIncome

2.30 2.87 3.86 4.76 5.70

Discount (2% of total sales) 1.03 1.08 1.15 1.23 1.31


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BALANCE SHEET 2009 2010 2011 2012 2013

ASSETS

Food & BeveragesEquipment

0.66 0.52 0.42 0.34 0.27

Kitchen Equipment 6.65 5.99 5.39 4.85 4.37

Gas connections 2.09 2.09 2.09 2.09 2.09

Telephone connections 0.05 0.05 0.05 0.05 0.05

Computers 0.25 0.10 0.04 0.02 0.006

Furniture & Interiors 24.65 22.19 19.97 17.97 16.17

Electronic equipment 1.92 1.15 0.46 0.18 0.07

Equipment in restaurant andbanquets hall

2.67 2.40 2.16 1.94 1.95

Fire Fighting equipment 0.21 0.18 0.15 0.13 0.11

Current Assets

Inventory 2.00 1.84 1.50 1.15 1.24

F&B spares 2.50 2.50 2.15 2.10 1.95

Banquet Spares 1.10 1.60 1.42 1.16 1.05

Cash & Bank Bal 5.90 5.87 7.93 11.19 11.58Deposits - 3.00 3.00 3.00 3.00

Investments - 2.00 7.00 10.00 15.00

Other Current Assets 4.02 3.85 3.03 1.77 0.43

TOTAL ASSETS 54.68 55.33 56.77 57.94 59.14

LIABILITIES

Capital Account

Vatsal 15

Yesha 15 30.00 30.00 30.00 30.00 30.00

Net Profit 4.68 5.83 7.84 9.66 11.58

Loan from SBI 20.00 19.50 18.93 18.28 17.56



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Cleaning Agents 0.18 0.19 0.20 0.21 0.22

Maintenance & Repairs A/C 0.93 0.95 0.95 0.95 0.95

Gas A/c 2.00 2.10 2.21 2.32 2.43

Newspaper Expenses A/c 0.02 0.02 0.02 0.02 0.02Decoration Expenses A/c 0.65 0.65 0.65 0.65 0.65

Interest on loan (12.75%) 2.55 2.49 2.41 2.33 2.24

Trial Costs 0.12 0.00 0.00 0.00 0.00


Advertisement & PromotionalExpenses

3.00 3.30 3.63 3.92 4.23

Fire Fighting A/c 0.16 0.17 0.18 0.19 0.20


Lease Rentals 13.20 13.20 13.20 13.20 13.20

Corporate Taxes @ 4% 4.12 4.33 4.61 4.91 5.23Auditor's Fees 0.20 0.20 0.20 0.20 0.20

Depriciation

F&B Equipment 0.07 0.06 0.05 0.05 0.04


Computer 0.15 0.06 0.02 0.01 0.00

Electronic equipment 0.77 0.69 0.28 0.11 0.04

Equipment in restaurant andbanquets hall

0.27 0.24 0.22 0.19 0.18

fire fighting equipment 0.03 0.03 0.02 0.02 0.02Furniture 2.47 2.22 2.00 1.80 1.62

To Interest On Capital

Vatsal 0.90 0.90 0.90 0.90 0.90

Yesha 0.90 0.90 0.90 0.90 0.90

EBIT 5.56 8.10 12.46 16.70 21.07

(-)Taxes 2.30 2.87 3.86 4.76 5.70

EAT 3.26 5.22 8.60 11.94 15.37

(+)Depreciation 4.48 3.94 3.16 2.68 2.35

Cash Flow 7.73 9.16 11.76 14.63 17.71



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BREAKEVEN ANALYSIS

2009 2010 2011 2012 2013

Variable Cost

Beverages consumed 4.20 4.41 4.63 4.86 5.11


Fire Fighting A/c 0.16 0.17 0.18 0.19 0.20Maintenance & Repairs A/C 0.93 0.95 0.95 0.95 0.95

Food Purchase (30% of FoodSales) 23.40 0.22 0.22 0.23 0.23

Inventory Maintenance Cost 0.25 0.26 0.27 0.28 0.30

Gas A/c 2.00 2.10 2.21 2.32 2.43

Food Costs on Banquet (30%) 0.21 0.22 0.22 0.23 0.23

Total Variable Expenses 31.85 9.05 9.42 9.82 10.23

Fixed Costs

F&B Equipment 0.07 0.06 0.05 0.05 0.04

Computer 0.15 0.06 0.02 0.01 0.00


Equipment in restaurant andbanquets hall 0.27 0.24 0.22 0.19 0.18

fire fighting equipment 0.03 0.03 0.02 0.02 0.01

Furniture 2.47 2.22 2.00 1.80 1.62

Electronic Equipment 0.77 0.69 0.28 0.11 0.04

Newspaper 0.02 0.02 0.02 0.02 0.02

Decoration 0.65 0.65 0.65 0.65 0.65



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Trial Costs 0.12 0.00 0.00 0.00 0.00


Advertisement & PromotionalExpenses

3.00 3.30 3.63 3.92 4.23

Lease Rentals 13.20 13.20 13.20 13.20 13.20

Interest on loan (12.75%) 2.55 2.49 2.41 2.33 2.24

Auditor's Fees 0.20 0.20 0.20 0.20 0.20

Salaries 23.88 25.07 26.33 27.64 29.03

Transportation Cost 0.40 0.41 0.42 0.42 0.43

Staff Meal Expenses A/c 0.28 0.30 0.31 0.33 0.34

Electricity Expenses 3.00 3.00 3.00 3.00 3.00

Telephone Expense 0.50 0.51 0.52 0.53 0.54


Cleaning Agents 0.18 0.19 0.20 0.21 0.22

Total Fixed Costs 52.96 54.18 54.98 56.11 57.44

TOTAL COST (VC+FC) 84.81 87.58 90.47 93.83 97.54

BEP/Month (TC/12) 7.07 7.30 7.54 7.82 8.13

BEP/Day 0.23 0.24 0.25 0.26 0.27

LOAN AMORTIZATION

Year BeginningAmount

AnnualInst

Interest

Prin Rep Rem Bal

2009 20.00 5.65 2.55 3.10 16.90

2010 16.90 5.65 2.15 3.50 13.40

2011 13.40 5.65 1.71 3.94 9.46

2012 9.46 5.65 1.21 4.45 5.01

2013 5.01 5.65 0.64 5.01 0.00



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NET PRESENT VALUE AND IRR TABLE

Year Cash Flow PVF@10% PV

Initial invt -80.00 1.00 -80.00

2009 7.73 0.91 7.03

2010 9.16 0.83 7.57

2011 11.76 0.75 8.84

2012 14.63 0.68 9.99

2013 17.71 0.62 11.00

2014 13.5.80 0.56 76.65

(3% perpetuity

Growth) Cost of Equity=18%

NPV 41.09

IRR 20%



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The management is not able to fight with the competition.

The business is growing fast but the management is not competent enough

to sustain the growth.

Under any of the above mentioned condition it is in the best interest of the firm

to exit.

The firm might undertake the following routes of exiting:

The firm might sell the organization to a competitor or some other player

who is more competent and willing

The assets will be sold of and loan will be paid by taking money from either

family, friends or relatives or earning money from some other business.



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SOURCES OF

DATA

SOURCES OF DATA

CMIE

AIS

ISI Emerging Market



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EBSCO Database

EMRALD

Google.co.in

Indiastat.com

Research Publication

Secondary Data

www.restaurantvoice.com

Prasanna Chandra (7th edition)

www.smetoolkit.com

www.moneycontrol.com

Project on Hotel

Documents

Transcript of Project on Hotel