HOW TO CREATIVELY STARTUP A RESTAURANT BUSINESS PLAN

www.justwebresearch.blogspot.com  public by Just-web Research Institute [8thMay, 2020]

HOW TO CREATIVELY STARTUP A RESTAURANT BUSINESS PLAN

Deedenwii, Bariture N.

(ND, D.CL)

 EXECUTIVE SUMMARY

Chigo’s Eateries is a modern owned fast food outlet that will be positioned as an international franchise through our creative approach to the company's image and detail presentation. Chigo’s Family Eateries will provide a combination of excellent food at value pricing, with fun packaging and atmosphere. Chigo’s Family Eateries is the answer to an increasing demand for snack-type fast food, to be consumed while window shopping and walking around inside a shopping mall. In today's highly competitive environment, it is becoming increasingly difficult to differentiate one fast food outlet from another. Our main priority is to establish one outlet in a crowded mall, preferably in one of prominent shopping malls in Port Harcourt, Rivers State. Later, our effort will be a further development of more retail outlets in the surrounding area.

This plan is prepared to obtain a location for the initial launch of this concept. Additional financing will need to be secured for the two subsequent outlets, anticipated in month 13 and early in year three. The financing, in addition to the capital contributions from shareholders, will allow Chigo’s Family Eateries to successfully open and expand through year two. The initial capital investment will allow Chigo’s Family Eateries to provide its customers with a value-driven, entertaining experience through the creativity of its founders. Chigo’s Family Eateries will entice youngsters to bring their friends and family with our innovative environment, fresh-cut Belgian fries, and selection of unique signature dipping sauces.

Mission and Vision

Our main goal is to be one of the most successful fast food outlets in Port Harcourt, starting with one retail outlet located inside a major shopping mall as a "market tester." Chigo’s Family Eateries will strive to be a premier local fast food brand in the local marketplace. We want our customers to have the total experience when visiting our outlet(s) and website as they will learn about this fascinating new "pop culture." We will sell merchandise from pre-packaged sauces and t-shirts, to potato cutters, all with our official brand attached to them. Our main focus will be serving high-quality food at a great value.

Keys to Success

To succeed in this business we must:

v  Create a unique, innovative, entertaining menu that will differentiate us from the rest of the competition.

v  Control costs at all times, in all areas and implement a conservative approach to growth policy. Although, we provide more than enough fund to open more than one outlet, we want to be on the safe side of the business.

v  Sell the products that are of the highest quality, as well as keeping the customers happy with all of our product categories from food to store merchandising.

v  Provide 100% satisfaction to our customers and maintaining the level of excellent services among other competitors.

v  Encourage the two most important values in fast food business: brand and image, as these two ingredients are a couple of main drivers in marketing communications.

v  Get access to high-traffic shopping malls near the target market.

v  Promote good values of company culture and business philosophy.

Company Summary

Chigo’s Family Eateries is a fast food with a choice of sauce. We use the concept of Nigeria Foods, where the fries are all made from fresh potatoes, and all Nigeria Native foods. Our outlet also provides excellent and friendly customer service to support the environment of fun, energetic and youthful lifestyle. 

Company Ownership

Chigo’s Family Eateries is a privately held company. The business is owned by Miss Orji, Ihuoma Chigor. She is an entrepreneur that has been in the restaurant fast food business for years.

Start-up Summary

The retail outlet will be rented at one of the target location shopping malls. Our preference is Space A, for the main reason of reaching larger traffic. Start-up requirements will be financed through owner investments.

Start-Up Requirements
Start-up Expenses
Kitchen and Fixtures	N21,600
Furniture and Interior	N 16,500
Legal	N 3,000
Rent	N 15,000
Packaging and Stationary	N 8,500
Contingencies	N 4,200
Total Start-Up Expenses	N 68,800
Start-up Assets
Cash Required	N 50,000
Other Current Assets	N 0
Long-term Assets	N 0
Total Assets	N 50,000
Total Requirements	N 118,800

Company Locations and Facilities

Chigo’s Family Eateries locations will range in size from 50-70 meter square and will seat from 25-50 guests. Our first location will be on the larger end of this range in Shell Residential Area, Port Harcourt Rivers state. The location will feature its own originality in merchandise display and other brand building attributes. We will equip the outlet with modern furniture and aim for cleanliness and an open feeling. We are currently looking at several possible sites in shopping malls along Orchard Road.

Products

We want to focus only on selling fries. Alcoholic drinks will not be sold in our outlet, as Chigo’s Family Eateries promotes a healthy and positive Nigeria lifestyle. Instead. In promoting the Chigo’s Family Eateries lifestyle, we will offer various merchandise with our logo and colors, from hats to t-shirts to potato cutters to our signature sauces, so that our customers can enjoy Chigo’s Family Eateries at home. Our signature sauce is exclusively manufactured by Nigeria Company. They can be also purchased at selected retailers.

Sourcing

Food items will be delivered weekly by our distributor. We also have an agreement with some food Company to exclusively manufacture our signature sauces, and all of our merchandise will be printed and produced by our partner's office in Port Harcourt.

Future Products

For now, we will focus on selling foods sauces. However, as we grow further, we will add new categories to our menu. In the future, our growth strategy will be offering the franchise of our brand to food entrepreneurs in the region.

Market Analysis Summary

Consumer expenditures for fast food in Port Harcourt rose during the end of the year 2000, followed by the recovery of State Economy. The increasing number of new establishments such as fast food franchises, fancy restaurants and bakeries around Port Harcourt has shown a significant growth in this sector. Food spending is around 56% of total consumer expenditures in Port Harcourt, and consumer spending on leisure and recreation made up of 13% of total consumer spending. A much broader appeal exists for weekend slots because those are the days when most of our core target market enjoys the mall going activities.

Target Market Segment Strategy

Chigo’s Family Eateries intends to cater to the bulk of teenagers and youngsters in Port Harcourt. We have chosen this group for several important reasons. It is our goal to be "the extraordinary fast food place" and we believe that the age group from 25 to 50 is the primary age where brand building efforts could take place. They are on limited or fixed incomes and seek a value/price relationship that will not stretch their budgets.

Our secondary target is between the ages of 25 and 37, which are a heavy lounge/restaurant user group. They are more flexible in budgets and seek more than a value/price relationship. Our lunch strategy is dual purposed. First, we are featuring fresh fries to fill Port Harcourt craving for fast food as most ideas of lunch is a quick bite not a heavy meal.

Industry Analysis

Despite the prolonged effects of the Economic Crisis followed by political turmoil up to mid 2001, Rivers state foods. Much of this growth was contributed by the cafes/bars, fast food, and food retail sectors, whose wide appeal amongst a young population, for whom time is of a premium, led to high levels of growth. This growth is underpinned by market demand and lifestyle changes, such as seeing eating out as part of trendy lifestyle.

Entry of major multi-national food service operators into major shopping destination in the late 1980s until the 1990s led to growth in competition in the marketplace, mainly from fast food chains. This stimulated the rise in the number of fast food units, both of international and local chains, that started in the early 1990s. Although there was a slowdown during the economic crisis in 1998, the food service industry recovered faster than others, particularly during 2000 and 2001. Recent bombing tragedies have also proven that negative effects on this sector are moderately short-term.

Trends in Food Service Retail

According to government surveys, spending on "eating out" is continuing to increase. Spending on cooked food as a percentage of total average food-spend reached 55% in 1998. The growth in spending in the food service sector arises from a number of factors:

·         Increased affluence amongst Singaporeans, especially those under the age of 40 years.

·         Increases in the number of expatriate residents, which has more than doubled since 1988.

When they want convenient cooked food, Nigerians have long turned to the local hawker stalls, rather than prepared ready-to-cook or ready-to-eat processed convenience foods. As the numbers and variety of food service outlets has increased in Port Harcourt, locals have adopted the convenient products of other food service outlets, especially the fast food outlets, as alternative sources of convenient cooked food. Younger middle and upper income group families and individuals are also frequent users of the full service restaurants, modern-style coffee shops and cafés that now exist all across Port Harcourt.

Over the past 5 years, there has been a general upgrading in the food service sector which has seen the establishment of more air conditioned food centers (food courts) that are considerably cleaner than the traditional hawker markets. At the same time, increased investment from foreign and local businesses in the sector has also produced an increase in the numbers of:

Main Competitors

The competitors are about 2 (Kilimanjaro Fast Food and Mr. Biggs Fast Food) restaurants along Shell residential area.

Strategy and Implementation Summary

At first, we will open one outlet inside the Shopping Centre. This will become our "market testing area," and as we go further, Chigo’s Family Eateries is planning to open another in nearby shopping malls. In attracting customers to try our foods, we will provide a see-through kitchen, so that people will see how we are committed to freshness in our products. The kitchen will also let out an aroma of our freshly fried foods into the surroundings area, so that people will come and try our products.

Competitive Edge

v  Our unique dipping sauces blend local taste and international into one fusion recipe for the signature sauce.

v  Enthusiastic and friendly staff

v  Supporting merchandise items that support company's brand building.

v  Our fries are made of 100% fresh potatoes, unlike the frozen fries used by competitors.

v  Innovative packaging will position us at the same level with foreign fast food franchises.

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Marketing Strategy

Our strategy is based on serving our markets well. We will start our first outlet as a "market tester" that could become a model of the expanding number of outlets in the future. Concentration will be on maintaining quality and establishing a strong identity in the local market. A combination of local media and local store marketing programs will be utilized at each location. Local store marketing is most effective, followed by print ad. As soon as a concentration of stores is established in a market, then broader media will be explored. We believe, however, that the best form of advertising is still "buzz." By providing a fun and energetic environment, with unbeatable quality at an acceptable price in a clean and friendly outlet, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan. We will actively build our brand, through the selling of supporting materials, such as merchandise, promotional items and other marketing gimmicks similar to those of other fast food franchises.

Pricing Strategy

Our pricing strategy is positioned as "generic", meaning that N400 is the average consumer spending for a snack or light lunch in Port Harcourt. Leveraging the volume of foods, and signature style sauces to be sold, we are serving the majority of Nigerians.

Marketing Programs

We will deploy three different marketing tactics to increase customer awareness of Chigo’s Family Eateries. Our most important tactic will be "word-of-mouth" and in-store marketing. This will be by far the cheapest and most effective of our marketing programs because of the high traffic in targeted shopping locations.

The second tactic will be local store marketing. These will be low-budget plans that will provide community support and awareness of our facility. The last marketing effort will be utilizing local media. Although, this will be the most costly, this tactic will be used sparingly as a supplement where necessary. 

Sales Strategy

The sales strategy is to build and open new locations in order to increase revenue. However, this plan will be implemented when the one "market tester" outlet showed potential growth. As each individual location will continue to build its local customer base over the first three years of operation, the goal of each store is N104,250 in annual sales, with the original flagship store expected to earn almost N200,000 per year.

Management Summary

The initial management team depends on the founders themselves, with little back-up. As we grow, we will take on additional help in certain key areas. Part of our basic philosophy will be able to run our executive management as a "knowledge sharing" fellowship. We will not add additional overhead until absolutely necessary. This will mean that the initial staff support team will have to work extra. By doing this, we will keep our overhead as low as possible, allowing us to adequately staff our outlets. This will also allow us and future business partners to recoup investments as quickly as possible and enjoy a higher return.

Management Team

Chigo’s Family Eateries is currently the creative idea of its four founders. As the company is small in nature, it only requires a simple organizational structure. Implementation of this organization form calls for all four individuals to make all major management decisions in addition to monitoring all other business activities. As we expand into multiple locations, each location will have a primary site manager.

Organizational Structure

Future organizational structure will include a director of store operations when the store locations exceed four units. We hope that this individual will come out of the ranks of our stores’ management. This will provide a supervisory level between the executive level and the store management level. Current plan is to have our accounting and payroll functions done by an in-house bookkeeping. Possible positions might be added at a later date include marketing manager, purchasing manager, controller, human resources, R&D and administrative support team.

PERSONNEL PLAN
	YEAR 1	YEAR 2	YEAR 3
Site Managers	N0	N 60,000	N 96,000
Cashiers	N 36,000	N 80,000	N 144,400
Cook	N 28,800	N 66,000	N 115,200
Busboy	N 23,400	N 56,000	N 94,000
TOTAL PEOPLE	12	26	40
Total Payroll	N 88,200	N 262,000	N 449,600

FINANCIAL PLAN

The company is now privately held by Miss Orji Ihuoma Chigor. Future shares will be offered after two consecutive years of operating in Nigeria.

START-UP FUNDING

Currently, the company is owned by the original 1 founder, who will contribute N200,000 for the same amount of share, 25%. This will more than cover start-up requirements, and provide the business with a cash cushion to use for expansion over the first three years.

START-UP FUNDING
Start-up Expenses to Fund	N 68,800
Start-up Assets to Fund	N 50,000
Total Funding Required	N 118,800
Assets
Non-cash Assets from Start-up	N 30,000
Cash Requirements from Start-up	N 50,000
Additional Cash Raised	N 681,200
Cash Balance on Starting Date	N 731,200
TOTAL ASSETS	N 761,200
TOTAL LIABILITIES	N 0
Capital
Planned Investment
Eric Yam	N 200,000
Martin Ng	N 200,000
David Lu	N 200,000
Sagita Suwandi	N 200,000
Additional Investment Requirement	N 0
TOTAL PLANNED INVESTMENT	N 800,000
Loss at Start-up (Start-up Expenses)	(N 68,800)
TOTAL CAPITAL	N 731,200
TOTAL CAPITAL AND LIABILITIES	N 731,200
Total Funding	N 800,000

PROJECTED BALANCE SHEET

Chigo’s Family Eateries projected company balance sheet follows. We expect to run at a loss for the first two years, decreasing our net worth slightly. As the operation becomes more profitable in the third year, our net worth rises again.

PRO FORMA BALANCE SHEET
	YEAR 1	YEAR 2	YEAR 3
Assets
Current Assets
Cash	N 677,899	N 543,981	N 611,748
Other Current Assets	N 0	N 0	N 0
TOTAL CURRENT ASSETS	N 677,899	N 543,981	N 611,748
Long-term Assets
Long-term Assets	N 0	N 0	N 0
Accumulated Depreciation	N 0	N 0	N 0
TOTAL LONG-TERM ASSETS	N 0	N 0	N 0
TOTAL ASSETS	N 677,899	$543,981	$611,748
Liabilities and Capital	Year 1	Year 2	Year 3
Current Liabilities
Accounts Payable	N 29,242	N 35,911	N 50,452
Current Borrowing	N 0	N 0	N 0
Other Current Liabilities	N 0	N 0	N 0
Subtotal Current Liabilities	N 29,242	N 35,911	N 50,452
Long-term Liabilities	N 0	N 0	N 0
Total Liabilities	N 29,242	N 35,911	N 50,452
Paid-in Capital	N 800,000	N 800,000	N 800,000
Retained Earnings	(N 68,800)	(N 151,343)	(N 291,930)
Earnings	(N 82,543)	(N 140,587)	N 53,226
Total Capital	N 648,657	N 508,070	N 561,296
Total Liabilities And Capital	N 677,899	N 543,981	N 611,748
Net Worth	N 648,657	N 508,070	N 561,296