ENB218 Entrepreneurship In Business

As Spicy Treat restaurant is at the initial stage, it will be continued as a sole proprietorship in which owner will be the manager of the restaurant. As the owner has efficient skills in management as well as previous experience of running a small café, the decision of investments has been taken after analyzing the market conditions in detail manner. The owner is having efficient skill in assessing the external environment as well as internal environment so that

Product and services provided by new venture

The restaurant will provide offer breakfast along with lunch menu, fresh cold cuts, drinks and take-out ready dishes. Further, the items which will be included are omelettes, cereal, eggs, toast, yoghurt, coffee and as well as tea. In lunch the items which will be offered are cold cut sandwiches that are turkey, ham, roast, beef and so on along with this salads will be offered too such as Caesar salad, Greek salad, watercress and sesame salad, homemade potato salad, Italian eggplant salad, Maury island cranberry arctic salad. 

Menu of Restaurant

Breakfast

• Eggs, made to order.
• Toast: rye, wheat or white.
•  
• Yoghurt.
•  
• Coffee and Orange Juice

Drinks

• Ocean Spray products.
• Soft drinks (Pepsi products).
•  
• Tea

Lunch

Entrees

• Turkey Sub
• Roast Chicken Club.
• Veggie Sandwich.
• Coos Bay Hot Crab Sandwiches.
• Columbia Salmon Rolls.
• Anacortes Seafood Burgers.
• Smoked Salmon Sourdough Bread.
• Washington Bruschetta Steak Sandwiches.
• Hood River Fresh Apple Cake.
•  
• Homemade Organic Willamette Chili

Salads

• Watercress and Sesame Salad.
• Homemade Potato Salad.
• Italian Eggplant Salad.
• Maury Island Cranberry Arctic Salad

Market research

Marketplace: Old Street Station can be an appropriate marketplace for the Spicy Treat Restaurant as individuals who work in the downtown area through the day or who will be walking for walk-in good food and convenience for late breakfast and lunch. Moreover, in this area usually, the street food is easily available thus the risk of competition is comparatively less than other areas. If appropriate commercial accommodation is not available, then any other main market can be searched so that more no of customers can be influenced.

Market Segmentation: The main emphasis will be on other downtown traffic and local workers. The reason behind focusing on them is that they usually prefer restaurant food in comparison to other segments. Business people usually prefer a hotel rather than a restaurant and local workers are interested in spending time in the restaurant rather than a hotel. Thus, the targeted share has been emphasized mainly in order to attain the sustainability over a longer period. Thus, the main emphasis will be on the choice of local worker and other down traffic as they prefer food which is available at reasonable prices. Moreover, they are interested in getting food packed so that they can enjoy the same at home with their family. Thus, food delivery packages will be made available so that the quality and presence of food is not compromised.

Figure 1: Pie chart representing market segment on which the main emphasis will be focused

Marketing Strategies: In the present online world, social media plays a significant role in reaching to the targeted area. Thus, advertisement and promotion will be done on social sites such as Facebook, Twitter etc. in order to attract maximum customers. Moreover, exciting offers and a special discount will be provided at first service so that more no. of customers get attracted. Interacting with the customer is believed as a successful marketing strategy. In order to implement the same, a blog will be created for the restaurant. The purpose behind making the blog is to have communicated with the customers in an effective manner (Tuten and Solomon, 2017).

The restaurant can employ a panel of content writers who can make the blog attractive. With the help of this, the restaurant will not only draw the attention of more customers but also it will help in enhancing the brand image of the organization. Cummings and Angwin (2015) consider the blog as the best place where a restaurant can and share their views with people at large scale. Moreover, it is the platform where consumers can give their feedbacks and also it is the paramount significance for every organization to converse with consumers.

Competitors: Competitors have to be analyzed in detail prior to establishing any type of company or business (Medlin and Ellegaard, 2015). The company has to keep in mind strategies of the competitors of business, in order to develop marketing strategies and for taking other important decision relating to business. In London, there is intense of competition. The same includes every eating establishment in the Europe/Springfield area.  Main competitors are Taco time, Taco Bell, McDonald's, Burger King, Burrito Boy, La Salsa Taqueria, Subway Sandwiches, Cousins, Sun.  Due to the immense competition, every local competitor follows the loyal customer base (Kannan, 2017). The same will be followed by our restaurant too by providing appropriate services and delicious food to the customers.

Operational requirements

• Tangible Requirements: As per the assertions of DiPietro and DiPietro (2017), for running the business effectively the partners will be made, which are having adequate funds. Moreover, appropriate commercial accommodation will be rented.  The manager will help in managing the restaurant and their knowledge as well as experience will be beneficial for the restaurant. Apart from this in order to exercise the activities, there is a need to employ workers who are educated and well-mannered. Employees will be appointed after assessing each requirement in detail so that they remain part of the restaurant for a long period. Experienced employees should be preferred as the restaurant is new, thus experienced employees know the manner in which they have to behave with the customers and same can be used as a base for developing brand image of the restaurant.
• Intangible Requirements: In order to set up a restaurant computers are needed as in present digital era, as it plays a very important role since the can be done fast through the help of it and there are no chances of errors in work (Mullins, 2013). Further, every worker will need its personal computer, working in the department where it is necessary such as billing counter. Moreover to be available the mobile connectivity for all workers will require. With the assistance of same, the services can be provided speedily as well as information can be assessed easily, for example, tracing of the location where the food has to be delivered (Boella, 2017).
• Legal Requirements: For launching a new restaurant in London is necessary for an entrepreneur to register their restaurant before twenty-eight days of opening. If an entrepreneur not registers its restaurant then it will be considered as an offence according to the Article 6(2) of Regulation (EC) 852/2004 on the hygiene of foodstuffs. Further, in case, it requires a license for operating restaurant than same will also be attained before initiating business.

Cost and pricing strategy

The main objective of Spicy Treat restaurant is offering high quality as well as healthy food which is fast in cooking and has exclusive fair pricing.  Due to the same, the entrepreneur will be anticipating of charging more for the items in comparison to other stores on condition that the consumers understand that the food when is provided is better than average. Further, in order to satisfy the customers, the discount will be given on bulk order, family meals and combo provides in order to retain the average costing to sustain competition with famous brands. In order to be competitive the quality of food will never be compromised, customer will be provided the food with high quality and healthy.

Moreover, it the more emphasis will be done on satisfaction of customers there feedbacks will be taken and try to remove the grievance if any.  Reviews will be taken from customers in order to ascertain the extent to which they are satisfied and details about future requirements. At initial stage restaurant will require to compromise with profit to a small extent so that it can attain the sustainability. However, once the restaurant has developed its brand image it will be able to enhance the rate. As consumers will be sure about the concern of restaurant towards health of its customers, they will be loyal to the restaurant.

Financial forecasting

Figures of income, cash flow statement and balance sheet has been determined by considering London market and competitors values and invested amount. Further, growth % is applied by considering performance of new restaurants in the nearby market. Further, with the quality services business will be able to maintain the growth.

Table 1: Projected Income Statement

Projected income statement
For the initial three years
	0th Year	1st year	2nd year	3rd year
Total inflow		£       1,91,236.40	£    2,10,360.00	£    2,29,483.00
Fixed cost	£      39,000.00	£       1,91,975.00	£    1,96,769.00	£    1,98,607.00
Variable cost		£          14,023.95	£         4,000.74	£       13,413.62
Depreciation		£            2,700.00	£         2,700.00	£         2,700.00
Total cost	£      39,000.00	£       2,08,698.95	£    2,03,469.74	£    2,14,720.62
Profit		-£          17,462.55	£         6,890.26	£       14,762.38
Taxes		£            5,238.76	£         4,713.47	£         4,428.92
Net profits		-£          12,223.79	£         2,176.79	£       10,333.46

The above statement depicts increasing trend in sales of Spicy Treat Restaurant. It is expected that existing trends and preference of customer have been considered by the restaurant. Thus, same will have positive impact on sales of restaurant.  Profit has been earned in second year and moreover increasing sales trend signifies bright future of the restaurant.

Table 2: Projected cash flow statement

		Projected Cash flow statement
For the initial three years
	0th Year	1st year	2nd year	3rd year
Total inflow		191236.4	210360	229483
Fixed cost	£     39,000.00	£     191,975.00	£ 196,769.00	£ 198,607.00
Variable cost		£       14,023.95	£     4,000.74	£   13,413.62
Depreciation		£         2,700.00	£     2,700.00	£     2,700.00
Total cost	£     39,000.00	£     208,698.95	£ 203,469.74	£ 214,720.62
Profit		-£       17,462.55	£          6,890.26	£   14,762.38
Taxes		£         5,238.76	£     4,713.47	£     4,428.92
Net profits		-£       12,223.78	£          2,176.79	£   10,334.15
Add: Depreciation		£         2,700.00	£     2,700.00	£     2,700.00
Cash flow at end	-£ 39,000.00	-£         9,523.78	£     4,876.79	£   13,034.15

Table 3: Projected Balance Sheet

Projected Balance sheet
For the initial three years
Assets		1st year	2nd year	3rd year
Current and non -current assets
	Cash		£          4,876.79	£  13,034.15
	Inventory	£                15,000.00	£        20,000.00	£  30,000.00
	Plant and Equipment	£                17,300.00	£        14,600.00	£  11,900.00
	Furniture		£          9,200.00	£    9,200.00
Total Assets		£                32,300.00	£        48,676.79	£  64,134.15
				[42]
Liabilities and equity
	Bank overdraft	£                  9,523.78
	Trade payables	£                  5,000.00	£        16,500.00	£  23,800.00
Total Liabilities		£                14,523.78	£        16,500.00	£  23,800.00
	Amount invested	£                30,000.00	£        30,000.00	£  30,000.00
	Profit	-£                12,223.78	£          2,176.79	£  10,334.15
Total Equity		£                17,776.22	£        32,176.79	£  40,334.15
Total liability and equity		£                32,300.00	£        48,676.79	£  64,134.15

Statement of affairs represents that in initial year the restaurant is not having sufficient cash. However, the situation has been improved in future years. Further, with an increase in sales have also affected trade payables and receivables, i.e. same have been enhanced. Above statement represent that in initial year the restaurant does not have sufficient cash. However, in upcoming years as the company is operating with efficiency, it is able to manage its fund in an appropriate manner and is also having liquidity in order to meet its day to day expenditure. Profit has been assessed in year two, which represent that the food of the restaurant is liked by the customers.

Source of financing for business is done from owner investment and bank loan. For business, loans are very famous and common method of debt finance. Generally, businesses take loans from commercial lenders like as banks by retaining some security against the loan. Taking loans from commercial lender or banks are for a fixed span of time is convenient but businesses have to pay interest on the loan. Loans are in the form of the short, medium or long term; it depends on the economic requirement of business. Total required amount of finance is GBP30000.

Contingency plan/exit strategy

• Short Term: As the restaurant is rented than in case a circumstance does not remain in favour of business than the owner can shut down through vacating the office through accomplishing legal requirements.
• Long Term: In long-term restaurant can be sold to existing competitor and in order to attain maximum value financial and legal transparency should be proven so that potential buyer can have ease in ascertaining appropriate purchase value.

References

Boella, M. J. 2017. Human resource management in the hotel and catering industry. Taylor & Francis.

Cummings, S. &  Angwin, D., 2015. Strategy builder: How to create and communicate more effective strategies. John Wiley & Sons.

DiPietro, R., & DiPietro, R. 2017. Restaurant and foodservice research: A critical reflection behind and an optimistic look ahead. International Journal of Contemporary Hospitality Management, 29(4), 1203-1234.

Kannan, P.K., 2017. Digital marketing: A framework, review and research agenda. International Journal of Research in Marketing, 34(1), pp.22-45.

Medlin, C. J., & Ellegaard, C. 2015. Conceptualizing competition and rivalry in a networking business market. Industrial Marketing Management, 51, 131-140.

Mullins, J. 2013. The New Business Road Test: What entrepreneurs and executives should do before launching a lean start-up. Pearson UK.

Tuten, T.L. & Solomon, M.R., 2017. Social media marketing. Sage.