Feasibility Analysis For Starting A Restaurant Business In Mandurah WA Essay.

Financial feasibility study for a new business

Discuss about the Evolutionary Economics for Program and Scope.

This report has been prepared to analyze the feasibility of finance of a company. In this report, the feasibility of a new business has been analyzed in concern of finance. The business is related to the hospitality industry. In which a restaurant would be started. The main theme of the business would be offer a hygienic meal to the customers. This restaurant would be started at the city of Breakwater Parade, Mandurah WA 6210. This business has been chose after analyzing the market. Through the market, it has been analyzed that even in the recession period; people don’t stop to go to the normal range restaurants they only start ignoring the fancy restaurants (Mcleish, 2010). The restaurant has been set up in the middle of the city and the range of the restaurants is affordable by the company. The name of the restaurant would be “Himalayan Pub”.

Feasibility studies are required to be done by every business which is entering either into the new market or launching the new products into the market to analyze the market condition of the company (Lacalle, 2017). So that the best outcome could be getting from the market and the company would be able to achieve the goals and objectives from the market.

Financial feasibility is a study which depict about the financial performance of a new business into the market. Through this study, it has been found that the financial feasibility of a company relates to the total cost of the business, projected profitability and the cash flows, debt equity relation, existing investment through the venture capitalist, acute slowing or reduction of the sales (Kaufmann, 2012).

Financial feasibility study is essential for a business to analyze. For the business plan of “Himalayan Pub” the financial feasibility would help the company to analyze the various factors such as the related cost, projected profitability and the cash flows, debt equity relation, existing investment through the venture capitalist, acute slowing or reduction of the sales (Gaughan, 2010). The financial feasibility mainly focuses over the competitor’s financial performance, market condition and various other financial figures of the industry as well as the economy.

Mainly the financial feasibility offers the strength to the company to start the business and earn high revenue from the market though, there are various lose points of the financial feasibility are also there which makes it tough for the researcher or analyst to find the exact value of the financial terms from the market. Further, it has been found that the collected data is not reliable all the time. Mostly these data are collected by the analyst on the basis of the assumptions and various unrealistic market figures so the outcome of these financial feasibility do not provide a reliable result and it makes difficult for the business to survive into the market (Elmuti & Kathawala, 2000).

Analysis of general market characteristics for the restaurant industry in Australia

Feasibilities are totally depends over the market if various fluctuations are there into the market than it becomes difficult for the analyst to analyze the market and economical; condition for the business. If restaurant industry is taken into consider than there are huge competition in the market, thus the financial performance of a company depends over the various factors. In which the financial feasibility and other feasibility could not help the new business to identify the better result of the market and the business.

Himalayan Pub’s feasibility analysis has been done to identify the future performance of the company and the profitability and stability of the company. The financial feasibility and various other feasibilities of the company depict that the company would perform well in the market and make high profit from the market. This would take place due to the location and the strategy of the company and the pricing strategy of the comapny would help the company to grab more market (Du and Girma, 2009).

It has been found through the feasibility analysis that the restaurant would start up at the area where the restaurants are few in the place and target market range would be higher. Company would use the penetration pricing strategy to enhance the profit and grab more market share. Through the financial feasibility over the new start up which is “Himalayan Pub”, it has been evaluated that it would be easy for the company to grab the market share and make loyal customer. Through the feasibility, it has been found that it would take some time to the company to analyze the market and enhance the sales of the company.

The start up is related to the restaurant industry. This would be open at the Breakwater Parade, Mandurah WA 6210. The current market condition of Australia depict that the market position and the economy position of the company is becoming better after the global financial crisis. The condition of the restaurant industry of the Australia is quite better right now and various franchises have been opened in the Australian market right now to grab more market share.

Through the market analysis, it has been analyzed that market of the Australia and the industry of restaurant is of open nature in which the entry and the exits stage is quite easy and thus it would be easy for the restaurant to enter into the market and exist from the market would also be easy for the company (Dotson & Hyatt, 2005). through the market trend, it has been analyzed that normal range restaurants would last for the long time into the Australian market due to the government regulations and the different trend in the society. According to the study over the industry data, it has been found that the place where the restaurant would be start up is a better place to target all the citizens easily.

Site evaluation of a startup in Mandurah WA

Further, it has been analyzed that the current economy condition of the Australian market is of free nature. Free market economy is the economy in which individuals are allowed to have all the resource at theory own. The government has also not implemented various complex regulations over the industry. Government do not force the company to become more significant although it is expected by the company that company would not affect the environment and the CSR policies of the company must also be good. The government has allowed the companies to open the private owned business as well in which interference of the government would be lesser.

Site evaluation is a study in which the location and the site of the startup are analyzed on the basis of the market analysis and the feasibility of the company. Through the analysis, it has been found that the best place for opening the start up is the Breakwater Parade, Mandurah WA 6210. According to the analysis over the market, it has been found that the Mandurrah is the hub of the youngster where the start up is planned (Dopfer, 2012). Through this analysis, it has also been evaluated that it would be easy for the company to target the youngsters’ people for the fast food and the meal. Further, it has also been evaluated that further suppliers are available nearby the restaurant so it would be easy for the company to buy the materials whenever required. Through this, the warehouse charges of the company could also be saved.

In addition, it has been found that few competitors are there in the market but they all are following the traditional technique of the cooking and thus the taste of all the restaurants are almost similar. “Himalayan Pub” would offer them the food which would be cooked through using the modern technology and thus the taste of the food would be different and way better than other restaurant and through it, it would be easier for the company to grab more market (Dean & Yunus, 2001). The site evaluation of the company finally conclude that it is a better choice of the company to set up the restaurant at this place as this would help them to recognize and analyze more market share and the opportunities level would also be higher there that would helped the company to achieve the goals and the objectives. 

Supply and demand for restaurant industry

Supply and demand is a main factor for every company to analyze; supply and demand of a company mainly depends over the market position, customer’s behavior and the capacity of the company (Cravens & Piercy, 2006). Through the analysis, it has been found that it is easier for everyone to analyze the market and grab the opportunity from the market. Supply and demand helps the company to make various decisions through the professionalism and in a better manner. Through the study, it has been found that the supply and demand make an impact over the performance of the company.

The supply and demand analysis has been done over the company to analyze the performance of the company and the capacity and customer’s behavior and various other factors of the company. Through this analysis, it has been found that the performance and position of the company has become better and thus now the supply is done by the company according to the demand (Dallas, 2011). Through the feasibility analysis over the demand and supply of the company which has been analyzed and at initial stage, the demand of the meals and fast food range of the company was lesser due to various factors but after a period of time, demand of the products and services has been enhanced due to various promotional techniques and advertising of the company.

Further, it has also been found that the current demand as well as supply has been enhanced by the company due to various new strategies and policies. The demand of the company’s product would be higher day by day. The performance of the company would be better in near future.  Thus through this study it has been found that the company would earn high profits from the market in the future the demand of the company’s products would be higher (Elmuti & Kathawala, 2001).

Lastly, a study has been done over the financial analysis of the company to analyze the stability and the performance of the company. Through the feasibility analysis, it has been found that the performance of the company would be better in near future.  Thus through this study it has been found that the company would earn high profits from the market in the future the demand of the company’s products would be higher (FIRER et al., 2012).

Financial feasibility of the company has been analyzed through conducting the profit and loss account, balance sheet, cash flow analysis, ratio analysis and the break even analysis. Through the profit and loss account of the company, it has been analyzed that the total sale of the company would vary in every month sue to the timing which will take by the company to grab the opportunities and more market. The sales of the company would be 5500 units, 6750 units and 8513 units of the meal in Jan, Feb and March of 2018. Further it has been analyzed that the net income of the company would be 5370, 6570 and $ 8298 in the receptive months. The net profit of the company would be $ 1670, $ 3705 and $ 6645 in Jan, Feb and March of 2018 (Blundell & Dias, 2009).

The ratios study depict that the gross margin of the company would be 64.61% in Jan, 62.32% in Feb and 62.71% in March. Further, the net margin of the company depict that the performance of the company would be better in March with the 35.45% of total net profit.

In addition, the feasibility has been analyzed through analyzing the Balance sheet of the company (Fournier & Lee, 2009). It has been analyzed through this study that how well the company would perform in near future from the first day of the trade. Through this analysis, it has been found that the current assets of the company are $ 4425, $ 11475 and $ 370000 whereas the total assets of the comapny are $ 4975, $ 12475 and $ 38750 in Jan, Feb and March. The total liabilities of the company depict that the debt position of the company is bit lower. Company would take the bank loan to manage the finance. The shareholder equity of the firm is 2845, $ 5950 and $ 31970.

Lastly the study of cash flow and the break even analysis depict that the performance and position of the company has became better in the market due to various change into the operations of the company in three months. The sales of the company would be enhanced as well the expenditure of the company would also be raised according t o the performance of the company. the study of break even analysis depict that company is required to sell at least $ 20,225.8 worth of the meals to reach over the breakeven point. At this point, the revenue and the expenses of the company would be at the point where the loss and profit of the company would be nil (Fulin, 2011).

Through this analysis, it has been found that the financial feasibility of the restaurant depict about the better future and good performance of the restaurant. On the basis of the financial feasibility, it is recommended to the company to start this business.

Conclusion:

To conclude, various analysis and research has been one to evaluate the performance and future prediction about the “Himalayan Pub”. Through the feasibility analysis, it has been found that the restaurant would start up at the area where the restaurants are few in the place and target market range would be higher. Company would use the penetration pricing strategy to enhance the profit and grab more market share. Through the financial feasibility over the new start up which is “Himalayan Pub”, it has been evaluated that it would be easy for the company to grab the market share and make loyal customer.

The site evaluation of the company finally conclude that it is a better choice of the company to set up the restaurant at this place as this would help them to recognize and analyze more market share and the opportunities level would also be higher there that would helped the company to achieve the goals and the objectives. Through the study of the demand and supply, it has been found that the company would earn high profits from the market in the future the demand of the company’s products would be higher.

Through the analysis, it has been found that the financial feasibility of the restaurant depict about the better future and good performance of the restaurant. On the basis of the financial feasibility, it is recommended to the company to start this business.

References:

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