Start-Up Restaurant And Potential Risks

Discuss about the Start-Up Restaurant And Potential Risks.

Business and its success depend largely on how well the business is planned. This assignment highlights the business of a chosen start-up restaurant that is to be launched with adequate funding and sufficient time. In this assignment, the organization is described, along with the size of the organization, the industry it operates in as well as operational country. The organizational structure that is best suitable for the start-up business has been highlighted in this assignment. The various internal and external forces that affect the business has been analysed, along with the potential risks and its analysis. The various business practices that enhance the organizational performances have been described, along with the most important functions and its relation with the organizational performances.       

The start-up business that is being launched is a start up restaurant. The business operates in the food industry. The start-up restaurant will mainly cater Indian food and operate mainly in Australia. Initially, the business will operate in Sydney and Brisbane in Australia. To start with, the restaurant will be located in places of tourist interest, to attract customers. With the expansion in business, 5 other outlets are to be launched in various other parts of Australia. The size of the organization is small (Abel & Obeten, 2015). To start with, there will be 50 employees, with 5 main chefs, few assistants and helpers, waiters, accountants, manager, inventory manager, overall business manager of both the outlets. The two locations have been chosen since these are the two most popular destinations of Australia and thousands of people come down to these destinations from all over the world.

Since it is a start-up business hence, it will take time for the business to flourish. The strategy that the start-up business adopts includes in-depth market research and identifying the target customers and their demands (Chen & Elston, 2013). Once the target market and the demands of the customers are analysed, various promotional strategies are to be adopted. Being a start-up company, the restaurant needs high promotions. Hoardings, leaflets, advertisements using social media and television could be used effectively. The vision of the start-up restaurant is to serve high quality Indian food to the people of Australia as well as the tourists from all-over the world coming to Sydney and Australia. The restaurant also aims at giving an exclusive Indian experience with Indian food and culture to the people of Sydney and Brisbane.       

Organizational structure

The organizational structure highlights the way the employees are placed according to their designations and responsibilities (Verghese et al., 2015). For the start-up restaurant business, the flat organizational structure is the most appropriate one than the hierarchical or the tall structure. This is because in the flat organizational structure there are very few levels between the managers and the employees. Moreover, the flow of communication as well as ideas is smoother in the flat organizational structure. For small organizations, the tall organizational structure makes it difficult for the employees to communicate their ideas with the higher authorities (Verghese et al., 2015). In a start-up business, each level of the employee has to communicate with each other, such that the issues and concerns could be shared with each other.      

Various internal and external forces affect the start up business of the restaurant. A SWOT analysis has been carried out to highlight the internal forces that affect the business and PESTEL analysis has been carried out to analyse the external forces.

Strengths ·         Ability to cater to the needs of the customers ·         Launch of the new idea of Indian restaurant in Australia ·         Location of tourist interest ·         Outdoor catering services (Chen & Elston, 2013) ·         Innovation	Weaknesses ·         Lack of enough fund ·         High competition ·         Low profit ·         Lack of enough trained employees ·         All items listed in the menu is not available initially
Opportunities ·         Few competitors of Indian restaurant in Australia ·         One of its kind ·         Attracting new customers with a completely Indian experience ·         Since the Australians are culturally rich, hence cultural elements of India are also highlighted ·         Authentic Indian food	Threats ·         Lack of acceptance of the local people ·         Lack of availability of the Indian spices and vegetables ·         High competition from the other restuatants

Factors	Description
Political	The political factors include the political stability of Australia which helps in the development of new business.
Economic	The economy of Australia is stable and the Australian dollar has a high exchange rate in the world market. Hence, the stability in the economy is essential for the development of new start-up firms (Chen & Elston, 2013).
Social	The social factors include the changes in the lifestyle of the people, where they want to explore the food of various countries. Thus, the social factor is favourable for the start-up business of restaurant.
Technological	The required technology such as online ordering and delivery is available (Hartmann et al., 2014)
Environmental	The start up business has to ensure that it does not cause any environmental pollution. Water and energy conservation has to be given importance as well.
Legal	The business legislature has to be followed by the restaurant, with proper licence being obtained.

The start-up restaurant business could face potential risks. These risks are as follows:

1. Financial risk

This risk refers to the lack of adequate funding in order to run the business effectively. This risk is likely to occur, if the cost of building the restaurant or setting the infrastructure is more than the amount estimated (Luo & Stark, 2014). Moreover, bankruptcy of the investor might also trigger this type of risk.   

2. Operational risk

The operational risks include the operational decisions taken, that might prove to be a risky one. For example, relying on a particular supplier, for the supply of all the goods, might prove to be operationally risky. Failure of the supplier will result in huge operational risk.   

3. Market risk

The risk in the market includes sudden inflation of recession. The instability in the market will result in market risk of the start-up restaurant (Abel & Obeten, 2015).   

4. Work force risk

Since the restaurant is a start-up hence lack of efficient employees is a major issue. If the selected employees fail to serve the restaurant as efficiently as expected, then the restaurant and its operations will be at risk.   

5. Unforeseen risk

Sudden disasters such as fire or cyclone might destroy the whole business of the start-up restaurant. These are unpredictable and unforeseen.

Business practices to enhance the organizational performances

            The business practices that will enhance the organizational performances are as follows:

1. Clarity in the role

The clarity in the role of the employee regarding the job they are assigned has a key role to play in enhancing the organizational performances. If the employees have a clear idea regarding their role, then the restaurant will be able to operate effectively, along with enhancing the organizational performances.

2. Identifying the training needs of the employees

Internal and external forces

It is important to identify the training needs of the employees. Since the restaurant is a start-up, hence most of the employees might need training of effectively setting up the business. The training requirements of the chef, is much different from that of the manager. Hence, individual training needs are to be identified.  

3. Effective communication

Clarity in communication among the employees will ensure that effective communication is done. This will eliminate the chances of misunderstanding, thus enhancing the overall performances (Abel & Obeten, 2015). 

4. Efficient supply chain management

The  supply chain management has to be effective, in order to ensure that the restaurant works properly. If there is delay in the supply of the raw materials, then the entire operational chain will be delayed (Luo & Stark, 2014).  

5. CSR activities

The restaurant has to initiate CSR activities, in order to establish its brand image and attract more customers (Hartmann et al., 2014). 

Important functions and its relation with the performance

1. Procurement of fresh raw materials

The raw materials needed for the restaurant has to be fresh. Organic raw material should be used and genetically modified crops should be avoided. If the raw materials itself are not fresh, then the food cooked will not be good as well (Khan, 2014).

2. Maintenance of hygiene

For a restaurant, it is essential that hygiene is maintained. The chefs and the other employees should maintain their personal hygiene as well as clean the raw materials well, to make them free from germs and pesticides.

3. Fulfilling the demand of the customers

The restaurant has to meet the demands of the customers, in order to establish itself as a brand (Zhang, 2016).

4. Incorporation of innovation

Innovative ideas and food items have to be introduced, to attract more customers.

Conclusion

Thus, with diligence and hard work, the start-up restaurant could be established. However, it is essential that proper planning and adequate fund have to be arranged before the venture. The internal and external factors that affect the business have to be analysed as well. 

References

Abel, E. E., & Obeten, E. (2015). Restaurant Customer Self-ordering System: A Solution to Reduce Customer/Guest Waiting Time at the Point of Sale. International Journal of Computer Applications, 111(11).

Chen, S. C., & Elston, J. A. (2013). Entrepreneurial motives and characteristics: An analysis of small restaurant owners. International Journal of Hospitality Management, 35, 294-305.

Hartmann, P. M., Zaki, M., Feldmann, N., & Neely, A. (2014). Big data for big business? A taxonomy of data-driven business models used by start-up firms. A Taxonomy of Data-Driven Business Models Used by Start-Up Firms (March 27, 2014).

Khan, M. A. (2014). Restaurant franchising: Concepts, regulations and practices. CRC Press.

Luo, T., & Stark, P. B. (2014). Only the bad die young: Restaurant mortality in the Western US. arXiv preprint arXiv:1410.8603.

Verghese, K., Lewis, H., Lockrey, S., & Williams, H. (2015). Packaging's role in minimizing food loss and waste across the supply chain. Packaging Technology and Science, 28(7), 603-620.

Zhang, W. (2016). Business Plan for an All You Can Eat Korean Restaurant in Ontario, California.