Executive summary
Three entrepreneurs, Olivia, Jack, and Monica will set up a restaurant business in a busy street in Toronto, Canada, which they named as Toronto Paradise Feast Restaurant1. Although the restaurant industry is highly competitive, the entrepreneurs will enter into partnership agreement and set up the business with a unique idea so that they have competitive advantage. They hope to create an exclusive restaurant where customers can take pleasure of Arabian, Korean, Chinese, and Canadian cuisine under one roof. In order to differentiate the business, they will form four separate divisions inside the restaurant and create the atmosphere of the respective countries in those divisions.
The projected profit and loss account shows that its sales revenue will be $1964000 in 2015, $2268420 in 2016, and $2620024 in 2017; moreover, the owners of this shop will provide sufficient budget for sales and marketing, for example, $108000 in 2015, $140800 in 2016, and $285840 in 2017. To be specific, they will spend $9000 each month in the first year for sales and marketing; conversely, the projected cash flow statement indicates that the net cash flow from operating activities will be $1964000, $2268420, and $2620024 in 2015, 2016 and 2017 consecutively; furthermore, it will reach break-even point within first quarter of 2015.
Background statement
The entrepreneurs of this new venture aim to form a restaurant in Toronto, Canada, which would be the customers’ first choice in terms of taste of food, service quality, and customer care.
Mission
The mission of Toronto Paradise Feast Restaurant is to become consumers’ most desired restaurant business where they could come not just to please their palate with heavenly blissful tastes and flavors, but also to get the pleasure of supreme quality, nobility, and value of money and enjoy the cultures of four different nations under one roof.
Vision
It has a vision to bring about joy in the minds of thousands of citizens living in Toronto and sell dishes promptly to satisfy customers’ requirements correctly, rapidly, and chivalrously and carry out the trading activities by conforming to ethical practices and bylaw of the industry.
Business description
In order to understand the business better, it is highly essential at this stage of the paper to take a quick look at the general description of this new business. It is important to state that in this business description section, the general purpose and nature of the new business will be discussed in order to give a normal idea about it.
General description of the business
It is highly essential to state that this new restaurant business, named Toronto Paradise Feast Restaurant, will be a highly diversified venture, as it will be offering cuisines from four different countries around the globe. The entrepreneurs of the business have an intention to offer their customers with the environment of the countries from where the cuisine collections originate. This means that in order to differentiate Toronto Paradise Feast Restaurant from other restaurant in the city, there will be some unique features of this food shop so that customers are attracted for its exclusivity and they come to visit it over and over again.
To be precise, Toronto Paradise Feast Restaurant will have four sections of food courts, which will include an Arabian segment, a Canadian segment, a Chinese segment, as well as a Korean segment. In addition, it is notable that each of the segments will present the culture of that country to the customers, so that the customers feel like they have came to visit a restaurant, which locates in Saudi Arabia, Korea, or China, rather than that the food shop in fact locates in Canada.
With the purpose to make sure that the cultures of the respective nations are properly manifested, the business will ensure that it each of the sections, that is, the Saudi Arabian, Korean, Chinese, and Canadian segments are decorated respectively in the Arabian, Korean, Chinese, or Canadian way. Moreover, apart from serving the traditional cuisines from these countries, business will also employ Saudi Arabian people on the Saudi Arabian section, Korean workers on the Korean part, Chinese people on the Chinese division, and Canadian people on the Canadian fragment.
Uniqueness of product or service and product description
It is notable that the uniqueness of the product and service will be quite strong due to the reason that even though there are many food shops in Toronto who offer Canadian and Chinese food, the numbers of food shops that offer Arabian and Korean dishes as well are very much limited. On the face of it, here exists little or no food shop that offers cuisine from four different regions of the world in just one place.
This makes Toronto Paradise Feast Restaurant highly distinctive, as a growing number of customers will find it incredibly different from any other restaurant businesses and so will become regular patrons of it. In addition to the uniqueness of the product and service which arises from the range of miscellaneous national traditions and from the fact that the Arabian and Korean dishes are not readily available in every place, another great uniqueness will be that it will serve the most amazing dishes from each culture to the customers in a very trendy way. This will ensure that the customers are not bored with the old fashioned or out of date flavors and tastes of the different ethnicities.
The Arabian menu would include fantastic dishes such as Ackawi, Baba ghanouj, Baklava, Balila, Batata harra, Fattoush, Falafel, Halva, Hummus, Kunafi, Kibbeh nayye, Kofta Ma’amoul, Shawarma, Tahini, Shorbat, Beid Bi Lamoun, Hamud, Okra, Sidreyat Al Dajaj, Kabsa, Dajaj Bil Fitr, Bukhari Chicken, Kebab, Fakhitha Bel Laban, Qahwa Arabeya, and may other mouth watery preparations which are famous in Saudi Arabia. The menu of the Korean part of the shop, on the other hand, would comprise the most popular and widely liked conventional recipes from Korea; for example, Deodeok gui, Galbijjim, Tteok, Makgeolli, Bibimbap, Sundae, Andong jjimdak, Dubuseon, Sannakji, Yukhoe, Namul, Gujeolpan, Sinseollo, Oritang, Samgyetang, Galbi, Saengseon gui, Insam cha, Beoseot-gui, Kimchi bokkeumbap, Japchae, Tteokguk, Miyeok guk, Galbitang, and so on.
It is highly important to state that the Chinese menu would include the well-known items, such as Red-bean soup, Chow-mein, Noodle-soup, Zhajiangmian, Bang-Tofu, Bird’s nest soup, Black-sesame-soup, Crab and Fish Stomachs, Fried-Pumpkin Dumplings, Ginger-duck, Wonton, Longevity-buns, Mooncake, Sachima, Hot-&-sour-soup, Crispy fried-chicken, Snow-fungus-soup, Winter-melon-soup, Fried rice, Century-egg, Duck’s head, Kung-Pao chicken, Peking-duck, Soy-egg, Oyster-omelets, Beef chow-fun, Buddha’s delight, and Pickled-vegetables. On the other hand, it is highly notable that the Canadian menu, amongst all other items, must include appetizing and engaging recipes such as Fish and brewis, Figgy duff, Split pea soup, Butter tarts, Beavertails, Tourtière, Saskatoon berry pie, Canadian bacon, McCain’s French fries, Maple syrup, as well as Nanaimo bars and many other popular Canadian dishes.
Description of the company ownership and management team
Olivia, Jack, and Monica will set up Toronto Paradise Feast Restaurant through partnership contract; it is notable that the articles of association of the new business must contain the following terms:
Table 1: Company ownership and management team. Source: Self generated.
Business objectives
Toronto Paradise Feast Restaurant’s objectives are to achieve break-even by 2015, attain at least 8% market share by 2016, and be the top brand in Toronto within five years of set up.
Industry analysis
The following portion gives a quick glimpse of the restaurant industry in Canada:
Industry size, growth rate, sales, and trends
CSG (2013) noted that the sales of the restaurant industry in Canada remained very high in the past year and it has been projected that the sales will be even greater by the end of 2014:
The following chart shows the growth rate of the industry in terms of increase in the number of employments, which is an indicator of how fast the industry is expanding; by 2023, the industry is projected to be quite matured:
Toronto’s restaurant industry profile
According to GTA (2014), Toronto’s restaurant industry is incredibly prospective, as recent surveys have revealed that in terms of restaurant business opportunities, the city has been ranked in the third position:
The following chart shows that this industry is very wealthy indeed and is growing at a fast pace as well, generating large revenues:
Key success factors
Toronto Paradise Feast Restaurant will have the following success factors as a player in this industry:
Table 2: Key success factors. Source: Self generated.
Environmental analysis
At this stage, it is important to carry out the environmental analysis for the start up business:
Demography and population
The chart below shows the population of age groups and gender in Toronto according to City of Toronto (2012):
The diagram below shows growth rate of the population by age:
Political factor
According to PKF (2014), Canada has a stable and business friendly political environment, where volatile factors like general strike, industrial action, political turmoil, etc. are rare.
Economic factor
According to CBC (2014), the economy of Canada is booming and is benefiting the businesses in many ways:
Legal requirements
According to BLG (2013), laws regarding human rights, employment, international trade regulation, competition, sale of goods and consumer protection, privacy obligations, environment, and taxation affect the industry and Toronto Paradise Feast Restaurant must conform to those.
Market analysis
Target market
The target customers of this business are civilians living in Toronto, students, tourists, passer by, businesspersons, workers, and so on.
Porter’s five forces model
Porter’s five forces are assessed below for this new business:
Threat of new entrants
This threat is low in this industry as new entrants lack skill, fund, and adequate resources to sustain in this highly competitive market condition.
Bargaining power of buyer
Buyers possess high bargaining power for the presence of numerous similar businesses; however, Toronto Paradise Feast Restaurant will differentiate the business to gain competitive advantage (Wade 2013).
Bargaining power of suppliers
Suppliers’ bargaining powers are moderate, as there is presence of a large number of vendors in the market who compete between each other.
Rivalry among competitors
According to Wade (2013), existing rivals are highly aggressive, which may pose problem for this new restaurant business.
Threats of substitute product
Arabian and Korean dishes are not readily available in every place in Toronto, so this threat is quite lower; however, substitutes are available in case of Canadian or Chinese dishes.
Marketing plan
The detailed marketing plan of the business will now be considered:
SWOT analysis
Strengths
The marketers of Toronto Paradise Feast Restaurant will offer quality items with outstanding customer services to develop brand image and increase sales revenue; in addition, it will recruit talent and competent chefs and staff to serve the customers in accordance with market demand.
Weaknesses
From the very beginning, Toronto Paradise Feast Restaurant may face liquidity crisis for which it has to reduce promotion expenses and other operating costs; therefore, it would be difficult to attract target customers and provide sufficient remuneration to the employees.
Opportunities
The entrepreneurs have already prepared a report on the present market condition by taking data from the secondary sources and interviewing local customers; however, the data demonstrated that consumer interest on new restaurant has increased, as they would like to taste new foods. At the same time, the target customers of this restaurant are mainly students of local college and university; as a result, it can be assumed that it would be able order to get more customer traffic in regular basis. On the other hand, the marketers of Toronto Paradise Feast Restaurant will offer discounts for the loyal customers, design a website including payment option, decorate the restaurant with creative ideas and introduce modern equipment; therefore, it would be able to create brand image and start new outlet in different place of Toronto, Canada.
Threats
Toronto Paradise Feast Restaurant will face external challenges from the local and international competitors of restaurant industry, extreme staff turnover rate, bad weather condition, financial downturn, utilize technology, health consciousness of the people, and so on.
BCG matrix
The market position of Toronto Paradise Feast restaurant in the BCG matrix will now be considered; it is notable that numerous rivals of the business such as McDonald’s, Krispy Kreme, Tim Hortons, Subway, Cinnabon, Burger King, and Domino’s Pizza are in the ‘stars’ part because of high growth rate and high-relative market share. Although Toronto Paradise Feast Restaurant will be initially at the ‘dog’ part due to low market share and poor market growth, its position will improve within several months of operations due to superior performance, good service quality, and higher customer satisfaction.
Market testing
Toronto Paradise Feast Restaurant will undertake market-testing procedure to appraise the demand and acceptability of its products and services to the patrons before entering the market in reality; it would carry out market-testing by surveying the market by meeting potential patrons, and organizing integrated marketing campaigns to aware public to better apprehend their response.
Marketing strategy
Competitive advantage and differentiation
Along with its financial strength, extensive market research, different service, innovative business idea, awesome growth strategy, highly educated entrepreneurs, excellent new product development capacity, superb customer care unit, and cost effective and good promotional package, there is no doubt that the company will have high level of competitive advantage and differentiation.
Pricing strategy
The pricing strategy will be set in a way so that it remains to be highly profitable for the business, but the customers from both the higher or lower ranks of the society could afford the products. The prices will vary depending on the menu, and the pricing strategy will focus on the fact that the business will have to offer cheaper prices and often discount in order to retain customers and make them loyal. In order to ensure this and still keep the profit margin higher, the firm will have to keep its operational cost very lower and buy raw material very cheaply.
Promotional strategy and the marketing approach
The promotional strategy will have to be smart; on special occasions such as Christmas, New Year, Easter, Valentine’s day, Mother’s day, Father’s day, or any other events, the company would offer special discounts, money off coupons, free gifts, or raffle draws to attract more and more customers. Marketing approach of the business will also have to be chosen wisely, as at initial stage, it would not be possible for it to afford advertising itself on TV commercials; so it would rather emphasize on door-to-door marketing, billboards, newspapers, roadside demonstrations, leaflets, and so on; these advertising and marketing mediums will be less costly, but still effective and fruitful.
Management team and company structure
The management team and company structure of Toronto Paradise Feast Restaurant has been designed in an uncomplicated and straightforward way to ensure that the costs of operations can be kept lower; it is discussed in the subsequent portions.
Business structure
The chart below briefly illustrates the corporate structure of the restaurant; it gives an idea about how the business will be organized after its establishment. It is clearly visible that owners have intended the corporate structure of the restaurant to be as simple as possible:
Management team
At the initial stage, the company will have five departments, namely, HR department, marketing department, operations department, accounts department, and R&D department and each department will have one manager as the head leading his simple and small team of subordinates.
Operations plan
At this stage, the operational plan of the business will be considered in detail in order to get a better insight of Toronto Paradise Feast Restaurant’s day-to-day activities:
Business location
The location of the business will be in a busy street in Toronto, where there is a frequent flow of people due to various schools, colleges, universities, offices, malls, etc. A busy road will ensure a constant flow of customers in the food shop; as a result, it is very important for the business to choose such a location and boost profitability. As stated earlier, Toronto’s restaurant industry is incredibly prospective and the city has been ranked in the third position in the world in terms of restaurant business opportunities and overall growth; so, location in this city will be quite beneficial. Moreover, there is a growing population in this area and the numbers of multinationals operating here are increasing as well, which will allow the business to grow fast.
Physical facilities
Toronto Paradise Feast Restaurant would have hygienic and elegant internal design; however, it is important to note that there are some specific operational issues, which are necessary to be considered in order to understand the nature and type of the physical facilities of the business better:
Table3: Physical facilities. Source: Self generated.
Proximity to supplies
The owners of this business will make sure that the location of this restaurant is proximate to the suppliers of raw materials, so that it is easy to get the supply of all materials easily and quickly. However, if it is not possible to locate beside the storehouses of the suppliers, than the company will try to locate at a place in Toronto where there is good system of quick and cheaply accessible transportation facility so that the cost of carrying the raw materials from the suppliers to the restaurant remains lower and the operation run smoothly.
Financial plan
Important Assumption
Table 4: Start-up Requirements for Toronto Paradise Feast Restaurant. Source: Self generated.
Projected Income Statement for the next 3 years
Table 5: Projected Income Statement for three years. Source: Self generated.
Pro forma Balance Sheet for the next 3 years
Table 6: Projected Balance Sheet. Source: Self generated.
Projected Cash flow for the next 3 years
Table 7: Projected Cash Flow. Source: Self-generated.
Pro forma Profit and Loss Account for 12 months
Table 8: Projected Income Statement for first 12 months. Source: Self generated.
Break-even Analysis
From the above break-even analysis of Toronto Paradise Feast restaurant illustrates that it would be able to reach break-even points within first quarter.
The role of human resource in organization
Human resource would play the most important role in any organization, and in case of Toronto Paradise Feast Restaurant, there will no variation from this conception; as a result, it is very mush essential at this stage of the paper to focus on the human resource planning from this new start up business.
HR plan
The manager of the human resource department will create HR plan by focusing on the present and future needs of Toronto Paradise Feast Restaurant, the strengths and weaknesses of the business, the major areas of concern, and the specific requirements and tangible prospects. In addition, the manager should also keep in mind that proper evaluation of the capabilities and skills of the firm is needed before creating HR plans; she should always remember that the plan must not conflict with the broader organizational goals and strategies; in one word, the manager must align the plan with the firm’s mission and vision statements.
Recruitment and selection
As a newly established business, Toronto Paradise Feast Restaurant must try to keep its operational costs lower; so, at the initial stage of operation, it would employ merely 80 employees, that is, only a few employees in each of the four sections. The following table shows the detailed plan of how the recruitment and selection process will be carried out in each of the four sections:
Table 9: Recruitment, selection and entire HR plan. Source: Self generated.
Training and development
Several training and development programs will be carried out in order to ensure that the workers can perform their respective tasks in their respective positions within the business efficiently, skillfully, and competently.
Compensation and appraisal
Toronto Paradise Feast Restaurant will create a recompense package, which ensures that the workers are well motivated and satisfied with their jobs, but the company does not incur huge burden of costs. The recompense packages will surely vary, with managers receiving higher payments than that of their subordinate workers; moreover, the business will give attractive packages for the chefs as well. In the appraisal process, workers’ performances will be assessed to take corrective actions; the appraisal process will help identifying the best performers and rewarding them, as well as encouraging underdogs to improve themselves.
Reference List
BLG. (2013). Doing business in Canada. Web.
CBC. (2014). OECD reduces growth estimates for Canadian economy. Web.
City of Toronto. (2012). 2011 Census: Age and Sex Counts. Web.
CSG. (2013). 2013 Profile & Analysis: Chain Restaurant Operators. Web.
GTA. (2014). The Restaurant Industry in the Greater Toronto Area. Web.
PKF. (2014). Doing Business in Canada. Web.
Wade, R. (2013). Challenges of Full-Service Restaurant Brands Expanding Across the Canada/U.S. Border. Web.
Footnotes
1 Assumed.