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Business Plan On

TFK’s

The Ethnic Food Restaurant

Prepared By:
RISHABH KEDIA
ROHAN SRIVASTAVA
TARUN SRIVASTAVA
VARUN MISHRA
MBA-2ND Sem
(Corporate Management)

___________________________________________
IMS
University of Lucknow
Plan Outline


1. Executive Summary
2. Preliminary requirements for starting a new restaurant
3. Company Summary
4. Services
5. Market Analysis Summary
6. Strategy and Implementation Summary
7. Web Plan Summary
8. Management Summary
9. Financial Plan
o Investment Opportunities
o Important Assumptions
General Assumptions
Risk Analysis/Mitigation
o Break-even Analysis
o Profit and Loss Statement
Cash Flow Statement
o Cash Flow
o Balance Sheet Statement
Balance Sheet
o Business Ratios

o 10.Expansion, Payback & Exit Strategy
ACKNOWLEDGEMENT

The Team TFK’s is very grateful for the kind co operation and
guidance of Esteemed Mentor Mr. Aseem Rastogi , who not only
guided us but also helped us from time to time in times of doubt
and through his able and kind guidance only, we were able to
create this business plan.
We are also very thankful to Mr. V K Tripathi, Manager
Madhurmilan Restaurant and Mr. Abhinav Dwivedi,
Manager(Finance),The Taj Hotel, Lucknow for their kind support
and help in the preparation of this business plan, without their
support the plan creation wouldn’t have been so spontaneous
and satisfactory.
Executive Summary
Our initial statement to Investors and Financial Lenders is a candid disclosure of the
TFK’s Restaurant & Lounge business proposal - our intent is to set realistic business
expectations, and eliminate any questions about the profitability of this business venture.
Entrepreneurs have a tendency to paint the business plan with a very optimistic brush,
highlighting strengths and camouflaging the risks. We, as business owners, have a
vested stake and financial commitment in the success of this restaurant. Our intent is to
have a definitive business, financial, and marketing plan that not only serves our need
for capital financing, but is utilized as our daily business roadmap. We have taken all
precautions to validate our business and financial models, focusing on realistic
projections. We have accomplished this as follows:

1. Our financial model is rooted in industry facts, not optimism. We have


based costs on our vast industry and practical experience with similar ventures,
validation against National Restaurant industry cost averages, and analysis against
local U.P market averages. We have taken a collective look at all figures to make
solid business estimates.

2. Our business concept was derived from detailed Market Analysis. Instead of
building a business around a preconceived concept, we analyzed the market findings
and built a concept around our consumers. In other words, our business is built to
service an unmet consumer 'want'.

3. A buffered financial plan that ensures adequate capitalization. A


contingency buffer is included in the start-up cost to ensure the business in not under
financed, as well as giving the business adequate funding to sustain it in the first six
months of start-up. Our industry experience confirms a longer ramp-up stage for
restaurants over other retail/service businesses. A common mistake for new
entrepreneurs, but fully addressed in this business plan.

4. A solid Risk Mitigation Plan. We have evaluated traditional and non-traditional


risks associated with Restaurant failure and accounted for them directly in the
business plan. Instead of dismissing the risks, we have identified valid mitigation
strategies for each.
5. Deep Management Experience. Our management team has 20 years combined
experience, involved with over 86 restaurant openings, and deep involvement with the U.P
restaurant industry.

The total capital requirement to launch TFK’s Restaurant & Lounge is Rs.20,00,000 of which
Rs.17,58,449 is allocated to start-up capital, and Rs.2,41,551 as business operations cash reserve.

Owners, Mr. Varun Mishra, Mr. Rishabh Kedia, Mr. Tarun Srivastava and Mr. Rohan
Srivastava are investing Rs.5,00,000 in personal capital.

As owners, our commitment is to take personal accountability for all financial debt. We have
taken the necessary precautions to ensure the business is fully capitalized, and have addressed all
financial shortfalls to ensure a successful business start-up. Even with the worst-case sales
scenario, we reach a Net Worth break even at the end of Year 5.
o Preliminary requirements For Starting a New
restaurant
o
o Before making a business plan to start a restaurant some necessary details must be acquired
and a number of technical licenses have to be obtained, and renewed from time to time.

At the plot or building where in the restaurant has to be constructed, before the license is granted
a sample of water must be taken by the food inspector for testing the permissible levels of water
purity, only then a license is granted for opening a restaurant.
Then a license fee of Rs 30 is deposited for the license of opening a restaurant, here there are 3
licenses that need to be taken.

• License for starting a “JAL PAAN GRAH”


• License for providing beverages like bottled cold drinks and
mineral water
• License for providing food made by “VANASPATI GHEE”

1. These licenses are renewed on an yearly basis.

2. Further we have to get the labour registration from the Labour


Department for all the staff members working for us, this is again
renewed every 5 years.

3. Registration at the nearest fire station also needs to be taken and


renewed every 5 years.

4. To be on the safer side we must keep “Pukka Bills” of all


consumables for three years at least, to keep a strict quality check
on the items produced and consumed in the production purpose.
TFK’s at a glance
Objectives
TFK’s Restaurant & Lounge's objectives for the first three years of operation include:

• Keeping food costs at less than 35% of revenue.


• Keeping employee labor cost between 37-39% of total sales.
• Remaining a small, unique restaurant with eclectic food and service.
• Averaging sales between Rs.30,00,000 – 45,00,000 per year.
• Promoting and expanding the TFK’s restaurant concept as a unique Lucknow
destination restaurant.
• Expanding our marketing and advertising in U.P and in the neighboring suburbs to
increase our customer base.
• Achieving a profitable investment return for investors for Years 2 - 6.

Mission

• TFK’s will be an inspiring restaurant, combining an eclectic atmosphere with excellent


and interesting food. The mission is to have not only a great food selection, but also efficient
and superior service - customer satisfaction is our paramount objective. TFK’S will be the
restaurant of choice for a mature and adult crowd, couples and singles, young and old, male
or female.
• Employee welfare, participation, and training are equally important to our success.
Everyone is treated fairly and with the utmost respect. Our employees will feel a part of the
success of TFK’S Restaurant & Lounge.
• Our concept combines variety, ambiance, entertainment and a superior staff to create a
sense of 'place' in order to reach our goal of overall value in the dining/entertainment
experience. We offer fair profits for the owners, and a rewarding place to work for the
employees.

Keys to Success

1. Unique, Innovative & Contemporary: The creation of a unique and innovative fine
dining atmosphere will differentiate us from the competition. The restaurant will stand out
from the other restaurants in the area because of the unique design and decor. We will offer a
fine dining experience in an electric atmosphere.
2. Product quality: great food, great service and atmosphere.

3. ‘Spice of Life’ Menu: The menu will appeal to a wide and varied clientele. Our eclectic
menu features regional specialties around the globe, from Spanish ceviche, to Thai and Indian
curries.

4. Employee Retention Focus: Employee retention and development programs will be a


primary focus and success platform for this business. Through these programs, we will be able
to draw seasoned and elite professionals and build a committed work force. We have budgeted
for a stock option program for Chef and Management positions to subsidize a lower salary
base. This lowers our immediate overhead and attracts quality staff.

5. Cost Control Focus: We will control costs at all times, without exception. Cost Control
will be an integrated function of the restaurant from the onset. Cost control is about managing
the numbers - interpreting and comparing the numbers that impact the bottom line. 80 percent
of the success of a restaurant is determined before it opens. Our focus is to reduce the cost of
goods sold to meet our profit margin goals by managing the following crucial elements of
cost: Purchasing, Receiving, Storage, Issuing Inventory, Rough Preparation, Service
Preparation, Portioning, Order Taking, Cash Receipts, Bank Deposits and Accounts Payable.

Due to intense competition, restaurateurs’ must look for ways to differentiate their business to
achieve and maintain a competitive advantage. Lucknow/Downtown U.P's redevelopment
requires a place that will fit into the 'new look' of the community, one that is contemporary and
entertaining. TFK’S will fill that niche.
Company Summary

What is TFK’s?
TFK’s is the destination for the ethnic food corner that enables the superior value through the
food. Our outlet also provides excellent and friendly customer service to support the ambience of
fun, energetic and youthful lifestyle.

The Design
TFK’S Restaurant & Lounge is unique to Lucknow U.P. The restaurant features 3 venues in one
(A concept called as Multi-Branding'):
1. A TFK’s Lounge,
2. TFK’s Cosmopolitan Bar,
3. And TFK’s Full Service Dining.

This concept offers customers variety, offering multiple dining and entertainment options within
a single establishment. The spatial and menu divisions will broaden our appeal and provide our
customers with a different experience on each visit.
The atmosphere caters to a young but mature adult crowd. This is not a family dining
establishment. Total space requirements are 3,000 square feet. In total, the restaurant will provide
seating for 110 patrons. Where possible, consideration will be given to incorporate a dining patio.
Zoning, parking, and accessibility issues will be reviewed as key criteria. We will draw on our
Advisory Board as part of the site selection and lease negotiation.

The Menu

TFK’S is focused on servicing U.P's growing demand for an ethnic eating experience. For lack of
a better term we are launching a multi-ethnic' cuisine restaurant - a restaurant concept that
responds to U.P's need for selection and choice. TFK’S is a complimentary mingling of
international cuisine on a single menu. The Lucknow demographics fit this concept perfectly.

Quality food
Each store will offer nothing but freshly fried rice, sandwiches and variety of unique blend
sauces, all served with old-fashioned home-style care.

Variety, variety, variety


A different selection of sauces will be featured every three months and we will also change our
Italian soda flavors to accompany our fries.
The Management

Our management team has over 20 years combined experience in food, restaurant and hotel,
business management, finance, and marketing arenas.

Company Ownership
The restaurant will start out as an LLC(Limited Liability Company) corporation, owned by its
founders, Varun Mishra, Rishabh Kedia, Tarun Srivastava and Rohan Srivastava.Mr. Rishabh
will function as the General Manager and Executive Chef, and Mr. Varun as Managing Partner.
Mr. Varun, Mr. Rohan, Mr. Tarun and Mr. Rishabh have a long-standing professional
relationship in the restaurant industry, stemming back to Madhurmilan,Lucknow,UP,India. We
are accomplished restaurateurs, having owned several full-service restaurants. We currently own
UP UP AND ABOVE Restaurant and Nightclub, Pune. Mr. Rishabh is also an international
Restaurant Consultant for top organizations such as the Starwood Group, who own the hotel
chains of The Westin, Sheraton Hotels, Four Points, St. Regis, and W Hotels.
Mr. Varun has a background in Business Management, and also has completed his Bachelors in
Hotel Management. Under the management of Varun, Myth Restaurant was a feature restaurant
in Toronto, and distinguished as a top 10 restaurant while under his management from 2003 -
2005.

Business Model Of TFK’s


 Product Consistency – By developing a sophisticated supplier networked operation and
distribution system, the Food Corner has been able to achieve consistent product taste and
quality across geographies.

 Act like a retailer and think like a brand – TFK’S focuses not only on delivering sales
for the immediate present, but also protecting its long term brand reputation.

Start-up Summary
We are currently negotiating a restaurant space of 3,000 sq. ft. in Lucknow U.P, India, and will
open TFK’S in October 2011.

Our start-up costs are mostly expensed equipment, furniture, painting, reconstruction, rent, start-
up labor, liquor license, and legal and consulting costs associated with opening our restaurant. At
the start of business, Rs.97, 000 will be allocated for business operations reserve. This is a solid
start-up forecast based on our market analysis and our knowledge and experience in the industry.

We will purchase the following current assets during start-up:

• Fixtures and Lighting: Rs.32,250


• Bar Equipment: Rs.56,300
• AC, Sound and Televisions: Rs.183,780
• Office Equipment (2 Computers, Fax, Printer, Safe): Rs.96,000

We have budgeted for the services for a premier Restaurant Consultant familiar with the U.P
Market. This is especially key during the site selection and start-up stage. This company will have
an integral role in validating the final restaurant location and personnel selection, and participate
on the TFK’S Advisory Board.

The Four owners are personally committing Rs.5,00,000 of capital.

Start-up
Requirements
Start-up Expenses
Restaurant Consultant (4 months) Rs.15,911
Architectural Design Rs.2,195
Structural & Plumbing Design Rs.1,368
Mechanical & Electrical Design Rs.2,155
Graphic Design Rs.1,185
Electrical & Structural Engineering Fees Rs.2,592
Design Consultants (Kitchen, Interior & Dining) Rs.9,119
Engineer & Architect Fees Rs.7,040
CONSTRUCTION Rs.5,00,000
Plumbing Rs.33,244
HVAC (Air Return, Air Ducts, etc.) Rs.19,250
Electrical Rs.7,964
Disposal & Demolition Rs.4,122
Structural Construction (4 Months General Labour) Rs.52,099
Facade (Exterior Construction) Rs.3,092
Plaster (Dry Wall) Rs.2,061
Mill & Metal Work Rs.8,244
Interior Finishes (2500 - 3000 sq. ft.) Rs.14,538
Flooring Rs.14,622
Fire Alarm System Rs.3,092
Security & Phone System Rs.4,615
Stools, Chairs, Tables, Uniforms Rs.38,025
Glassware, Flatware, Small ware (Bar & Lounge) Rs.3,298
Glassware, Flatware, Small ware & Supplies (FOH) Rs.8,298
Kitchen Equipment Freight Fees Rs.2,389
FF&E Taxes (Taxes on Purchase) Rs.7,988
Capitalized Legal Fees (LLC, Investor Agreements) Rs.7,080
Software: Restaurant/Inventory Rs.5,500
Software: Cost Control Rs.6,000
Impact, Tap & Permit Fees Rs.3,115
Business License & Temp Certificate of Occ. Rs.1,615
Liquor Licenses Rs.4,615
Utilities, Disposal, Tax & Insurance Rs.9,275
Security Deposits (Phone/Elec/Gas/Water) Rs.6,250
Initial Lease Deposits Rs.6,250
Bank & Loan Closing Costs Rs.6,250
Web Site Construction Rs.5,800
Initial Marketing, Training & PR Rs.19,550
Research & Development Rs.3,050
Start-Up Salary (Mngt & Chefs) Rs.58,050
Recruiting (Staff) Rs.14,550
Inspections Rs.750
Initial Cleaning Services Rs.1,000
Total Start-up Expenses Rs.9,27,209

Start-up Assets
Cash Required Rs.97,099
Start-up Inventory Rs.27,500
Other Current Assets Rs.73,311
Long-term Assets Rs.6,33,330
Total Assets Rs.8,31,240

Total Requirements Rs.17,58,449

Start-up Funding
Start-up Funding
Start-up Expenses to Fund Rs.9,27,209
Start-up Assets to Fund Rs.8,31,240
Total Funding Required Rs.17,58,449

Assets
Non-cash Assets from Start-up Rs.10,72791
Cash Requirements from Start-up Rs.2,41,551

Cash Balance on Starting Date Rs.2,41,551


Total Assets Rs.13,14,342

Capital

Planned Investment
Rs.5,00,000
Mr. Rishabh Kedia
Rs. 5,00,000
Mr. Rohan Srivastava
Rs. 5,00,000
Mr. Tarun Srivastava
Rs. 5,00,000
Mr. Varun Mishra
Total Planned Investment Rs.20,00,000

Loss at Start-up (Start-up Expenses) (Rs.17,58,449)


Total Capital Rs.2,41,551

Total Funding Rs.20,00,000


Operations

Management
Operations management

Restaurant Location

Lucknow, U.P is the location selected for the TFK’S concept. The outlook for the future of U.P's
Lucknow district is exceptionally positive and the most progressive development area in the city.
Developers are infusing over Rs.50 billion in Commercial, Residential, and Retail development.
The market has been carefully selected and tested for the necessary demographics and retail
traffic necessary to meet the goals laid down for profitability. The busy Lucknow
commercial/residential location has been chosen based upon a successful demographic model and
a traffic count of more than 33,000 cars daily.

Restaurant Designs

Single-Level Design Concept: The total space requirement is 3,000 square feet. The restaurant
will feature a comfortable and open concept design. The central dining area will allocate 76
covers, the lounge 22 covers, and the dining bar with 12 covers. In total, the restaurant will
provide seating for 110 patrons. Where possible, consideration will be given to incorporate a
dining patio. Zoning, parking, and accessibility issues will be reviewed as part of this analysis.

Optional Patio: Keeping in mind the climate of the City, during the busy winter month’s
customers can also sit outside on our patio and we will offer a special winter menu, featuring
lighter fare, exotic drinks, as well as non-alcoholic offerings. The patio setting will be a fun and
casual atmosphere for the winter crowd.

Operating Criteria

The restaurant will be located in Lucknow U.P. The restaurant will service lunch, dinner, and
after-hours dining during the week and weekends. The restaurant will operate during peak service
time to take advantage of street traffic, and after-hour patronage from the entertainment facilities
in the area. Service will be available during the following hours:
Lunch: Monday to Saturday, 11 a.m. - 3:30 p.m.
Dinner: Monday to Saturday, 7:30 p.m. - 11 p.m.
Sundays - Market brunch takeout only.
Services

TFK’S Restaurant & Lounge will feature international dishes, an eclectic ambiance, and superior
service. Our food will be of the finest quality and prepared with exotic flare. Customer
satisfaction is the driving force behind our success. We will change our menu every 4 months, but
maintain the 'favorites' for loyal patrons. Portions will be modestly sized, garnished with stunning
presentation.
Our wine list will be modest and primarily focused on wines from California, Spain, Portugal,
and Argentina. Approximately 25% will be available exclusively by the glass, and the remaining
labels will be available by the bottle. We will also feature a moderate international beer selection
on tap and in bottles. The TFK’S bar features a comprehensive selection of local and international
spirits.
The kitchen staff will have the best in culinary education and work experience. Their creative
talents will compliment one another. The lounge and restaurant staff will offer the finest service
in an electric atmosphere and offer customers an extraordinary dining experience.

TFK’S Menus
TFK’S's varied international menu will feature Thai, Chinese, Spanish, and other regional flavors
The menu flows together to create complementary elements. Normal dining will have a reduced
Tapas, Appetizer and Entrees selection, while the Fusion Dim Sum menu will have special items
featured only for after-hours dining. The final menu will be defined by the Executive Chef and
paired with the wine menu. We have carefully selected a premium wine, beer, and alcohol listing,
from which we will choose a modest rotating selection. TFK’S's marketing will focus on our
exotic foods, but our hours, target market, and location will produce significant alcoholic drinks
sales. Tapas, in particular, are small dishes meant for sharing while drinking sangria, wine, or
other mixed drinks, and the Tapas menu will play up this idea with drink suggestions.
The list below offers a small selection of our opening menu offerings:

• Appetizers
• Bread basket served with Olive oil, Black Pepper, Cheese dip
• Soups, Finger chips, Bread Pakora, Paneer Pakora, Cutlet, Sandwich

• Salads

• Mixed Greens with Spanish sherry wine vinaigrette


• Asian Pear and Endive Salad with Blue Cheese & Walnuts
• Russian Salad
• Traditional Indian salad
• Entrees
• Tequila Scallops w/ a Spanish sherry reduction
• Thai Red Chili rubbed shrimp
• Bloody Mary

• Desserts
•Chocolate Chunk Bread Pudding w/a Bourbon Cherry sauce
•TFK’S Chocolate Explosion - Milk, Dark and White chocolate
•TFK’S Fruit Plate
•TFK’s Special ice cream

Specialty Drinks & Coffees

A key source of revenue for the restaurant will be alcohol and bar sales. The restaurant will
feature exotic drinks on a separate menu. Alcoholic drink specials will be featured, as well as a
large non-alcoholic selection. After-hours bar service will feature selections of non-alcoholic
drinks to increase bar sales during lunch and after regulatory hours, Bar pricing is competitive;
prices range from Rs.350 to 695. Non-alcoholic drinks will be in the higher price bracket due to
preparation requirements. Prices will range from Rs.475 to 950.
Marketing
Management
MARKETING STRATEGY OF THE TFK’S

 DIRECT MARKETING

 INTERNET MARKETING STRATEGY

 SMS MARKETING STRATEGY

FIRM CUSTOMERS
All Population of lucknow are our customers

Customer Perception and Customer Expectation


Customer perception is a key factor affecting a product’s success. Many potentially revolutionary
products have failed simply because of their inability to build a healthy perception about
themselves in the customers’ minds. TFK’S being an nationally renowned brand brings with it
certain expectations for the customers.
Regular spender Your most prized customers. What do they typically order and
what offer would be most appealing to them?
Occasional customer These customers don’t order from you as often as you would like.
They might respond if you make them an enticing offer.
Night hawks You may have a group of customers that order from you late at
Target Segment night. Why not make themWhatanisoffer thatfor
TFK’S canme?
be redeemed after
A Family with children midnight.
A treat to children, a fun place to be for the children.
Early
Urbanbirds
customer on the move These customers
Great might
taste, quick typically
service order
without from you
affecting theaswork
soonschedule
as they
Teenager getHangout
back from work. You might want to send them
with friends, but keep it affordable. an offer of a
discount on all orders before 7 o’clock.
Round the corners customers local customers have lower delivery costs so you can afford to
make fairly aggressive offers to this group.

Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their
values. The customer’s expect the brand to enhance their self-image. Customer responses
obtained at the Patna (Bihar) outlet confirmed the fact that they connect strongly with the brand.
However, fulfilling some of the customer expectations like a broader product variety provides
TFK’S a great scope for improvement.

Market Analysis Summary

Instead of building a business around a preconceived concept, we conducted market research and
built a concept around our consumers. Our market analysis identified the following key drivers as
areas of opportunity to service U.P's restaurant customers:

1. Portion Selection: Nearly 95% of our surveyed focus group endorsed having a choice of
different size portions. This statistic is in line with findings reported by the Table service
Operator Survey. TFK’S's Tapas concept is built to offer different-sized portions. Our
customers want the option to choose what satisfies their appetite.

2. Menu Variety: Ethnic restaurants are increasing in U.P. The proliferation of


international cookbooks, food magazines, TV cooking shows and imported goods offers
ample evidence that America, as a whole, is currently on an international tasting spree. In fact,
eating places that identify themselves as ethnic establishments numbered nearly 78,000 in
1999 and recorded sales of Rs.30.5 billion. Our research results do not identify any single
ethnic style of restaurant as desired, but rather suggest that incorporating strong multi-ethnic
influences in the menu selection will be popular. Again, variety is the underlying element for
this concept.
3. The Dining Experience: Customer satisfaction with food and service has been and
continues to be of utmost importance, but our findings indicate that the decor, lighting, bar,
and other options to improve the dining experience are also factors in customer decisions.
TFK’S takes all these factors in consideration for the design of this cosmopolitan restaurant

4. Reasonable Prices: This was no surprise given the economic tide. Although the
restaurant industry as a whole has seen growth in 2009/2010, customers are demanding value
for their dining money. TFK’S's menu is priced at a mid-tier level, with no entrée over Rs.200.
In addition we have an extended Tapas and Appetizer selection priced between Rs.350 -
Rs.950, allowing budget dining in a full-service restaurant.

Market Segmentation
TFK’S's Restaurant & Lounge intends to cater to a wide customer base. We want
everyone to feel welcome and entertained.

 Demographically :-

1]Cater to kids
2] youth
3]Urban upper & Middle class families.

 Geographically :-

1]Mainly in lucknow town.


 Psychographic:-

1]Place to chill out with friends and families


2]Place for enjoyment of the kids

We have defined the targeted segments that contribute to our growth projections:

1. The Business Person


2. Downtown U.P Couples
3. The Destination Customer
4. High-End Singles
5. Tourists

These particular market segments are 25-45 years old, have disposable income, and are seeking
upscale, trendy, and comfortable restaurant options. These are the types of people who frequent
other restaurants and bars in the area. They are likely to spend more on experiences they perceive
as unique, cosmopolitan, and sophisticated. They are also the most open to trying something new,
food wise, and will embrace our international fusion cuisine.

Market Analysis

2011 2012 2013 2014 2015


Potential
Growth CAGR
Customers
Business
18% 9,925 10,223 11,348 11,688 12,039 4.95%
Person
Downtown
32% 17,645 18,527 20,565 21,593 22,673 6.47%
U.P Couples
Tourists 13% 7,168 7,311 7,896 8,054 8,215 3.47%
The
Destination 8% 4,411 4,499 4,724 4,818 4,914 2.74%
Customer
High-end
29% 15,991 16,950 18,815 19,944 21,141 7.23%
Singles
Total 5.76% 55,140 57,510 63,348 66,097 68,982 5.76%
Market Profile (Pie)

Target Market Segment Strategy

The Business Person: They work hard all day and often stay overnight in a strange city. They
need a competent establishment that helps impress clients and prospects. Afterward, they want to
relax and use the money they are making (or is expensed by their company). They spend the most
on drinks, food and tips. TFK’S's cosmopolitan flair and comfortable atmosphere will be perfect
for sophisticated business people, whether they live in and around U.P or are here for work.
Lucknow couples: The restaurant will have an intimate, romantic, enticing adult atmosphere that
suggests "date." TFK’S's will be the best date location in town. These young Lucknow couples
are generally very successful working professionals. In most cases they are budgeting to eat out
on a regular basis, as they don't have the time to prepare food nightly.
The Destination Customer: U.P is a very 'sectioned' city, and consumers often look only in their
own neighborhoods for restaurant options. TFK’S will break these habits, using marketing to
draw customers from outside the main city limits. TFK’S will be a destination restaurant. Our
Destination Clients tend to be new suburbanites that miss the excitement of the inner city. They
have disposable income, and will spend quite a bit on such outings. TFK’S's will be especially
appealing to married suburban couples indulging themselves with a "date night" downtown, away
from the kids. Many of these consumers are new to U.P from larger cities, accustomed to dining
within the city and at non-franchised restaurants.
High-end Singles: We will attract them with our eclectic atmosphere and layout. Our
international menu, striking decor, entertainment and events, excellent service and engaging
clientele will confirm the feeling of being in "the in place" in U.P. These are the individuals that
pride themselves on socializing and dining at the premier locations.

Tourists: U.P attracts many vacationers during the summer months of May through September.
TFK’S's will be a destination dining locale, with its attractive atmosphere, international menu,
and lounge. A large percentage of the tourist populations are vacationing singles, here to socialize
and be entertained. This is especially true for the tourist population that visits for sporting and
social events - they are not interested in family establishments.

Service Business Analysis


The restaurant industry is highly competitive and risky. The owners know this through their many
years of experience opening, running, and improving restaurants across Northen India. Most new
restaurants opened by inexperienced owners struggle or fail. However, those based on solid
understandings of the market needs, and management of inventory and staff have a much higher
chance of success, especially when combined with prior experience in the restaurant industry.
Restaurants make money by taking inexpensive ingredients, combining them in creative ways,
cooking them properly, and selling them at a much higher price. Any ingredients wasted in the
kitchen are money thrown out. Any time wasted in seating customers, taking orders or preparing
food is money walking away. While some entrepreneurs think that success is as simple as a good
location and a trendy concept, we know the truth:
To succeed in the restaurant industry, you need an understanding of the risks and financial
conditions, the ability to handle enormous pressure, and the organizational skills to bring
off what is essentially a giant catered party, two to three times a day.

Competition and Buying Patterns


In 2003, the top ten U.P restaurants shared two things: cozy, hip interiors and reasonably priced,
regionally specialized menus. Only one of them offered traditional "southern" cooking. And half
of them were located in Lucknow. Our competitors are heading in the right direction, but only
TFK’S is based on sound market research in the local market.
U.P consumers are seeking variety and new experiences. Location is clearly important, but so is
atmosphere and distinctiveness. Our marketing challenge is thus to stand out from our
competitors, not only as the "new" restaurant, but as one that offers consistently high quality
food, menu variety, and a unique atmosphere. Maintaining our edge will depend partly on
marketing ourselves as an adult-only destination, and not a family restaurant.

Strategy and Implementation Summary


Our strategy is simple. We intend to succeed by giving people a combination of excellent and
interesting food in an environment that appeals to a wide and varied group of successful adults.
We will focus on establishing a strong identity in our community with a grand opening. Our main
focus in marketing thereafter will be to increase customer awareness in the surrounding
communities. We will direct all of our tactics and programs toward the goal of explaining who we
are and what we do. We will keep our standards high and execute the concept flawlessly, so that
word-of-mouth will be our main marketing force.
We will create an appealing and entertaining environment with unbeatable quality at an
exceptional price. As an exciting and eclectic restaurant, we will be the talk of the town.
Therefore, the execution of our concept is the most critical element of our plan.
All menu items are moderately priced for the area. While we are not striving to be the lowest-
priced restaurant, we are aiming to offer exceptional food at reasonable prices for the average
restaurant diner.

Competitive Edge
TFK’S's competitive edges are:

1. The owners' thorough understandings of opening and running a restaurant


2. An extraordinary contemporary restaurant design
3. International menu with featured menu changes every 4 months
4. Unique, 3-Tiered spatial layout
5. Chef Co-op program to allow new entrants, trainee and featured chef
6. Chef/Management Stock Incentive Program.
7. Inner and Outer City Marketing campaign (i.e. "Come to Town" promotions)
8. Employee Training, Incentive and Retention program

Competitor Analysis
Below are excerpts from our competitive analysis study.
1. The MotiMahal (Direct Competitor):
We were able to draw some conclusions from this analysis that helped defined the concept and
positioning for TFK’S:
1) Keep the menu pricing modest but offer superior food quality and presentation. We plan to
keep the menu prices under Rs.300) Lucknow is a prime restaurant location. One Lucknow
Kitchen is in an obscure location but has thrived as one of the more successful restaurants in the
area; and 3) The customer base in this segment of U.P is ready for after-hours dining, and is
willing to travel to establishments that accommodate their needs.
2. Gemini Continental (Direct Competitor):
This restaurant is a main competitor for TFK’S, a casual dining restaurant that has evolved to be
a great success story for the Lucknow district. This restaurant served to validate 1) the tapas
concept appeal for Lucknow customers; 2) the evolving need for after-hours dining; 3) tapas as a
good food concept for after-hours dining (smaller portions, smaller price); 4) the appeal of live
Entertainment.
3. Aryans (Indirect Competitor)
This restaurant has grown in popularity over the years, and has gained popularity as a destination
restaurant that can cater to business professionals as well as the local residents. The menu is
somewhat formal for this market segment, but the bar attracts a good crowd. During this study it
was evident that some patrons came exclusively to sit at the bar, without any intent of dining in
the restaurant.
Aryans is more of a formal dining restaurant and meets a certain need within the community, but I
don't see it as a direct competitor of TFK’S. I do feel that it has some very special elements that
have helped it succeed over the past 3 years, which TFK’S can benefit from.

Failed Restaurant Analysis: AM-PM

AM-PM was an U.P restaurant attraction in the downtown core, a strong competitor that was
severely impacted by the patronage demise after sometime of opening. I also completed an
analysis of this restaurant back in 2004 and compared it to this current analysis in 2008. Several
factors led to closing of this restaurant:
Location:
This was a very cosmopolitan restaurant located in a core business community. The restaurant
was hidden in cross streets and away from the general street traffic. This was a destination
restaurant and a secondary selection for the general customer base in this area.
Lesson Learned: As part of this analysis, we have determined that the downtown core is not a
good fit for the TFK’S concept. We will limit our site selection to the core Lucknow district and the
upper Downtown district. Lucknow is U.P's major growth district and is developing the residential
infrastructure in pace with the business infrastructure.
Customer Segment:
U.P's downtown core is not ready for this type of restaurant. U.P's downtown core is a business
district, and residential development for this area is at the Genesis state. The primary customer
base is the business person and tourist. The largest percentage of this customer segment will be
looking for a restaurant in which to conduct business or a family establishment; AM-PM would not
be a primary selection in either case.
Lesson Learned: TFK’S's target market demographics are perfectly in alignment with the
Lucknow profile. Lucknow has a business core as well as a residential core. We will look to the
business core for our primary daytime business, but to our residential core for our dinner and
after-hours patronage. In addition, the business core will look to TFK’S as a place of socialization
for dinner and after-hours unwinding. AM-PM depended on the business segment for their lunch
and dinner profits, and customers who would travel from outside the downtown district to eat at
the restaurant - there was no static dinner segment.
Visibility:
Hand-in-hand with location, this restaurant also suffered from poor visibility. In the downtown core
a large percentage of business is from walk-in traffic. The business and tourist customers tend to
select a restaurant from touring the area and accessibility. AM-PM was situated on a cross street
behind the main street.
Lesson Learned: Although being situated on a main street is not as key in the Lucknow district,
we will ensure that visibility is part of our site selection criteria. In addition, we will use signage
and exterior decor as means to attract customers and get noticed.
In all, this restaurant was a staple in U.P's downtown core for over 10 years, but key restaurant
disciplines (Location, Customer Segment, Visibility) came back to hurt them as the economic
climate changed.

Market Analysis Conclusion:


At the end of the day, everyone that sells prepared meals in this district is a TFK’S competitor,
because we all compete for the same home meal replacement dollar. However, there are two
segments of the restaurant industry that are our main competition: the casual dining restaurant
and the fine dining value restaurant.
So, if the food and service is better at a fine dining restaurant than a casual restaurant, but price
has become a factor as a result of the economic turns, where is a customer more likely to go?
There is no absolute answer to the question, but the solution is to deliver the best food at the best
price with the highest level of service in one establishment. This is the very definition of value and
the concept at the heart of TFK’S's business model.

Marketing Strategy
TFK’S Restaurant & Lounge's Marketing strategy will be to promote our electric food, superior
service, and exciting concepts to draw in the local repeat customers. Marketing initiatives will
concentrate on the following:
Building and Signage:
The most important Marketing tool that we have is the exterior of our building, and our new sign.
We budgeted a great deal into the renovations and decor to generate the aesthetic appeal of
TFK’S. See attached Logo and Web design.
Customer Service:
In our years within the restaurant industry, customer service has always been the major draw for
the dining clientele. Food and atmosphere is far out-shadowed by superior customer service that
turns a new customer into a repeat customer.
Management will demand the wait-staff provide the very best in quality services to the customer,
making certain that they are content and satisfied with their dining experience. Wait-staff are
thoroughly trained, and every 90 days they undergo a performance appraisal. This is part of our
Employee Manual, and Operations Manual guide.
Advertising and Promotion:
Our Advertising Plan and media schedule call for targeting customers directly through local
publications aimed at , respectively, singles, couples, and destination customers.
Management recognizes the key to success at this time of initial opening is extensive media
promotion. This must be done aggressively in order to accomplish our service goals. A healthy
budget is allocated for the first year. A primary part of the budget is allocated to create the media
and customer buzz for the month prior to opening and the next three months after the grand
opening. The full Marketing program is as follows:.

Media Objectives and Strategy:

Establish our image as a unique Lucknow restaurant with great service, value, and great food
served in an eclectic atmosphere. We will maximize efficiency in the selection and scheduling of
advertisements by:



• Selecting primary business publications with high specific market penetration, using The
Creative Loafing Dining Section, The U.P Journal Constitution, U.P City Search, and
Social Diva, which all reach our targeted demographics.
• Scheduling adequate frequency of ads to impact market with menu items and
promotions.
• Where possible, positioning advertisements in or near entertainment/food related
editorial.
• Redirecting customers to our website to register for upcoming functions, VIP lists,
reservations, and flash media promotions.
• Maximizing ad life with monthly and weekly publications.

Working with The Reynolds Group Media Co. (TFK’S Advisory Board), we will develop an
advertising campaign built around our TFK’S Diner theme, menu offering, location, and decor. We
will support this plan with ads that reinforce the TFK’S dining concept.
Additionally, we will develop a consistent reach and frequency throughout the year, targeting
each specific customer segment within a five-mile radius, and new 'suburbanites,' who still
appreciate in-town dining.

Promotional Campaign:

The best way to reach our potential customers is to develop an intense advertising campaign
promoting our TFK’S concept of "Spice of Life." In addition to standard advertising practices, we
will gain considerable recognition through newspapers, newsletters and public announcements.
Consumers will be encouraged to visit our website to be greeted with a flash media intro that
highlights the restaurant, past happenings, upcoming attractions and our dynamic menu.
Our periodic customer surveys and weekly menu item sales evaluations will help us to
understand what advertising is working and what is not; basically, who we are reaching. Our goal
is to understand our customer, measure the success of our direct marketing and media activities,
and redirect advertising as effectively as possible.

Publicity Strategy:

Working with The Reynolds Group, TFK’S will focus on the following publicity strategies:

• Develop a sustained public relations effort, with ongoing contact between key editors and top-
level personnel at local dining publications. Develop a regular and consistent package update
program for the major target media, keeping key editors abreast of all new promotions, and
menu introductions.
• Establish contact with editorial staff for the purpose of being included in entertainment "round-
ups"--product comparisons in dining publications and the local papers.
• Produce a complete TFK’S Restaurant history and menu offering piece to be used as the
primary public relations tool for all target media editorial contact. This will also be effective for
inclusion in press kits.

Press Release/Grand Opening: TFK’S Restaurant will release a series of press releases on the
Grand opening.
Editorial Visitation: Leading up to the Grand Opening, and over the first 6 months of operations,
we will invite the most influential reporters and editors from all local publications to TFK’S
Restaurant in order to evaluate our menu, service, and atmosphere.
Publicity Revenues: We anticipate at least 10% of our annual sales will be generated directly
from our publicity. A full media kit will be sent to all local publications, and releases on new menu
items will be made monthly.
Community: TFK’S will look for key opportunities to pair with local community development
organizations and radio stations to interface with our customers We will continually look for local
community programs in which we can participate, in order to better our community, and give
something back.

Marketing Program
In line with our Marketing strategy, we will employ three different marketing tactics to increase
customer awareness of TFK’S: In-Restaurant Marketing, Public Relations Marketing, and Media
Marketing. Our most important tactic will be word-of-mouth/in-restaurant marketing. This will be
by far the cheapest and most effective of our marketing programs.

Word-of-mouth/In-Restaurant Marketing

• Restaurant Night: Every first Monday of the quarter, we will have a special evening for
restaurant people. A perfect night for the local area's restaurant owners, chefs and staff to
get together to discuss the market and food trends, and possible Co-op efforts to promote
the Lucknow district. This is not a conflict of interest, it is an effort to increase visibility and
patronage across the Lucknow district. We will also invite the Lucknow Alliance committee
for their participation.

• Monthly Dating Connection: With the increasing appeal of Internet and speed dating,
the restaurant will offer a monthly dating night. In addition to food and beverages, customers
can choose from an array of dating packages up for auction.

• Wait Area Marketing: Wait staff will service appetizers to customers waiting to be seated
or on the wait list.

• Live Entertainment parties


• Special Events
• Valentine's Day
• TFK’S Holi party
• Wine tasting weekend
• TFK’s Diwali Fiesta
• New Year's Eve party

Public Relations Marketing

• India Hospitality & Tourism V.I.P. Party: We will host a V.I.P. Dinner before the 'Grand
Opening.' This will serve the dual purpose of training our staff and introducing ourselves to
the community. The list of individuals we will invite comes from the Chamber of Commerce,
India Hospitality & Tourism, and Lucknow Development group. We want their full
commitment to the restaurant.

• Critics' Choice: Prior to the Grand Opening there will be two preliminary parties catering
to the Media and Critics community. We will encourage the media and restaurant critics to
meet at the restaurant and review the decor, service and food. This will be a preliminary
review, where we will consider constructive input to make minor revisions prior to the true
Grand Opening. This initial review and input will give critics and media commenter’s a stake
in TFK’S's success, through their contributions to the final design.

• Brochures: Make a brochure for the in-town hotels and business establishments to
provide to their guests and staff, containing interior pictures of our restaurant, menus and
prices.

• Government Relations: There are several Government offices in the
Lucknow/Downtown area. We will approach them to cater business luncheons and private
functions. This will offer us higher visibility for future functions and community events. Word-
of-mouth referral is very powerful and particularly amongst the business community.

• Private Functions: Target marketing to businesses for regular business lunch and
dinner entertaining, and private functions.

Media Marketing

• Newspaper campaign: A very targeted media campaign to obtain featured articles about
the restaurant in their Living, Entertainment and Dining segments. Notices of all live
entertainment segments and special features will be posted to local newspapers' calendar
announcements.

• Restaurant and Special Events Website: We have contracted with local design teams to
deliver a high-quality, navigable, constantly updated website.

• Media Relations: Several media relations teams will be utilized to market the Restaurant.
Social Diva and Green Frog are two media companies we will utilize for media relations.
Both companies have an insightful presence and connection with our target market.

• Billboard Advertisement: One month prior to the opening, distinct billboard ads will
advertise the launch of the Restaurant.
• Inner & Outer City Marketing: We will budget to attract customers from the suburbs.

Sales Strategy
Our strategy is simple: we intend to succeed by giving our customers a combination of delicious
and interesting food in an appealing environment, with excellent customer service, whether on
their first visit or their hundredth.
Our marketing strategies are designed to get critics and initial customers into our doors. Our
sales strategies must take the next step and encourage customers to become repeat customers,
and to tell all their friends and acquaintances about the great experiences they just had at TFK’S.
New restaurants often make one of two mistakes: they are unprepared or under prepared for
opening, and initial poor service, speed, or quality discourages customers from returning, or they
spend all of their efforts at opening, and are unable to maintain the initial quality customers
expect on return visits, decreasing word of mouth advertising and leading to poor revenues.
TFK’S's sales strategy requires consistently high quality food, service, speed, and atmosphere.
We can accomplish this by:

• Hiring employees who genuinely enjoy their jobs and appreciate TFK’S's unique offerings
• Continually assessing the quality of all aspects mentioned above, and immediately
addressing any problems ,Interacting with our customers personally, so they know that their
feedback goes directly to the owners ,Evaluating food choices for popularity, and keeping
favorites on the menu as we rotate seasonal foods and specials

Sales Forecast
The following sales graph is based on first year start-up estimates only. We anticipate that the
business will not be at full operating capacity until the sixth month of operations. This is due to the
competitive nature of the market and existing customer loyalty. All factors governing our sales
progress are outlined below in the Important Assumptions section.
Our sales forecasts for years 3 through 5 are very conservative, compared to industry standard
growth rates.
Although we hope to do catering for local businesses and government offices with time, we will
insist on payment at delivery - we will not sell on credit.

Web Plan Summary (www.tfk’s.in)


TFK’S Restaurant & Lounge will have a dedicated website. It will be the virtual business card and
portfolio for the company, simple, contemporary and well designed. Our site will offer our menus,
prices, reviews and happenings at TFK’S. We will also have a monthly Paparazzi Review about
what did happen at TFK’S to get new customers interested in our restaurant.
Our website will be used to try out new offers, starting with an on-line order feature for the
Sunday Market Brunch, and expanding if the concept gains favor with our customers. A customer
will be able to order a selection for pickup using a credit card. Selections will be based on our pre-
packaged meals available during the Sunday Market Brunch. This is also a potential for
customers needing catering.
The website will include email capabilities and online reservations and special events scheduling.

Management Summary

The strength of our management staff positions us for success. We have assembled a team that
embraces different disciplines, accomplished professionals with expertise in all areas of the
business, including marketing and restaurant management.
The owners, Mr. Varun Mishra, Mr. Rishabh Kedia, Mr. Tarun Srivastava, and Mr. Rohan
Srivastava , have considerable experience in the restaurant industry.
In Year 2, we will hire a General Manager to handle the day-to-day Restaurant management. This
will assist TFK’S's Restaurant & Lounge to grow even further.
You can't build investor confidence based on what you will do, but you can inspire confidence
based on what you have done. These TFK’S Management teams has deep roots in the
restaurant segment, and have the practical experience to make this venture another great
success.

Management Team

TFK’S Restaurant & Lounge understands the importance of a strong management team. The
strength of our management staff positions us for success.
Day to day operational management will be conducted by Mr.Varun, as hands on manager.

TFK’s Ownership & Management

Varun Mishra- Managing partner


(Operations Management)
Mr. Varun has a background in Corporate Business Management and Business Start-ups, and is
certified in Restaurant and Hotel Management. As co-owner, Varun Mishra is responsible for
overall direction and operational management. He is a strong business leader responsible for
strategic planning and continued growth of restaurant services and business development. Also,
he is responsible for the concept and the daily operations management, with yearly sales targets
of Rs.7 million.

Degrees, Certifications, and Professional Affiliations:

• MBA in Corporate Business Management


• B.S. in Computer Science
• Certified in Restaurant & Hotel Management from Lucknow University
• PMP (Project Management Professional) certification
• Member of the Lucknow Alliance
• Business partner member of the National Restaurant Association.

• Rohan Srivastava- Managing Partner


• (marketing management)

Mr. Rohan is a highly accomplished Marketer he specializes in the field with tons of
personal and professional experience in his 5 year old but illustrious career in marketing.
He is also a former partner and owner of Madhuban restaurant. He is responsible for all
the marketing activities of the restaurant and so far many innovative plans, suggested by
him have been implemented, and the restaurant has become the talk of the town even
before its launch.

Degrees, Certifications, and Professional Affiliations:

MBA in Corporate Business Management

B Sc in Computer Science and Statistics


Member of the restaurant Association

Rishabh Kedia : Managing Partner


(Financial management)
He will manage all the Financial and investment functions of the TFK’s. Mr. Rishabh is an
accomplished restaurateur, having owned several full-service restaurants. His contracting
responsibilities include site and lease negotiations, start up and financial fore cast, we are aware
that successful ventures in the restaurant industry must balance capitalizing on new trends with
continual quality assessment. Kedia's understanding of day-to-day cash flow planning and staff
management will be critical to TFK’S's financial success.
Degrees, Certifications, and Professional Affiliations:
MBA in Corporate Management
B Sc in Computer Science and Statistics
Member of the restaurant Association
Diploma in accountancy techniques

Tarun Srivastava : Managing Partner

(Human Resource Management)


Tarun is responsible for looking after the Human Element of the TFK’s as it’s the soul of
restaurant business. He is responsible to look after the HR related issues and about the
performance evaluation of the staff, hiring and firing would also be controlled by him
Degrees, Certifications, and Professional Affiliations

MBA in Corporate Management


B Com in Economics
Member of restaurant association of India

Managing Partner Responsibilities


In addition to the management of day to day operations, both managers, as principals within the
company, will oversee menu development, purchasing, portioning, pricing and inventory control,
including approval of all financial obligations of the company. They will plan, develop, and
establish customer service policies and objectives, and write, explain, and enforce an employee's
manual for all employee-related policies.
Responsibilities for hiring and firing employees lie solely with the two operations managers, and
any decisions in these areas will be made jointly.
They will:

• Manage working capital, including receivables, inventory, cash and marketable


securities.
• Perform financial forecasting, including capital budgeting, cash flow analysis, pro forma
financial statements, and external financing requirements.
• Prepare financial analyses of operations for guiding management, including reports
which outline the company's income, expenses, and earnings.
• Direct preparation of budgets and financial forecasts and arrange for audits of
company's accounts.

Human
Resou
rce
Management
Human resource management
The restaurant business requires exceptional Human Relation Skills to deal with the
everyday customer and to provide them with the exquisite service of high quality so as to
lift their spirits. We would hire a specialized work force to achieve the optimum levels in
the services we provide. There would be adequate staff to look after the customers and
provide them with the best service in the region, and to pamper their senses and taste
buds so that we are able to build a loyal customer base who would also spread our name
by word of mouth and provide with the best form of advertisement and customer base.
We would also keep in mind that our staff is well taken care of and their problems are
sorted out in the initial stages and no grievances exist that may affect their performance
and working capacity.

Personnel Plan

We believe the personnel plan is in good proportion to the size of the restaurant and projected
revenues. The staff will include 13 full-time employees and 8 part-time employees, who will work
a total of 754 man hours per week and generate an average monthly gross payroll of Rs.27,308
for the first year in business. The estimated gross annual payroll of Rs.399,588 (including Partner
Salaries) is 37% of total sales.
Wage salaries for service personnel (wait staff, waitresses, bouncers and bartenders) do not
include anticipated tips. With average tipping rates for the U.P, India area, and our menu prices,
service employees should average at least twice the minimum wage in any given shift. Skilled
waitresses and bartenders on weekends and evenings will make substantially more.
Kitchen:
The Executive Chef will be assisted by:

• An Assistant Chef from a national search (1).


• A Sou chef with considerable experience in different restaurants (1).
• Cooks that work directly with Peter or the sous chef (2).
• Prep cooks/dishwasher (2).
• People cleaning the restaurant (2).

Administrative Salaries (Partners):

10 % profit to be shared by each of the four partners


Personnel

Personnel Plan
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
General Manager (Year
Rs.0 Rs.0 Rs.28,000 Rs.28,500 Rs.29,000
2+)
Partner/Manager Rs.48,000 Rs.48,000 Rs.48,000 Rs.48,000 Rs.48,000
Partner/Asst.
Rs.32,160 Rs.32,160 Rs.32,160 Rs.32,160 Rs.32,160
Manager/Exec. Chef
Hostess (Full Time) Rs.24,000 Rs.24,500 Rs.25,000 Rs.25,500 Rs.26,000
Hostess (Part Time) Rs.13,200 Rs.13,500 Rs.14,000 Rs.14,300 Rs.14,800
Waitperson 1 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 2 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 3 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 4 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 5 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 6 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 7 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 8 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Waitperson 9 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640 Rs.5,640
Wait/Barperson Rs.10,440 Rs.10,440 Rs.10,440 Rs.10,440 Rs.10,440
Bartender 1 Rs.14,400 Rs.14,400 Rs.14,400 Rs.14,400 Rs.14,400
Bartender 2 Rs.7,200 Rs.7,500 Rs.7,500 Rs.7,500 Rs.7,600
Busboy 1 Rs.9,120 Rs.9,120 Rs.9,120 Rs.9,120 Rs.9,120
Busboy 2 Rs.11,760 Rs.11,760 Rs.11,760 Rs.11,760 Rs.11,760
Busboy 3 Rs.7,200 Rs.7,200 Rs.7,200 Rs.7,200 Rs.7,200
Assistant Chef Rs.44,400 Rs.44,400 Rs.44,400 Rs.44,400 Rs.44,400
Sous Chef Rs.32,400 Rs.32,400 Rs.32,400 Rs.32,400 Rs.32,400
Cook 1 Rs.24,240 Rs.24,240 Rs.24,240 Rs.24,240 Rs.24,240
Cook 2 Rs.18,960 Rs.18,960 Rs.18,960 Rs.18,960 Rs.18,960
Prep Cook/Dishwasher Rs.12,288 Rs.12,288 Rs.12,288 Rs.12,288 Rs.12,288
Prep
Rs.12,960 Rs.12,960 Rs.12,960 Rs.12,960 Rs.12,960
Cook/Dishwasher/Cleaning
Dishwasher 1 Rs.8,640 Rs.8,640 Rs.8,640 Rs.8,640 Rs.8,640
Dishwasher 2 Rs.5,700 Rs.5,800 Rs.5,800 Rs.5,800 Rs.5,800
Cleaning/Dishwasher Rs.11,760 Rs.11,760 Rs.11,800 Rs.11,800 Rs.11,800
Open Rs.0 Rs.0 Rs.0 Rs.0 Rs.0
Total People 20 24 25 25 25

Total Payroll Rs.399,588 Rs.400,788 Rs.429,828 Rs.431,128 Rs.432,728


Financial
Ma
nagent
Financial Plan
TFK’S Restaurant & Lounge financial model is based on a business concept to "Plan for the
Worst, but Manage for the Best." We have approached the financial plan as follows:
The First Year projections anticipates a below average sales volume, below average seat turn,
and above average food/beverage cost. This position will help us ensure sufficient financial
planning to accommodate a reasonable ramp-up period, and business success, also ensuring
that we do not enter this venture under-capitalized.

Financial Pro Forma


TFK’S is investmenting Rs.20,00,000 for renovations, furniture, kitchen equipment, liquor license,
food & restaurant supplies, legal fees, working capital, marketing and personnel.
The Financial Plan includes:

• Important Assumptions:

• Risk Analysis & Mitigation Plan
• Sales Forecast
• Break Even Analysis
• Profit and Loss Statement
• Cash Flow Statement
• Balance Sheet

Risk Analysis/Mitigation
1. How do we allow an adequate startup period and capital to launch the concept and grow
our customer base in a competitive sector?
Our financial plan is budgeted to support the Worst-Case business scenario. We addressed the
financial risk as follows:

• We looked at our monthly break-even.


• We calculated worst-case monthly financial shortfall based on the ramp-up sales
percentages outlined in our financial assumptions.
• We budgeted operational shortfall in an operational contingency budget that we will utilize
if the need arises.

2. How do we ensure we have addressed all resource gaps, and have the right industry
knowledge?
The Financial Plan incorporates a budget for an U.P Restaurant Consulting group. Their services
are budgeted for the business start-up analysis, rollout, and on retainer for 4 months of business
operations. The selected firm has experience with over 72 Restaurant launches, specializing in
the U.P Market.
We will be recruiting a seasoned chef (national search) whose style is in accord with the
Restaurant concept and our market segment. We will be offering an equity interest to our select
Chef to maintain the industry knowledge.
Our Accounting service will be contracted to a firm specializing in Restaurant accounting.
3. The current Economic slowdown and recovery state was a key consideration in our
restaurant concept. How do we manage a successful restaurant in current market
conditions?
Our original effort was to open a restaurant twice the proposed size. As we are in the midst of an
economic recovery, we have scaled back the size to reduce business overhead, startup
requirements, and business operating capital.
Another mitigation has been our overall Restaurant concept. We have the menu priced at a mid-
tier level with no entrée over Rs.20. In addition, we have an extended Tapas and Appetizer
selection priced between Rs.3.50 - Rs.9.50, allowing budget dining in a distinguished restaurant.
4. How do we confirm that our Funding Requirement is sufficient?
Rishabh Kedia has an extensive background in restaurant startup. He is currently an International
Consultant for various restaurant ventures, and we will use his expertise in past projects as a
comparative basis.
We have leveraged our membership with the National Restaurant Association to look at industry
averages for this market segment for Restaurant startup and Operations. Additionally, we
included a contingency buffer in the financial estimates to account for any potential cost variance.
We have worked with our Restaurant Consulting firm to validate our cost estimates to their
industry knowledge.
5. How do we know we have selected the right location for this concept?
Again we will draw on the Consulting group that has the expertise in site selection and lease
negotiation. In all, there are no guarantees with location, but we took a very objective approach
with our concept. Instead of going in with a predefined business concept, we let the Market
Analysis define the need. Based on the results, the TFK’S Restaurant concept was formed
specific to Lucknow U.P. Site selection was based on space, visibility, and functionality; the city
grant award confirmed our decision.
6. What if there is an additional need for Business Capital after the Restaurant has
exhausted its 6-month buffer?
Our intent is to be a self-sufficient business far in advance of the 6-month probation period. But
as we are considering all contingencies, we have looked at this risk. We have accounted for an
operational contingency budget that will be used to supplement any slow periods. Our next step
would be to approach our private investors for capital by extending their return on investment. We
would also look to the partners' capital reserves as another source of funds.
Break-even Analysis
For our First Year Break-Even Analysis, we have an average running fixed costs of Rs.60,230 per
month which includes our full payroll, rent, and utilities, and an estimation of other running costs.
With direct cost of goods (inventory, in this plan) at 35% of sales, our monthly break-even point is
Rs.92,081. We will surpass our break-even point in October of our first year.
As we exit the start-up phase of the business and focus on cost control, we will drive the Cost of
Goods Sold (COGS) down, dropping our break-even value, and increasing our Gross Margin.

Break-even Analysis
Break-even Analysis

Monthly Revenue Break-even Rs.92,081

Assumptions:
Average Percent Variable Cost 35%
Estimated Monthly Fixed Cost Rs.60,230

Profit and Loss Statement

The most important assumption in the Projected Profit and Loss statement is the gross margin.
We show an adjustment increase in Year 2 as we exit our start-up phase of the business and
move into our expected annual sales forecast.
This transition shows the restaurant managing through its start-up period, and gaining efficiency
and customer loyalty. In summary, the restaurant will develop its customer base and reputation
and the growth will pick up more rapidly towards the second and third years of business. Month-
by-month assumptions for Profit and Loss are included in the appendices.

Profit and Loss

Pro Forma Profit and Loss


FY 2011 FY 2012 FY 2013
Sales Rs.1,211,088 Rs.1,279,204 Rs.1,341,260
Direct Cost of Sales Rs.398,407 Rs.406,976 Rs.415,276
Other Rs.0 Rs.0 Rs.0
------------ ------------ ------------
Total Cost of Sales Rs.398,407 Rs.406,976 Rs.415,276

Gross Margin Rs.812,681 Rs.872,228 Rs.925,984


Gross Margin % 67.10% 68.19% 69.04%
Expenses
Payroll Rs.400,788 Rs.429,828 Rs.431,128
Marketing/Promotion Rs.22,000 Rs.25,000 Rs.15,000
Depreciation Rs.6,500 Rs.6,500 Rs.6,500
Leased Equipment Rs.12,000 Rs.12,000 Rs.12,000
Accounting/Payroll Processing Rs.6,600 Rs.6,600 Rs.6,600
Legal Retainer Fees Rs.2,400 Rs.2,400 Rs.2,400
Business Licenses & Permits Rs.6,000 Rs.6,000 Rs.6,000
Credit Card Expense Rs.19,983 Rs.21,107 Rs.22,131
Bank Fees Rs.1,200 Rs.1,200 Rs.1,200
Music & Entertainment Rs.3,744 Rs.3,744 Rs.3,744
Training / Employee Retention
Rs.5,008 Rs.6,008 Rs.6,008
Programs
Repairs & Maintenance Rs.9,000 Rs.9,000 Rs.9,000
Utility Services
Rs.26,496 Rs.27,821 Rs.28,933
(Gas/Electric/Water/Sewer)
Telephone/Communication Expense Rs.1,800 Rs.1,800 Rs.1,800
Insurance:
Rs.21,624 Rs.22,705 Rs.23,613
Fire/Theft/Liability/Liquor/Product
Restaurant Occupancy Cost (Lease) Rs.77,250 Rs.79,568 Rs.81,955
Payroll Taxes (FICA/FUTA/SUTA) &
Rs.66,531 Rs.71,351 Rs.71,567
Employee Benefits
Exterminator/Trash Removal Rs.4,800 Rs.4,800 Rs.4,800
Dishware/Uniforms/Cleaning
Rs.12,466 Rs.13,089 Rs.13,612
Supplies/Décor
Printing/Paper/Postage/Subscription
Rs.9,500 Rs.9,500 Rs.9,500
s
Facility (Exterior Cleaning/Grease
Rs.3,640 Rs.3,640 Rs.3,640
Trap/Hood/Windows,etc.)
R&D Meals Rs.2,400 Rs.2,400 Rs.2,400
General Business Comps Rs.22,850 Rs.23,125 Rs.23,125
Owner Comps Rs.2,124 Rs.2,124 Rs.2,124
Other Expenses (ComAreaMaint,
Rs.4,200 Rs.4,200 Rs.4,200
etc.)
------------ ------------ ------------
Total Operating Expenses Rs.750,903 Rs.795,509 Rs.792,981

Profit Before Interest and Taxes Rs.61,778 Rs.76,718 Rs.133,004


EBITDA Rs.68,278 Rs.83,218 Rs.139,504
Interest Expense Rs.15,984 Rs.12,640 Rs.9,296
Taxes Incurred Rs.13,738 Rs.19,224 Rs.37,112

Net Profit Rs.32,056 Rs.44,855 Rs.86,595


Net Profit/Sales 2.65% 3.51% 6.46%
Cash Flow Statement
The cash flow depends on assumptions for inventory turnover and payment days. We have no sales on
credit, so our cash flow does not track accounts receivable. Our projected same-day collection is critical, and
is reasonable and customary in the restaurant industry. We do not expect to need any additional financial
support, even when we reach the less profitable months, as the downturns are incorporated into the monthly
revenue variance figures. Month-by-month assumptions for projected cash flow are included in the
appendices.

Cash Flow
FY 2011 FY 2012 FY 2013 FY 2014
Cash Received

Cash from
Operations
Cash Sales Rs.1,073,769 Rs.1,211,088 Rs.1,279,204 Rs.1,341,260
Subtotal Cash
Rs.1,073,769 Rs.1,211,088 Rs.1,279,204 Rs.1,341,260
from Operations

Additional Cash
Received
Sales Tax, VAT,
HST/GST Rs.0 Rs.0 Rs.0 Rs.0
Received
New Current
Rs.0 Rs.0 Rs.0 Rs.0
Borrowing
New Other
Liabilities Rs.0 Rs.0 Rs.0 Rs.0
(interest-free)
New Long-term
Rs.0 Rs.0 Rs.0 Rs.0
Liabilities
Sales of Other
Rs.0 Rs.0 Rs.0 Rs.0
Current Assets
Sales of Long-
Rs.0 Rs.0 Rs.0 Rs.0
term Assets
New Investment
Rs.0 Rs.0 Rs.0 Rs.0
Received
Subtotal Cash
Rs.1,073,769 Rs.1,211,088 Rs.1,279,204 Rs.1,341,260
Received

Expenditures FY 2011 FY 2012 FY 2013 FY 2014


Expenditures
from Operations
Cash Spending Rs.399,588 Rs.400,788 Rs.429,828 Rs.431,128
Bill Payments Rs.656,323 Rs.772,134 Rs.796,888 Rs.817,391
Subtotal Spent
Rs.1,055,911 Rs.1,172,922 Rs.1,226,716 Rs.1,248,519
on Operations

Additional Cash
Spent
Sales Tax, VAT,
HST/GST Paid Rs.0 Rs.0 Rs.0 Rs.0
Out
Principal
Repayment of
Rs.0 Rs.0 Rs.0 Rs.0
Current
Borrowing
Other Liabilities
Principal Rs.0 Rs.0 Rs.0 Rs.0
Repayment
Long-term
Liabilities
Rs.47,772 Rs.47,772 Rs.47,772 Rs.47,772
Principal
Repayment
Purchase Other
Rs.0 Rs.0 Rs.0 Rs.0
Current Assets
Purchase Long-
Rs.0 Rs.0 Rs.0 Rs.0
term Assets
Dividends Rs.0 Rs.20,000 Rs.10,000 Rs.10,000
Subtotal Cash
Rs.1,103,683 Rs.1,240,694 Rs.1,284,488 Rs.1,306,291
Spent

Net Cash Flow (Rs.29,914) (Rs.29,606) (Rs.5,285) Rs.34,968


Cash Balance Rs.117,067 Rs.87,461 Rs.82,176 Rs.117,144
Balance Sheet Statement
The projected Balance Sheet is quite solid. We do not anticipate difficulty meeting our debt obligations
based on achieving the specific goals outlined in this plan. On a linear projection, TFK’S Restaurant &
Lounge has a positive Net Worth beginning in Year 3.

Balance Sheet
Pro Forma Balance Sheet
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Assets

Current Assets
Cash Rs.117,067 Rs.87,461 Rs.82,176 Rs.117,144 Rs.184,255
Inventory Rs.37,839 Rs.40,589 Rs.41,462 Rs.43,473 Rs.45,594
Other Current
Rs.73,311 Rs.73,311 Rs.73,311 Rs.73,311 Rs.73,311
Assets
Total Current
Rs.228,217 Rs.201,361 Rs.196,949 Rs.233,929 Rs.303,160
Assets

Long-term Assets
Long-term Assets Rs.65,000 Rs.65,000 Rs.65,000 Rs.65,000 Rs.65,000
Accumulated
Rs.6,500 Rs.13,000 Rs.19,500 Rs.26,000 Rs.32,500
Depreciation
Total Long-term
Rs.58,500 Rs.52,000 Rs.45,500 Rs.39,000 Rs.32,500
Assets
Total Assets Rs.286,717 Rs.253,361 Rs.242,449 Rs.272,929 Rs.335,660

Liabilities and
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010
Capital

Current Liabilities
Accounts Payable Rs.61,298 Rs.63,657 Rs.65,663 Rs.67,319 Rs.69,559
Current Borrowing Rs.0 Rs.0 Rs.0 Rs.0 Rs.0
Other Current
Rs.0 Rs.0 Rs.0 Rs.0 Rs.0
Liabilities
Subtotal Current
Rs.61,298 Rs.63,657 Rs.65,663 Rs.67,319 Rs.69,559
Liabilities

Long-term
Rs.252,228 Rs.204,456 Rs.156,684 Rs.108,912 Rs.61,140
Liabilities
Total Liabilities Rs.313,526 Rs.268,113 Rs.222,347 Rs.176,231 Rs.130,699

Paid-in Capital Rs.440,000 Rs.440,000 Rs.440,000 Rs.440,000 Rs.440,000


Retained Earnings (Rs.427,209) (Rs.486,808) (Rs.464,752) (Rs.429,897) (Rs.358,302)
Earnings (Rs.39,600) Rs.32,056 Rs.44,855 Rs.86,595 Rs.123,263
Total Capital (Rs.26,808) (Rs.14,752) Rs.20,103 Rs.96,698 Rs.204,961
Total Liabilities and
Rs.286,717 Rs.253,361 Rs.242,449 Rs.272,929 Rs.335,660
Capital

Net Worth (Rs.26,808) (Rs.14,752) Rs.20,103 Rs.96,698 Rs.204,961


Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 5812, Ethnic Food Restaurants, are shown for
comparison.
The following table outlines some of the more important ratios from the Ethnic Food Restaurants
industry. The final column, Industry Profile, details specific ratios based on the industry as it is
classified by the Standard Industry Classification (SIC) code, 5812.01.

Ratios
Ratio Analysis
FY 2011 FY 2012 FY 2013 FY 2014 Industry Profile
Sales Growth 0.00% 12.79% 5.62% 4.85% 6.96%

Percent of Total
Assets
Inventory 13.20% 16.02% 17.10% 15.93% 3.90%
Other Current
25.57% 28.94% 30.24% 26.86% 28.39%
Assets
Total Current
79.60% 79.48% 81.23% 85.71% 37.68%
Assets
Long-term
20.40% 20.52% 18.77% 14.29% 62.32%
Assets
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 21.38% 25.13% 27.08% 24.67% 19.17%


Long-term
87.97% 80.70% 64.63% 39.90% 29.21%
Liabilities
Total Liabilities 109.35% 105.82% 91.71% 64.57% 48.38%
Net Worth -9.35% -5.82% 8.29% 35.43% 51.62%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 65.41% 67.10% 68.19% 69.04% 59.31%
Selling, General
& Administrative 62.09% 59.39% 59.95% 58.34% 39.09%
Expenses
Advertising
1.74% 2.07% 2.00% 0.00% 2.75%
Expenses
Profit Before
Interest and -1.90% 5.10% 6.00% 9.92% 1.59%
Taxes

Main Ratios
Current 3.72 3.16 3.00 3.47 1.26
Quick 3.11 2.53 2.37 2.83 0.87
Total Debt to
109.35% 105.82% 91.71% 64.57% 3.27%
Total Assets
Pre-tax Return
147.71% -310.42% 318.76% 127.93% 54.38%
on Net Worth
Pre-tax Return
-13.81% 18.07% 26.43% 45.33% 7.17%
on Assets

Additional Ratios FY 2011 FY 2012 FY 2013 FY 2014


Net Profit Margin -3.69% 2.65% 3.51% 6.46% n.a
Return on Equity 0.00% 0.00% 223.13% 89.55% n.a

Activity Ratios
Inventory
10.91 10.16 9.92 9.78 n.a
Turnover
Accounts
Payable 11.71 12.17 12.17 12.17 n.a
Turnover
Payment Days 27 29 30 30 n.a
Total Asset
3.75 4.78 5.28 4.91 n.a
Turnover

Debt Ratios
Debt to Net
0.00 0.00 11.06 1.82 n.a
Worth
Current Liab. to
0.20 0.24 0.30 0.38 n.a
Liab.

Liquidity Ratios
Net Working
Rs.166,919 Rs.137,704 Rs.131,286 Rs.166,610 n.a
Capital
Interest
-1.06 3.87 6.07 14.31 n.a
Coverage

Additional Ratios
Assets to Sales 0.27 0.21 0.19 0.20 n.a
Current
Debt/Total 21% 25% 27% 25% n.a
Assets
Acid Test 3.11 2.53 2.37 2.83 n.a
Sales/Net Worth 0.00 0.00 63.63 13.87 n.a
Dividend Payout 0.00 0.62 0.22 0.12 n.a
Expansion, Payback & Exit Strategy
In addressing this question we look at the Exit Strategy as a definition of our business vision and
goals, as well as a contingency in the event the business is unsuccessful. We have addressed
this question at several levels:
Expansion as a Business Goal
We have set multiple financial goals to grow the success of the TFK’S concept, and compound
the profit return for TFK’S Investors

1. Expansion (Option 1): Our overall goal to maintain TFK’S as a unique and eclectic
concept. Based on projections, the business has captured market share by the end of the first
year. In addition Year 2 brings an increased sales and profit margin to sustain the addition of a
full-time General Manager. By second quarter of Year 2, the owners will look to launch a
second restaurant concept. This is not a chain, but another unique restaurant concept with
strong growth potential. Expansion will be considered with our Financial backers and Investor
partners

2. Expansion (Option 2): Throughout our business plan we have stayed focus that TFK’S
would be successful as a larger venue, with greater sales capacity and revenue potential. Our
objective with the site selection and lease negotiation is to have the opportunity to expand the
restaurant as a logical growth and profit plan.

3. Private Sale: We are in the business of making money. At the close of Year 3, we see
TFK’S as meeting 80.4% of its optimum sales potential with the current seating and space
allocation. At this stage the business debt is reduced, profit margins are increasing, and
TFK’S has established market share. We will look at the private sale of the majority interest
via A) Leveraged Buyout, or B) A larger Restaurant consortium. In both cases, our interest is
in delivering healthy profits to our Investors and Financial backers. Sales and profit margins
will be based on the restaurant valuation in Year 3.

4. Financial Solvency: The financial projections indicate that exit will be achievable over 3
years for the operating capital line of credit. Under a realistic scenario the Company should
have over Rs.7,00,000 in cash in the bank after income taxes the second year.
Exit Strategy to Retire the Business

We at TFK’S are committed to our concept and its viability. We step into this venture with
confidence and the success of our respective prior business efforts. No one attempts a business
anticipating failure, however sometimes ventures do not fulfill their promise.

In the event that our venture cannot achieve profitability and retire the encumbrances, we will first
attempt to sell the operation and use the proceeds to clear all outstanding balances.

THE END

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