Saute, An Organic Restaurant - Business Plan

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Siddharth Shah, Angel & Early Stage Investments | Funding frugal startups
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Published on Aug 6, 2016
This is a business plan project of our coursework for BBA, NMIMS. The business
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1. 1. Business Plan: Sauté Group Members( TY BBA - B): AnujBakshi : 66 Siddharth Shah: 81 Shreet Shah: 98 Shyla Jha: 99 SamahVisaria: 117
2. 2. Executive Summary Sauté is the first of its kind, organic and health restaurant in India. We serve organic food that is essentially made of domestically grown
products that are chemical and preservative free. Our specialty at Sauté is our ingredients along with the manner in which we prepare our dishes. All food
preparations at Sauté are done in the healthiest manner keeping in mind, the needs and preferences of our target market. Our mission at Sauté isto provide value to
our customers by offering great tasting, nutritious food and solutions for conscious and healthy living along with quality service at all times. Sauté’s target market:
Young professionals and College Graduates: Professionals who are health conscious today and prefer healthier food options while eating out. The age bracket for this
category is: 18 to 30. Middle aged group: From this category we target the upper middle class in Mumbai who are looking for healthier eating out options for
themselves, their families and their children. The age bracket for this category is: 30 to 50. Older age group: In this category our focus shifts to serving healthier
food to people who are extremely health conscious and are suffering from various health problems/diseases (such as diabetes, high cholesterol, obesity) and are
forced to follow a lot of food restrictions. Keeping their restrictions in mind, we have devised suitable product offerings for them. The age bracket for this category
is: 50 + Owners: The owners of Sauté are a Limited Liability Partnership with Anuj Bakshi, Siddharth Shah, Shreet Shah, Shyla Jha and Samah Visaria as equal
partners. Under this partnership, we share profits, losses and expenses equally. Future of the Business and the Industry: Demand for Organic products is expected to
increase due to increasing cases of lifestyle diseases, exposure to Health and Wellness products available globally as well as locally through modern retail channel
and communication and marketing initiatives by new entrants in India. The Indian organic food market is growing at a steady rate of 40% annually, more so because
of a growing population with high disposable income and rising health consciousness.India is the second most willing nation to pay a premium for food that is safe.
Firms in India are finding that there is a rising consumption of organic products by middle class Indians and this is creating a brand new market opportunity. It is
expected that 37% Indians will believe that the most important reason for consuming organic food is because they think it is better for them and their family. 26%
Indian consumers will consider organic food
3. 3. better for the environment and hence will consume them. 15% Indians will consume organic food because there is little or no use of pesticides in their produce.
Greater awareness of health issues drives purchase of food products with health supplements indicating even greater room for growth. This market is expected to
grow largely in the urban centers over the next 5 to 10 years where Health and Wellness products would see more attraction and could be available more easily
through established modern and traditional retail channels. The global organic market currently stands at around 65 billion dollars and is growing at a robust annual
rate of over 5 billion dollars.
4. 4. Sauté Company Description Company Description: Sauté is the first of its kind, organic and health restaurant in India. All ingredients used at Sauté for all its
preparations and dishes are organic in nature. It is located in 28, Aram Nagar 1,Versova, Andheri(West), Mumbai- 400061. Sauté aims to capitalize on the growing
demand for Organic, Fresh and Healthy food. We are a restaurant that is the first of its kind in India, to serve organic food that is essentially made of domestically
grown products that are chemical and preservative free. Our specialty lies, in not only our organic ingredients but also the technique in which our dishes are
prepared. Meal preparations at Sauté are innovative and healthier than conventional preparations (for example: less oil for cooking, no deep frying) The idea behind
Sauté is to provide a great place to come and eat, enjoy a healthy meal, and leave happy and the intent on coming back when hunger strikes again. Sauté will
establish itself as a restaurant that serves healthy, nutritious fast food. Initially the idea of such a place can seem intimidating to any person. Healthy food has a bad
reputation of being bland, bad tasting, or just plain revolting. However, our intention is to not only make healthy food delicious but also appealing to any person who
wants a meal that actually benefits the body. Concept Generation: Organic Foods benefits the environment, the producers or farmers and the consumers. Organic
foods carry are grown without fertilizers or pesticides, thus adapting to the harsh environment by producing more proteins and collect nutrients from the
surroundings. They carry no risks of having toxic substances that can be hazardous to human health when consumed. Organic Food can help prevent many illnesses
that are connected to the chemicals we obtain in our foods. Thus capitalizing on the benefits of organic food, we at Sauté use only organic food products as
ingredients. All our products are organically grown, not through conventional farming. Vision Statement: To be a vehicle of consciousness in the market by creating
a restaurant which inspires, promotes and supports well-being for all its customers and the community. Mission statement: To provide value to our customers by
offering great tasting, nutritious food and solutions for conscious and healthy living along with quality service at all times.
5. 5. Company Goals and Objectives: Constant commitment to customer satisfaction by offering high nutritious food with exceptional quality service. Creating
awareness and help improving health and well being of our customers and the community. Focus on constant and never ending improvement. Create a
challenging and rewarding work environment that provides our employees with an opportunity for personal growth as well as career advancement. Emphasis on
an innovative approach to business. We wish to achieve is to break even and begin to make profit within the next 3 years. Business Philosophy: Sauté’s target
market includes the following: Young professionals and College Graduates: Professionals who are health conscious today and prefer healthier food options while
eating out. The age bracket for this category is: 18 to 30. Middle aged group: From this category we target the upper middle class in Mumbai who are looking for
healthier eating out options for themselves, their families and their children. The age bracket for this category is: 30 to 50. Older age group: In this category our
focus shifts to serving healthier food to people who are extremely health conscious and are suffering from various health problems/diseases (such as diabetes, high
cholesterol, obesity) and are forced to follow a lot of food restrictions. Keeping their restrictions in mind, we have devised suitable product offerings for them. The
age bracket for this category is: 50 + Industry Description: The Indian organic food market is growing at a steady rate of 40% annually, more so because of a
growing population with high disposable income and rising health consciousness. The global organic market currently stands at around 65 billion dollars and is
growing at a robust annual rate of over 5 billion dollars. Under the 11th Five Year Plan (2007-2012), the country targeted the development of five million hectares of
cultivable land into certified organic farmland by promoting a scheme to compensate farmers for the lower yield of such crops.
6. 6. The reason for emphasis on organic farming was its positive effects on biodiversity and effective soil management that could go a long way in mitigating and even
reversing the effects of climate change, as also minimizing carbon emissions. Weaknesses of the industry: Although organic farming is picking up pace in India,
the sector has been jostling with lack of awareness, knowledge and confidence about organic farming and food products among both farmers and consumers.
Research and development is another significant area which requires serious attention and the same can be addressed by setting up research institutions aimed at
improving different aspects of organic production across India. (source: The Associated Chambers Of Commerce and Industry Of India, International Competence
Centre For Organic Agriculture) Thus looking at the above mentioned,Sauté will capitalize on the tremendous growth potential of the organic food industry in the
long term. Currently, it will reap all the benefits of being the first mover in this industry and will help create awareness about the rising concern for health and
wellness of individuals. Industry Trends: Changes in the industry (short term and long term): Increasing consumption of organic food is expected as the number of
people who are health conscious today is on a drastic rise. Increasing Competition is expected in the next few years as the industry is still at its development stage
in India and is projected to be a booming and an attractive market here. Government Regulations and certifications are expected to increase in this industry. How
will Sauté take advantage of changing industry trends? 1. First Mover advantage: As Sauté is the first of its kind, Health and Organic restaurant in Mumbai it will
capitalize on all aspects of being the first in the industry. This will be a major factor that will help Sauté take advantage of industry trends. Sauté will counter its
future competition in the following ways: Sauté will be the most experienced in this industry thus allowing it to gain trust and confidence of its customers. Trust
and confidence of customers will be gained by maintaining the authenticity of our product offerings and by delivering quality service. This will help Sauté build a
loyal base of customers. As Sauté is the first in the industry, we will follow an “innovative approach” in product offerings, service delivery and promotional
techniques. Whereas, our competition will follow an “imitative approach” of the same, thus leaving us with an advantage over them.
7. 7. 2. Dynamic management: At Sauté we will maintain a dynamic process of working. We will make regular changes in our management activities, such as change
promotional techniques, technological advancements, pricing techniques will be in synchronization with our target market. Our dynamic functioning will help us
adapt to major changes in industry such as eating habits, increasing disposable income, etc. Sauté’s core competencies and strengths: Offering customers food
varieties with highest nutrition content such as minerals, vitamins and essential fatty acids. Working towards constant improvement and innovation. Delivering
exceptional quality service. Be open to change. Constantly reexamine the situation. Put measurable qualifications to our growth and productivity. Strong ethical
values: Emphasis on development and promotion of organic food thus helping the environment and animals. Promoting the concept of ‘Living healthy’ in all
possible ways. Legal form of ownership: We, at Sauté, will adopt a General partnership ownership format. We are a partnership of 5 who will divide responsibility
for management and liability, as well as the shares of profit or loss will be done equally between all partners at Sauté. We have chosen this form of ownership as it
helps us in the following ways: A partnership is relatively easy to establish. With more than one owner at Sauté, the ability to raise funds is increased, because
each partner can contribute to the funds requires and also borrowing capacity of partners may be greater. A partnership may benefit from the combination of
complementary skills of partners. There is a wider pool of knowledge, skills and contacts that will help tremendously in the establishment of Sauté. The
partnership format can be cost-effective as each partner specializes in different aspects of their business. This form of ownership will provide us with moral
support and will allow for more creative brainstorming.
8. 8. Sauté Products and Services: Description of products or services: Sauté is the first of its kind, organic and health restaurant in India. We serve organic food that is
essentially made of domestically grown products that are chemical and preservative free. Our specialty at Sauté is our ingredients along with the manner in which we
prepare our dishes. All food preparations at Sauté are done in the healthiest manner keeping in mind, the needs and preferences of our target market. Our Menu: Our
menu will essentially be chalked out by our chef and his team, keeping in mind the various common health apprehensions and healthiest cooking techniques. At
Sauté we have designed a special Menu presentation strategy that will help us add value to our customers while choosing from our various food offerings at Sauté.
(Menu strategy further explained in Marketing Plan) Factors affecting Competitive Advantage of Sauté Level of Quality: Sauté will ensure the quality of all its
products (i.e the ingredients used) by recognized certification. Sauté certified by international organic farming institution ECOCERT. We will ensure that all our
fruits, grains and vegetables come from guaranteed organic produce. All plastic packaging material used by Organic Garden will be made of biodegradable plastic.
Emotional Quotient: Sauté will constant highlight the benefits of organic products thus instilling a “feel good” factor among its prospect customers. Customers will
feel good about eating something that is pure food, healthy, and tastes better than processed food and also the fact that they are contributing to the development of the
environment. First Mover advantage as an “All healthy meals” Restaurant: Sauté will be the first organic restaurant in Mumbai. Most restaurants contain just a few
healthy items to cover every corner of the market. Hence, Sauté wants to emphasize that there are just too many bad meals being consumed by the public every day.
The only way to thwart such an unhealthy diet is give no option but a delicious meal that is good for a person. This will completely separate the restaurant from the
fast food stereotype and establish a unique trait. Fresh food to eat:
9. 9. Many places have the food shipped in frozen and already cooked. Reheating food is not an option at Sauté. Fresh ingredients mean more delicious food and a
sense that the restaurant actually cares for the health of the customers. This benefits the business by making the customers feel important and in return will increase
the likelihood of returning to the restaurant to eat again. Factors affecting Competitive Disadvantage of Sauté No previous Business Models in the industry: Sauté is
at a competitive disadvantage here as it is the first of its kind in the industry. It cannot refer to previous business models or strategies to refer to while building its
base unlike its future competition will have. Sauté cannot learn from mistakes of previous businesses. Solution: Hence at Sauté, we will have to carefully measure all
our moves before taking them. Partners lack of experience in the industry: All partners at Sauté are new to a restaurant business and possess no previous knowledge
or experience in the field. Solution: All partners regularly update themselves with the required knowledge of the business in all aspects. Risk of Authenticity: Sauté
may experience a high risk of authenticity or disbelief. As this is this is the first of its kind offering in the industry, prospects may be apprehensive about the
authenticity of our products. Solution: Sauté will ensure the most respected licenses to maintain its standards and authenticity. It will also devise a strategic
promotional technique to position itself correctly in the mind of its consumers thus trying to eliminate this risk. High Dependency Levels: Sauté suffers from the risk
of high dependency on its suppliers. The number of organic product suppliers is few in number in India currently; hence it increases our dependability on them.
Solution: Sauté will maintain good relationships with suppliers at all times. The growth in organic farming industry will also help us eliminate this risk over time.
Lack of awareness among customers: Solution: The primary method to promote these products is by creating awareness and educating consumers on the various
health benefits of organic food. Government is also taking various steps to promoted organic farming that will help increase its awareness.
10. 10. Sauté Marketing Plan: Market Research: Primary We conducted a survey keeping in mind our target market and estimated the following: Frequency of our target
market eating out in a week: Frequency of eating junk food: 16% 62% 13% 9% 0-1 2-3 4-5 more than 5 41% 55% 4% Yes, a lot Ocassionally Rarely
11. 11. What health measures do you take? Are you health conscious? 29% 7% 8% 7% 49% Gym Dietician Health Doctor Yoga Any other fitness activity 0 10 20 30 40
50 60 70 Yes No %OfRespondents
12. 12. Do you or any of your family members have any of the following? Would you/ your family dine at a place that served health food without compromising a lot on
taste? 21% 13% 18% 22% 12% 14% Obesity Heart Disease High Cholestrol Diabetes Alcoholism Slow Metabolism 53.6 36.2 10.1 0 10 20 30 40 50 60 Yes maybe
No
13. 13. How much would you or your family be willing to spend per person at such a restaurant? 16% 48% 27% 9% 0-300 300-600 600-1000 > 1000
14. 14. Marketing Plan Market Research: Secondary Food consumption patterns in India: Indian consumers are now increasingly becoming health conscious and are
opting for organic products acknowledged for their virtues. Rapid urbanization, rising incomes, changing lifestyles and dietary patterns and growing health
consciousness have triggered the growth of health & wellness foods in India. Higher incomes could be expected to drive shifts in dietary patterns from basic
subsistence foods to more value added food categories like Health &Wellness products. India along with Ukraine is the second most willing nation to pay a
premium for food that is safe (85%). More than half the Indian consumers (53%) will not eat food that has crossed its best before date even if it looks & smells
alright. 78% of Indians regularly purchase iodine enhanced cooking salt. This purchase behavior is also evident in Cholesterol reducing oils (51%), showing the
shift towards healthier food supplements. In India, the preference for whole grain, high-fiber products is very high, owing to the habitual consumption of wheat
flour preparations. Heath Disorders in India: With more sedentary living, higher work stress, rising pollution levels and growing consumption of unhealthy fast
food, lifestyle disorders / diseases are gaining prominence in India. Some of the widely experienced disorders include obesity, heart disorders and digestive
disorders diabetes. With growing concerns about lifestyle diseases, urban consumers are showing increasing preference of low-fat, low-sugar / carbohydrate and
low cholesterol products. Demand for Organic Food in India: Firms in India are finding that there is a rising consumption of organic products by middle class
Indians and this is creating a brand new market opportunity. 69 % Indians vouch for Organic food and agree that it is safer than conventionally produced food. It
is expected that 37% Indians will believe that the most important reason for consuming organic food is because they think it is better for them and their family. 26%
Indian consumers will consider organic food better for the environment and hence will consume them.
15. 15. 15% Indians will consume organic food because there is little or no use of pesticides in their produce. Greater Awareness of Health Issues Drives Purchase of
Food Products with Health Supplements Indicating Even Greater Room for Growth. Indians Keen to Purchase Organic Foods for Their Children but Organic
Foods Suffer from Poor Availability and Premium Price Perception. 87 % of Indian consumers who will purchase organic foods will be motivated by the
perceived benefits they can derive for their children’s’ health. Demand for H&W is expected to increase due to increasing cases of lifestyle diseases, exposure to
H&W products available globally as well as locally through modern retail channel and communication and marketing initiatives by new entrants in India. This
market is expected to grow largely in the urban centers over the next 5 to 10 years where H&W products would see more attraction and could be available more
easily through established modern and traditional retail channels. Organic Haus, an all-organic brand that retails products sourced mainly from 18 German,
Austrian and European manufacturers, said it was aiming to open up to 30 stores across the country in next two years. Major issues in the Indian organic food
industry: Though benefits of organic food are widely acknowledged, the overall low awareness will appear to be hampering purchases. Credibility turned out to
be the major consideration in this industry. Higher prices for organic products are still an impediment. If a household shifts completely to organic food products,
the extra spend comes to around 1,500 per month, according to organic producers. Sources: AC Nielsen Global Online Survey conducted on 15th February, 2010.
AC Nielsen syndicate survey conducted on 20th February, 2006. Economic Times: 19 August, 2011. Economic Times: 14 March, 2012. “The health and wellness
industry in India” Report by TATA.
16. 16. Economics Current demand in target market: Indian consumers are now increasingly becoming health conscious and are opting for organic products
acknowledged for their virtues. Organic Food is currently considered as a niche segment by the Indian consumers. Trends in target market—growth trends, trends
in consumer preferences, and trends in product development. As per the AC Nielsen Global Online survey on 15 February 2010: India along with Ukraine is the
second most willing nation to pay a premium for food that is safe (85%). 69 % Indians want to shift to Organic food and agree that it is safer than conventionally
produced food. According to RNCOS latest research report “Indian Organic Food Market Analysis” The country’s nascent organic food market is fast
transforming into the world’s fastest growing organic food market. It has been anticipated that the sector will post significant growth during 2011-2013, invariably
growing at a CAGR of 15%. According to the Ac Nielsen Online survey in 2006: 87 percent of Indian consumers who will purchase organic foods will be
motivated by the perceived benefits they can derive for their children’s’ health. Growth potential and opportunity for a business of your size: As per the AC Nielsen
Global Online survey on 15 February 2010: It is expected that 37% Indians will believe that the most important reason for consuming organic food is because they
think it is better for them and their family. It is expected that 26% Indian consumers will consider organic food better for the environment and hence will consume
them. It is expected that 15% Indians will consume organic food because there is little or no use of pesticides in their produce. Hence, we believe in the success of
our proposed business concept.
17. 17. Barriers to entry and our strategies to overcome them: High capital costs: The cost of capital is high in any restaurant business, especially in our case, when
our offering is completely new a lot of extra technological facilities such as efficient cold storage for organic vegetables are required. In addition to which we have
equipment costs, leasing structures, rent for location of restaurant, etc. Solution: At Sauté we will try to achieve our projected sales forecasts in order to overcome all
high capital costs by positive returns. High production costs: As organic farming/ products are very different from conventional products, they differ on various
aspects including costs. The costs associated with using organic products and healthier supplements while preparation of food increases our costs here. High
marketing costs: For any non conventional business concept to work or be recognized, the marketing costs associated with it are very high. Even at Sauté, we will
aggressively promote our restaurant in the beginning to help us get the required footfalls to maintain them. Solution: We will devise most low cost promotional
techniques, such as mutually beneficial tie ups with gyms, dieticians, etc in order to avoid high costs of marketing. Consumer acceptance and brand recognition:
One of the major risks we will suffer from at Sauté is authenticity or disbelief as we do not have any strong brand name or any other factor of credibility above us.
Solution: Sauté will ensure the most respected licenses to maintain its standards and authenticity. It will also devise a strategic promotional technique to position
itself correctly in the mind of its consumers thus trying to eliminate this risk. Training and skills: Our chefs will have to been to given regular training in order to
learn and adapt to the healthiest cooking techniques prevalent. How could the following affect your company? Change in government regulations: Increasing
government efforts to promote organic farming will help us increase awareness of organic food in Mumbai which is essential in the Indian market as a whole. One of
our current competitive disadvantages is lack of awareness or the organic food industry and its benefits in India.
18. 18. Change in the economy Changes in the economy such as rising disposable incomes and propensity to consume, growth in target market size etc will benefit us
tremendously as we are the first of this kind in the Indian market. Our dynamic functioning will help us adapt to major changes in industry such as increasing target
market size, increasing disposable income, etc. Change in your industry Change in our own industry could include higher competition which we will counter by
the following: - First mover’s advantage: We will follow an “innovative approach” in all our product offerings, service delivery and promotional techniques. Sauté
will be the most experienced in this industry thus allowing it to gain trust and confidence of its customers. Trust and confidence of customers will be gained by
maintaining the authenticity of our product offerings and by delivering quality service. - Dynamic Management Process: We will make regular changes in our
management activities, such as change promotional techniques, technological advancements, pricing techniques will be in synchronization with our target market.
19. 19. Product Sauté Menu: Sauté is a multi cuisine restaurant that serves an assortment of cuisines such as Continental, Italian and Indian. Our chef will have great
latitude in designing and producing the menu offerings. We will endeavor to procure all the authentic ingredients necessary to hold true to the varied and interesting
cultural recipes. Some of our Dishes would include: Salads Soups/Broths Steamed items(momos, dimsums) Fruit salads Fresh Juices Our menu will be
designed in an innovating and interesting manner to enhance customer satisfaction and add value to our offerings: 3 Menu strategy: We will be preparing a 3 Menu
strategy with the help of our chefs. The basic idea will be to have separate dishes for Breakfast (being healthier and heavier than the rest), Lunch (being moderate
and fun) and Dinner (being light and tasty) Menu design Strategy: We have an innovative idea to design each of the three menus. Every menu will have three
sections with dishes ranging from the healthiest options to the “least healthy” options. Nutrition Tables: These will be provided for all dishes. It helps in
comparison among various dishes. Salad bar: For the salad bar that we will open there will be a defined menu as well as a customization strategy. Certain famous
healthy salads as per our chefs’ expertise will be on the menu. And customers will also be able to “make their own” salads as per their likes and dislikes of
ingredients. There will be a special attendant at the salad bar counter for this purpose. Important features of our products/service: All ingredients at Sauté are
organic, i.e made in a way that limits the use of synthetic materials during production. Variety of healthy food offerings available to customers without
compromising on taste. High Nutritional importance: customers are provided with nutrition tables and information for each dish or preparation on tablet High
ethical standards are maintained as Sauté promotes organic farming that is beneficial to both the environment and animals. Important benefits of our
products/service: Sauté offerings provide the healthiest preparation of recipes also suitable for patients such as diabetes, high cholesterol, obesity, etc
20. 20. Customers have the advantage of comparing dishes on nutrition content. Sauté offerings reduce risk of diseases such as cancer, obesity, Alzheimer’s and
some birth defects by using organic ingredients that are pesticide free. Sauté products will have great fresh taste is considered a bonus among the Benefits of
Organic Food. Unrefined provisions are fresher and have richer taste. Organic food offerings have higher minerals, vitamins and essential fatty acids. Safer food
option for children. Supplementary Services provided at Sauté: 1. Order taking: Order Entry On site order fulfillment Telephone order placement Reservations:
Tables 2. Billing Elements: Invoices for Individual transactions 3. Payment Elements: Cash handling Credit/Debit card handling Tokens/vouchers
Coupon Redemption 4. Counseling: Customized advice to customers Menu suggestions 5. Hospitality: Greetings Food and beverages Washrooms
Waiting facilities and amenities Security 6. Safekeeping: For Customers- Parking Facilities, Valet Parking for vehicles Security Personnel
21. 21. For Products- Packaging of food during home delivery 7. Exceptions: Special Requests- Medical or disability needs Dietary Requirements Children
needs Handling special Communication: Complaints, compliments and Suggestions via a feedback form Problem Solving: Resolving difficulties that arise
during service delivery Resolving difficulties caused by accidents, failures, etc Assisting customers who have suffered accidents or a medical emergency
Restitution: Refunds Compensation in kind for unsatisfactory service (such as a complimentary dish)
22. 22. Customers Sauté’s target market includes the following: Young professionals and College Graduates: Professionals who are health conscious today and prefer
healthier food options while eating out. The age bracket for this category is: 18 to 30. Middle aged group: From this category we target the upper middle class in
Mumbai who are looking for healthier eating out options for themselves, their families and their children. The age bracket for this category is: 30 to 50. Older age
group: In this category our focus shifts to serving healthier food to people who are extremely health conscious and are suffering from various health
problems/diseases (such as diabetes, high cholesterol, obesity) and are enforced with a lot of food restrictions. Keeping their restrictions in mind, we have devised
suitable product offerings for them. The age bracket for this category is: 50 + Characteristics of our target market: According to the Ac Nielsen Health and
wellness Consumer Survey in June 2010: 38 % Indians believe that bad food habits like consuming junk & oily food and adulterated food have an adverse affect on
health and 36 % believe that bad, irregular habits like consumption of alcohol/cigarettes and lack of exercise & nutritious diet are factors contributing to poor health.
There is a significant shift in the food palate and eating habits that is visible across the country and across all income levels. 69% of Indians are altering their
diets to tackle obesity and associated diseases (diabetes and cardiovascular). Nutritional and wellness products have become affordable and accessible due to a rise
in disposable income and the advent of new retail channels. The urban middle class is increasingly opting for preventive cure over post- diagnostic treatment.
Rapid urbanization, rising incomes, changing lifestyles and dietary patterns and growing health consciousness have triggered the growth of health & wellness foods
in India. Geographic locations: We are looking at attracting our target population primarily from 2 districts, i.eAndheri (West) and Bandra. Customer’s demographic
profile: Demographic Variables: Young Professionals Middle aged Group Older Aged Group
23. 23. Age 18-30 30-50 50+ Gender Male, Female Male, Female Male, Female Location Andheri(w), Bandra Andheri(w),Bandra Andheri(w),Bandra Income Level
Upper Middle Class Upper Middle Class Upper Middle Class Social Class or Occupation Tv actors, Dieticians, Doctors, Middle management Middle management
positions Higher Management positions, Retired individuals Education Graduates or Post Graduates Post Graduates Secondary Education
24. 24. Competition Saute’ is a health restaurant that uses the combination of organic products and specific cooking techniques to produce very healthy dishes. Such a
business model is the first of its kind in Mumbai on such a direct basis. There have been numerous restaurants/eateries/cafes that have tried to promote the idea of
health food. However, these cannot be identified as competitors because all of them have incorporated the concept of diet or health food in some part of their model
(menus), while still predominantly catering to their original target market, whichever kind it may have been. This would mean that the competition we will be facing
would either be with respect to organic products, which we use for our final product, or with some of our concepts being the basic business model of other such
businesses (restaurants, cafes, etc) As per the above understanding our major competitors are: Indirect competitor: ORGANIC GARDEN Address: shop no. 2, Beach
apartments CHS Ltd., Plot no. 25, J.P Road, Versova, Andheri(West), Mumbai- 400061. Organic Garden is a retail store for purchase of organic products i.e. fruits
and vegetables. It is a relatively new concept as fruits and veggies are generally bought from local vendors and, more recently, from super/hyper markets like Star
Bazaar. However, with evolving trends citizens are becoming more and more aware of their surroundings, environment and a forward-looking trend is being formed
to go back to nature and use natural products. This people are showing more interest in organic products (no pesticides/artificial injecting) This chain of store was
recently opened about 4 months ago keeping in mind the increasing population of health conscience people. Although these are our suppliers, they do come under
the bracket of our competitors. The competition we will be facing, though, is of the indirect kind. They would be competitors because, essentially, they provide the
same benefits that our products would provide (i.e. organic food/nutritious food at home as opposed to the same at a restaurant) However, the threat they pose is
minimal as our business models are different since our final products and customer experiences are not comparable. We promote the idea of eating healthy food
outside, whereas, they are aimed at getting local buyers to buy their products on a daily basis. A more positive approach, which could be incorporated in our
working, would be to look at each other as promoters of our concepts. This is because, essentially, all their targets/ customers would also be interested in our
restaurant and vice-versa.
25. 25. Another note on which our competition is eased out is that since they are our suppliers, we are also now part of their customers. Organic Garden is still to
establish itself completely in the market. Direct Competitor SUBWAY: Address: 3&4, Darya Darshan, JP Road, Versova, Mumbai- 400061, Maharashtra. Subway is
an American restaurant franchise that primarily sells submarine sandwiches (subs) and salads. It has decades of experience in the food industry and enjoys a specific
and very well established brand position. It serves food as per the concept of eating fresh (derived healthy) which is even evident from its tagline “Eat fresh” Subway
has been known for years as being one of the few “healthy” options to eat out for the figure conscience and health conscience youngsters. Although their business
model is based on similar parameters as Sauté, there are a number of factors that differentiate us completely. They are: 1. Subway mainly provides only a particular
type of sandwich and salads. They provide only a small part of our concept (menu), which is salad. Sauté will provide a salad bar for its customers with a variety of
healthy options to pick from. This makes Subway a competitor for only a part of the product. Although, the concept of a salad bar is not very new as many
restaurants have had it for a while (Eat around the corner), but this does not make them our competitors as our business grounds are totally different and diverse. 2.
Subway’s target audience comprises mainly of the youth. Our target encompasses a lot more than just health conscience youngsters/professionals. Thus, in this
respect too, Subway becomes a competitor for only a part of the target market. 3. Another very important point of difference is that of the ambience, projected image,
feel of the restaurants. Subway has positioned itself as a very fast-paced eatery. It is considered more as a hangout joint than a diner. Its products are also such that
they could even come under the on-the-go foods bracket and this practice is in place as well. Subway does not position itself as a restaurant where customers come
for a quiet family dinner. Sauté will position itself as a full-fledged dining experience where one could also come for a quick bite. The restaurant ambience/image,
though not too formal, will not be as casual as Subway. 4. Subway practices a self-service process of delivering their product, whereas, Sauté is a more formalized,
sit- down dinner.
26. 26. 5. Subway has always enjoyed as the image of the healthy or nutritious food. However, this is mainly when it is compared with the other available options of
eating outside which are of course, mostly not healthier. With Sauté now coming in the market this will change. Sauté will be the healthier place to eat at. Subway
sandwiches and salads, though said to be healthy, generally contain cheese, a lot of meat, various breads and a variety of not-so-healthy sauces. Of course, these
ingredients are optional and are incorporated in the food as per instructions from the customer, but that is irrelevant at this stage. Our target market includes the older
generation that eats healthy out of no choice and many restrictions. And so Sauté will provide food that is actually for such people and no kind of unhealthy food will
even be an option for customers. This of course will be done keeping in mind factors like taste, appeal to the customer and actual possibility of such dishes. The
above differences are not only to draw out a line of differentiation between Subway and Sauté but, also to portray on what basis we can minimize the threat posed for
Sauté by Subway. Competitive advantages Of Sauté: A platter of healthy varieties of food will be available to our customers, We will position ourselves unlike
any other restaurant, the only “all healthy meals” restaurant in Mumbai. Huge base of target market unlike competitors. Customers have the advantage of
comparing dishes on nutrition content before consumption. Instilling a “feel good” factor among its prospect customers by healthy food consumption and
contributing to the development of the environment. Competitive Disadvantages of Sauté: No international or strong domestic brand name /credibility factor.
Lack of awareness of organic food products among customers in current industry. Hence, effective promotion tolls and high marketing costs to be incurred.
27. 27. Promotion Sauté is a niche concept. It provides healthy food made with organic vegetables mainly to cater to the needs of health conscience people. This might
sound innovate and different, but has its limitation of being a very unconventional concept. This could have something to do with the authenticity of the idea. People
should be convinced that this is beneficial for them and that it is actually what it claims to be. Convincing potential customers is the key to converting them in repeat
customers. This means our promotion of Sauté is extremely important and should be carried out exceptionally well. Companies today are using innovative ways to
promote and advertise. Sauté will also use some such tactics. The basic idea around which our promotional tactics will revolve (before start up) is to create hype.
This has its pros and cons. We do not want to create hype that will lead to high expectations and in turn low reviews. Nor do we want to be depicted as a snobbish
diner for high-end customers only. The kind of buzz we want to create in the suburbs is that of some social value. Sauté should be sought after. We want everyone to
be curious and awaiting its opening. Special care will be taken to ensure the timing of our promotions as we do not want to start so much in advance that it fizzles out
by the time we arrive in the market. Various methods for promotion are: Teasers: Before we start with anything directly promoting Sauté there will be indirect teasers
that do not completely reveal the idea of the restaurant but just make the customers think about what this new brand is. There have been a couple of such campaigns
that have created a lot of curiosity in minds of the audience as to what is being advertised. Care will be taken not to over promote or frustrate the population. Method
of this type of advertising will be outdoor media. Social Media: This is the most effective form of advertising or creation of awareness especially when it comes to
the youth segments. We will be creating our own Facebook and Twitter pages and spreading the word through immediate friends and family. This method of
promotion is one of the most inexpensive while it still gets people talking about your product. Magazine articles: A tailor-made write-up about the upcoming
restaurant with certain insights from our head chefs, just a few days before the opening night. Articles have their advantages over ads as they are more realistic and
reliable in this respect. Food Magazines will be publishing these paid-for pieces as per our timing convenience. Newspaper Ads: Although articles have their benefits
we will need to use some measure to spread the word to the population at large. This will provide a huge platform for Sauté. Newspapers – iDiva, Mumbai Mirror,
Mid-day
28. 28. Tie-ups: Tie-up with Organic Garden (our supplies) to promote our restaurant in return of full yearly supply contract from them as well as mention of their
products in our restaurant (promotion for them) Promotions will vary from time to time- Pamphlets, Word of Mouth, Discount coupons. Our next Tie-up is going to
be with Gold’s Gym/ Sykz Gym. This is again going to be a low cost tie up, as it will be based on a mutually beneficial relationship. This tie up will help the gym by
providing its customers more value. Customers will be able to avail of special discounts or offers at Sauté. Sauté in return will benefit by attracting foot falls and will
add to the restaurants customer database. Brand ambassador/endorser: Celebrity nutritionist of renowned fame, RujutaDivekar will endorse our brand and regularly
tweet about it (pre start-up phase) Word-of-Mouth: This will play a big role in our promotion. As per custom and tradition, opening night of our restaurant will be an
invitees-only affair. Our celebrity endorser along with a couple of other well known TV personalities of personal contact will be present to inaugurate the restaurant.
The event will be covered by a leading newspaper and will be tweeted about by our guest’s thus ensuring good social media coverage. Early bird Offers: We at Sauté
will have early bird offers for the first 2 weeks in the restaurant to attract foot falls. These offers would include free meals, special discounts during breakfast/lunch,
50% off on membership of our gym associate, etc. Website: This will be an on-going promotional activity that will be started after the initial few days of our
restaurant. Promotional Budget Before startup Considering all our planned strategic promotional techniques we would like to execute, we have allocated a budget if
INR 200000 for start up promotions. This has been accounted for in the startup expenses budget. Ongoing Considering all our planned strategic promotional
techniques we would like to execute, we have allocated a budget if INR 100000 for our ongoing promotions. This has been accounted for in the profit and loss
account.
29. 29. Pricing: Our offerings at Sauté will be priced moderately. Our prices will be affordable to our target group. Each appetizer will be priced at an approximate of
INR 200-300. Whereas, each main course preparation will be priced at an approximate of INR 300-400. Each dish in the menu is priced to maximize sales and
profitability. For instance, high-margin-high-moving dishes will be promoted by the restaurant by giving a “meal of the day/ hot picks list”, and low-margin-low-
moving dishes will be eventually taken off the menu, which we will have an idea of in the first few months of the business. So this means, that for some dishes, the
food cost is as low as five per cent (steamed rice, for example), while in others it is as high as 50 per cent (Seafood). While it may seem like highway robbery to
charge Rs70 for a bottle of water or Rs200 for a small bowl of steamed rice, these low-food-cost dishes are necessary to keep the restaurant running. If these low-
food-cost-high-priced items were not around, sea food on the same menu would cost as much as three times more, and would have no takers. Hence, we have not
decided a fixed % of profit margin that is constant across all dishes at Sauté. Our pricing strategy in relation to competitive analysis: Yes, our pricing strategy fits in
synchronization with our competitors (i.e both direct and indirect) prices. Our pricing strategy in comparison to our competitors has been explained clearly below.
Comparison of competitor’s prices: As our direct competitor that is, Subway is priced affordably just like us. We will face competition from Subway but only certain
product categories such as salads and hence this pricing tactic has been adopted by us. This price war can be won by us as our offering is healthier in all aspects than
our competitor. Hence, if one is paying the same price a healthier option will definitely be more attractive to him. Whereas, our indirect competitor that competes
with us only on our product ingredients and currently exists on a completely different distribution channel is priced much higher. The cost of organic products at
their outlets are almost double than conventional prices of fruits, vegetables, etc. We have priced our dishes much lower than the cost of than their individual product
rates in order to capitalize on our customers to choose this format or organic food consumption over theirs. Another advantage of our pricing technique is that it
includes the cost of a complete healthy meal unlike our competition here.
30. 30. Important of price as a competitive factor: As per the Ac Nielsen Global Online Survey 2010:India along with Ukraine is the second most willing nation to pay
a premium for food that is safe (85%). Sauté has 3 different target groups of customers. Of these groups, only young professionals are expected to make their
decisions based on price. Our value proposition is exclusive and despite that we are not going to be charging a high premium for it, in order to cater to all our target
groups effectively specially focusing on young professionals. As mentioned above, we do not face too much direct competition in the market, our pricing strategy is
appropriate in order to achieve the expected sales and will help us correctly position ourselves in the mind of the consumer. Credit Policies: As Sauté is a restaurant,
we deal mainly in cash transactions but also provide our customers with an option of paying by credit/debit cards. Customer Service provided at Sauté: 1. Order
taking: Order Entry On site order fulfillment Telephone order placement Reservations: Table 2. Billing Elements: Invoices for Individual transactions 3. Payment
Elements: Cash handling Credit/Debit card handling Tokens/vouchers Coupon Redemption 4. Counseling: Customized advice to customers Menu suggestions 5.
Hospitality: Greetings Food and beverages Washrooms
31. 31. Waiting facilities and amenities Security 6. Safekeeping: For Customers- Parking Facilities, Valet Parking for vehicles Security Personnel For Products-
Packaging of food during home delivery 7. Exceptions: Special Requests- Medical or disability needs Dietary Requirements Children needs Handling special
Communication: Complaints, compliments and Suggestions via a feedback form Problem Solving: Resolving difficulties that arise during service delivery Resolving
difficulties caused by accidents, failures, etc Assisting customers who have suffered accidents or a medical emergency Restitution: Refunds Compensation in kind
for unsatisfactory service (such as a complimentary dish)
32. 32. Proposed Location The proposed location we have given in our Plan for Sauté is Versova. The reason for this choice of location is that Versova as an area is
developing into a youth as well as high end consumer junction. The entire Versova Beach stretch already has a lot of footfalls because of the existing restaurants.
There are places like CCD, Domino’s, Bru World Café, Chai Coffee, Cheelizza, WTF for the young college going crowd. Our competitor, Subway, is also located
there. It is beneficial for us to be located near them be For the upper middle class bracket of families and young professionals there are trendy restaurants like Ivy, Fil
Fil, Mia Cucina and the very popular, recently opened Café Mangi. Organic Garden(supplier) has also opened a branch there. Other famous spots on the stretch
include Sancha, Hakim’s Alim, Aura Spa and other such upcoming, forward- looking businesses. This shows a rising trend in that area to splurge on high-end
lifestyle. What we are aimed at doing is taking percentage of the share of wallet assigned by customers to spend on these places. This is location was ideal not only
this respect but also because rent rate of Versova is relatively lower when compared to other posh locations like Bandra. Once we establish ourselves and our
position in the area we can think of moving to places like Juhu, Bandra, or even South Bombay side. If customers come to Sauté, valet services for their cars will be
available to them. Versova’s Aaram Nagar is an open ground space. Although it cannot be used as a parking lot some space will be available to us to station
customers’ cars there. On the Versova beach road as well parking is not difficult for customers who choose to park themselves. Public transport to Versova is also
very easily available which highlights its accessibility. As per the list of restaurants mentioned right above Versova has an established image of a fun and trendy ,
youth centric, upper middle class area for recreation. This completely goes with the image we want to build for and associate with Sauté.
33. 33. Distribution Channel: We will sell our products through two main channels that are- Retail outlet: Sauté will be located in 28, Aram Nagar 1, Versova, Andheri
West, Mumbai 400061.We currently have just one retail outlet in the city. Direct Channel: Sauté will also operate through one direct channel of distribution that is
Telephone. We will also provide the facility of home delivery of our food offerings thus including the above mentioned channel of distribution.
34. 34. Sales Forecasts: Unit Sales Meals Drinks Total sales 1 3300 900 4,200 2 3391 925 4,316 3 3484 950 4,434 4 3580 976 4,556 5 3678 1003 4,681 6 3779 1031
4,810 7 3883 1059 4,942 8 3990 1088 5,078 9 4100 1118 5,218 10 4213 1149 5,361 11 4328 1180 5,509 12 4447 1213 5,660 Year 1 46174 12593 58,767 Year 2
48483 13223 61,705 Year 3 47756 13024 60,780 Year 4 49905 13610 63,515 This the sales forecast for the first 4 years of the company coupled with the breakup of
the first year. We have made the following assumptions from our research – 1. The restaurant will serve 20 tables everyday with 5 unit meals per table. This leads to
110 unit meals a day. 2. The restaurant will serve 30 drinks a day. 3. For the first year, the unit sales will increase by 2.75% every month. 4. For the second year, the
unit sales will increase by 5% for that year. 5. For the third year, the unit sales will decrease by 1.5% for that year. 6. For the fourth year, the unit sales will increase
by 4.5% for that year.
35. 35. Management and Organization The company has 5 partners. Each partner has distinct roles and functions. Anuj Bakshi – Operations Samah Visaria – Liaison
Shyla Jha – Marketing Shreet Shah – Operating Finances Siddharth Shah – Auditing In case a partner is not present, any other partner can assume his/her
responsibility. Organizational Flowchart for the Kitchen Kitchen Manager Head Chef Asst Chef Asst Chef Asst Chef Purchase Manager
36. 36. Organizational Flowchart for the serving area Key Advisors Attorney – Ms Apeksha Parekh Accountant – Yogesh D. Shah Insurance agent – Gautam
Doshi Banker – Excellent Co-operative Bank Consultant or consultants - Strategic Advisory Management Mentors and key advisors – Mr Sandeep Bakshi Mr
Sandeep Shah Mr Shailesh Shah Floor Manager Waiting Staff Cleaning Staff Delivery Staff Security Valet
37. 37. Start Up Funds Required Particulars Rate Qty Amount INTERIOR DESIGNING 1050000 INTERIORS Tables 1800 20 36000 Chairs 1375 95 130625
Tablecloth 875 45 39375 Dining Sets 5000 45 225000 Extra Glasses 250 100 25000 Serving Sets 2500 45 112500 KITCHEN Kitchen Counters 500000 Industrial
Fridge 80000 2 160000 Industrial Oven 17500 3 52500 Storage 150000 Kitchenware 50000 Appliances 125000 STAFF Staff Clothes 500 15 7500 PROMOTIONS
200000 LEGAL FEES Licenses 300000 Security Deposit 1000000 Bikes 17500 2 35000 Funds Required 4198500 This is the quantum of startup funding required. It
envisages all the expenses required to bring the restaurant to just before functional and operational level. The funding will be explained in the latter stages.
38. 38. Personal Financial Statement Anuj Bakshi Particulars Amount Cash at hand 150,000 Equity 575,000 Property 1,200,000 Bonds 450,000 Total 2,375,000 Samah
Visaria Particulars Amount Equity 675,000 Gold 940,000 Cash at bank 100,000 Total 1,715,000 Shreet Shah Particulars Amount Cash at bank 350,000 Cash at hand
100,000 Equity 300,000 Mutual Fund 250,000 Gold 280,000 Total 1,280,000 Shyla Jha Particulars Amount Cash in hand 150,000 Gold 740,000 Cash at bank
500,000 Property 450,000 Total 1,840,000 Siddharth Shah Patriculars Amount Cash at bank 2,500,000 Car 190,000 Total 2,690,000
39. 39. The given above is the personal financial statement of all the partners. Their combined networth is Rs 9,900,000. For the purpose of funding the startup, their
assets and networth is the primary source of money. Any additional sources of finance will be sourced later if and when required. Currently all partners will
contribute INR 900,000 towards initial capital to form a LLP 20% 20% 20% 20% 20% Start Up Funding Siddharth Shah Anuj Bakshi Samah Visaria Shyla Jha
Shreet Shah
40. 40. Sales Forecasting Unit Sales Meals Drinks Total Sales Month 1 3,000 900 3,900 Month 2 3,083 925 4,007 Month 3 3,167 950 4,117 Month 4 3,254 976 4,231
Month 5 3,344 1,003 4,347 Month 6 3,436 1,031 4,467 Month 7 3,530 1,059 4,589 Month 8 3,627 1,088 4,716 Month 9 3,727 1,118 4,845 Month 10 3,830 1,149
4,979 Month 11 3,935 1,180 5,115 Month 12 4,043 1,213 5,256 Year 1 41,976 12,593 54,569 Year 2 44,075 13,223 57,298 Year 3 43,414 13,024 56,438 Year 4
45,368 13,610 58,978 This the sales forecast for the first 4 years of the company coupled with the breakup of the first year. We have made the following assumptions
from our research – 7. The restaurant will serve 20 tables everyday with 5 unit meals per table. This leads to 100 unit meals a day. 8. The restaurant will serve 30
drinks a day. 9. For the first year, the unit sales will increase by 2.75% every month. 10. For the second year, the unit sales will increase by 5% for that year. 11. For
the third year, the unit sales will decrease by 1.5% for that year. 12. For the fourth year, the unit sales will increase by 4.5% for that year.
41. 41. Revenue Forecasting Revenue Meals Drinks Total Sales Month 1 1,200,000 135,000 1,335,000 Month 2 1,233,000 138,713 1,371,713 Month 3 1,266,908
142,527 1,409,435 Month 4 1,301,747 146,447 1,448,194 Month 5 1,337,546 150,474 1,488,019 Month 6 1,374,328 154,612 1,528,940 Month 7 1,412,122 158,864
1,570,986 Month 8 1,450,955 163,232 1,614,188 Month 9 1,490,857 167,721 1,658,578 Month 10 1,531,855 172,334 1,704,189 Month 11 1,573,981 177,073
1,751,054 Month 12 1,617,266 181,942 1,799,208 Year 1 16,790,565 1,888,939 18,679,503 Year 2 17,630,093 1,983,385 19,613,478 Year 3 17,365,642 1,953,635
19,319,276 Year 4 18,147,095 2,041,548 20,188,644 From the Sales Forecast, we have made the following Revenue Forecast. For the purpose of the revenue
forecasting, we have made the following assumptions- 1. Unit Meal price is INR 400 2. Unit Drink price is INR 150 3. The prices of units do not increase for the first
4 years.
42. 42. Profit & Loss Account for the First Year of Business Months 1 2 3 4 5 6 7 8 9 10 11 12 Sales 1,335,000 1,371,713 1,409,435 1,448,194 1,488,019 1,528,940
1,570,986 1,614,188 1,658,578 1,704,189 1,751,054 1,799,208 COGS 534,000 548,685 563,774 579,278 595,208 611,576 628,394 645,675 663,431 681,676
700,422 719,683 Gross Margin 801,000 823,028 845,661 868,916 892,812 917,364 942,591 968,513 995,147 1,022,513 1,050,632 1,079,525 Overheads
Administrative Salaries 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Telephone 5,000 5,000 5,000 5,000
5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Rent 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
Electricity 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Water 10,000 10,000 10,000 10,000 10,000 10,000 10,000
10,000 10,000 10,000 10,000 10,000 Maintenance 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Professional Fees
Selling & Distribution Advertising & Promotion 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 Delivery
Charges 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Total Expenses 567,000 567,000 567,000 567,000 567,000
567,000 567,000 567,000 567,000 567,000 567,000 567,000 Net Income 234,000 256,028 278,661 301,916 325,812 350,364 375,591 401,513 428,147 455,513
483,632 512,525
43. 43. Net Income year for the first 0 100,000 200,000 300,000 400,000 500,000 600,000 1 2 3 4 5 6 7 8 9 10 11 12
44. 44. Profit and Loss Account for 4 years Particulars Year 1 Year 2 Year 3 Year 4 Sales 18,679,503 19,613,478 19,319,276 20,188,644 COGS 7,471,801 7,845,391
7,727,711 8,075,457 Gross Margin 11,207,702 11,768,087 11,591,566 12,113,186 Overheads Administrative Salaries 2,400,000 2,400,000 2,400,000 2,400,000
Insurance 20,000 20,000 20,000 20,000 Telephone 60,000 60,000 60,000 60,000 Rent 2,400,000 2,400,000 2,400,000 2,400,000 Electricity 300,000 300,000
300,000 300,000 Water 120,000 120,000 120,000 120,000 Maintenance 180,000 180,000 180,000 180,000 Professional Fees 500,000 500,000 500,000 500,000
Financial Depreciation 164,100 164,100 164,100 164,100 Selling & Distribution Advertising & Promotions 1,200,000 1,200,000 1,200,000 1,200,000 Delivery
Charges 144,000 144,000 144,000 144,000 Total Expenses 7,488,100 7,488,100 7,488,100 7,488,100 Net Income 3,719,602 4,279,987 4,103,466 4,625,086 Tax
1,115,881 1,283,996 1,231,040 1,387,526 EAT 2,603,721 2,995,991 2,872,426 3,237,560
45. 45. Profits for the First 4 Years 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 1 2 3 4
46. 46. Break Even Analysis Direct Costs COGS 31,120,361 Indirect Costs Salaries 9,600,000 Rent 9,600,000 Electricity 1,200,000 Water 480,000 Depreciation
656,400 Professional Fees 2,000,000 Maintenance 720,000 Advertising & Promotions 4,800,000 Delivery 576,000 Start up expenses 4,198,500 Telephone 240,000
Insurance 80,000 Total Cost 65,271,261 Average Sales Price per unit 342 Average Cost per unit 287 Break even Point 190,680 The restaurant will break even at
190,680 unit sales. This will take place in the fourth year of operations. Break Even Analysis Calculations: Average Sales Price per unit = Revenue of Unit Meals +
Revenue of Unit Drinks Total Unit Meals + Total Unit Drinks Average Cost per unit = Direct Cost + Indirect Cost___ Total Unit Meals + Total Unit Drinks Break
Even Point = Total Cost_________ Average Sales Price per unit
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