Topic: Business Development plan on – Whitely Express delivery Dry cleaning services for hotels & homes in London.

This is the recommended structure for My BDP- Coursework

My Business Development plan is on – Whitely Express delivery Dry cleaning services for hotels & homes in London.

Basically, this BDP will focus on providing express dry cleaning services to some hotels and homes (General consumers) in need of dry cleaning with the advantage of having it delivered same or next day. Also, the use of applications (Apps) to keep consumers up-to-date with when their clothes are being washed and ready for pick up or drop off. Vans will be used to deliver to customers. Dry cleaning contracts will be taken from Hotels to supply their dry cleaning needs. The company name for this BDP is Whitely Express Delivery Dry Cleaning services.

Please click this link for better understanding of a Dry cleaning BDP.

http://www.bplans.com/dry_cleaning_home_delivery_business_plan/executive_summary_fc.php

Important Requirements- PLEASE CAREFULLY READ THROUGH THIS DOCUMENT TO GET FULL UNDERSTAND OF WHAT IS REQUIRED. THAK YOU

STRUCTURE AND CONTENT OF THE BUSINESS DEVELOPMENT PLAN
What are the expectations ?

The assessors receiving the plan, have the following expectations : –

• A well structured, well presented, customer focused, coherent plan

• A well defined business opportunity, the potential, the market, key customers, the competition and
suppliers

• Stated assumptions and realistic forecasts

• How business differentiation will be achieved and sustained

• Identifies the risk exposure and how these risks can be mitigated

• The management team and business alliances

• Funding needs, deployment of funds and projected return on investment together with business growth forecasts

THE BUSINESS PLAN OUTLINE FOR A NEW BUSINESS START UP
TITLE PAGE
What follows, is a template which should act as a guide. Modifications, as deemed relevant should be made to achieve the tasks in hand as specified in the business development role brief.
THE EXECUTIVE SUMMARY
The Executive Summary is designed as a precis of the full plan and in some cases would be a stand-alone document sufficient to present the opportunity to those who will provide sources of capital. Greater detail is then presented in the main body of the plan.

The outline contents are as follows : –
• The Business Opportunity
• Current Business Position (if any)
• The Market and Customer Acceptance
• Business Potential
• Strategies for Competitive Advantage
• Revenue and Profit Forecasts
• Capital Required and Timing
• The Team
• The Offerings to the Investor / Lender
• Legal structure and Ownership
• Key Partners (if any)
INDICATIVE CONTENTS PAGE
1. The Industry, Company & Products

2. The Market, Market Analysis & Market Research

3. Cost / Volume / Profit Analysis

4. Marketing Plan

5. Design & Development Plan

6. The Management Team

7. Operations Plan

8. Sustainability

9. Schedule for Implementation

10. Business Contacts

11. Financial Projection

12. Proposed Offer
1. THE INDUSTRY, THE COMPANY AND THE PRODUCT (S)

• The Industry, its location, size & growth rate
• The Company, its location
• The Company formation, history and performance to-date (if any)
• The New Product / Service Concept
• Key Success Factors
• Long term potential
2. THE MARKET, MARKET ANALYSIS AND MARKET RESEARCH

• The Market, size and trends
• Customers by Market Segment
• Buying behaviour
• Competitors
• Established market share and sales projections
• Competitive Positioning
• Value Propositions for Core Customer Groups

3. COST / VOLUME / PROFIT ANALYSIS
• Gross and Operating Margins
• Profit Potential and Duration
• Fixed & Variable Costs
• Break-Even Analysis
• Time to Break-Even
• Time to Positive Cash Flow
• Venture and Working Capital Needs
4. MARKETING PLAN

• Overall Marketing Strategy for market penetration and market development
• Internal, Interactive and External Marketing
• Customer Relationship Management
5. DESIGN AND DEVELOPMENT PLAN
• Development Stages
• Project Planning
• Patents or Intellectual Property Rights
• Development Costs

6. THE MANAGEMENT TEAM
• Organisation Chart
• Key Personnel (credentials in appendix)
• Ownership
• Compensation Plans
• Other Investors
7. OPERATIONS PLAN
• Business Locations
• Supply Chain Management
• Operating Cycle
• Manufacturing Plan
• Facilities & Equipment
• Logistics
8. SUSTAINABILITY
• Critical Success Factors
• Risk Assessment
• Issues for Future Sustainability
• Performance Management
• IT Requirements
9. SCHEDULE FOR IMPLEMENTATION
10. BUSINESS CONTROLS
11. FINANCIAL PROJECTIONS
• Assumptions
• Source and Application of Funds
• Forecasted Income Statements
• Forecasted Balance Sheets
• Forecasted Cash Flow
• Cost Management
12. PROPOSED OFFER (if applicable)
• Financing Required
? Equity Financing
? Debt Financing
• The Offering
• Capitalisation
• Return on Investment
• Prospects for Investors / Lenders
6. VIABILITY
The new business venture will have a final question to be answered by the management team and its financial supporters.

“ IS THIS VIABLE ? ”
The business concept has been designed, tested, assessed, reviewed and has now been planned for.

If the investment required is forthcoming, there remains a personal question to be answered by the potential business owners or the individual entrepreneur
11.
This is the recommended structure for My BDP- Coursework

My Business Development plan is on – Whitely Express delivery Dry cleaning services for hotels & homes in London.

Please click this link for better understanding of a Dry cleaning BDP.
http://www.bplans.com/dry_cleaning_home_delivery_business_plan/executive_summary_fc.php

Important Requirements- PLEASE CAREFULLY READ THROUGH THIS DOCUMENT TO GET FULL UNDERSTAND OF WHAT IS REQUIRED. THAK YOU
References and Bibliography for this work should be from articles of 2010 upwards, so from 2010-2015

STRUCTURE AND CONTENT OF THE BUSINESS DEVELOPMENT PLAN
What are the expectations ?

The assessors receiving the plan have the following expectations: –

• A well structured, well presented, customer focused, coherent plan

• A well defined business opportunity, the potential, the market, key customers, the competition and
Suppliers

• Stated assumptions and realistic forecasts

• How business differentiation will be achieved and sustained

• Identifies the risk exposure and how these risks can be mitigated

• The management team and business alliances

• Funding needs, deployment of funds and projected return on investment together with business growth forecasts

INDICATIVE CONTENTS PAGE
1. The Industry, Company & Products

2. The Market, Market Analysis & Market Research

3. Cost / Volume / Profit Analysis

4. Marketing Plan

5. Design & Development Plan

6. The Management Team

7. Operations Plan

8. Sustainability

9. Schedule for Implementation

10. Business Contacts

11. Financial Projection

12. Proposed Offer

1. THE INDUSTRY, THE COMPANY AND THE PRODUCT (S)

9. SCHEDULE FOR IMPLEMENTATION
10. BUSINESS CONTROLS
11. FINANCIAL PROJECTIONS
• Assumptions
• Source and Application of Funds
• Forecasted Income Statements
• Forecasted Balance Sheets
• Forecasted Cash Flow
• Cost Management
12. PROPOSED OFFER (if applicable)
• Financing Required
? Equity Financing
? Debt Financing
• The Offering
• Capitalisation
• Return on Investment
• Prospects for Investors / Lenders

6. VIABILITY
The new business venture will have a final question to be answered by the management team and its financial supporters.

“ IS THIS VIABLE ? ”
The business concept has been designed, tested, assessed, reviewed and has now been planned for.

If the investment required is forthcoming, there remains a personal question to be answered by the potential business owners or the individual entrepreneur
TO GO AHEAD OR NOT !!!

The Commitment required and the sacrifices to be made to enjoy the projected gains must be assessed !!

PART 3

SCENARIO
BUSINESS DEVELOPMENT PROPOSAL

A NEW BUSINESS START UP AS AN ENTREPRENEUR
INTRODUCTION

SCENARIO
BUSINESS DEVELOPMENT PROPOSAL — NEW BUSINESS START UP
SAMPLE REPORT STRUCTURE

CHAPTER TITLE
INDICATIVE CONTENT
INDICATIVE A4 PAGES
INDICATIVE WORD COUNT GUIDE

EXECUTIVE
Make your business case to outline the business
2
300 – 500
SUMMARY opportunity, the market needs and the business
potential. State the industry, market context & market
location with forecasts for future outcomes and
investment requirements. The Executive Summary
should be a precis of the full Business Development
Proposal.
CHAPTER
TITLE
INDICATIVE CONTENT
INDICATIVE A4 PAGES
INDICATIVE WORD COUNT GUIDE

PART 1 ?
INTRODUCTION
• Rationale as to why you have selected this business opportunity

• Terms of Reference for the business development proposal

• The Approach taken to the design & structure of the report

• Relevant Models and Evidence
Sources used

• Actionable Assumptions

• Timescales for achievement
2 – 3
600 – 1200
CHAPTER
TITLE
INDICATIVE CONTENT
INDICATIVE A4 PAGES
INDICATIVE WORD COUNT GUIDE

PART 1 ?
THE BUSINESS CONCEPT
• Description of the Business
Concept

• The Concept Statement
* The Product / Service
* Target Market
* Value Added
* Specific Features
* Who Is Involved

• The Window of Opportunity
* The Timing
* The Scale of Potential Business
2 – 3
600 – 1100

CHAPTER
TITLE
INDICATIVE CONTENT
INDICATIVE A4 PAGES
INDICATIVE WORD COUNT GUIDE

PART 1 ?
FEASIBILITY RESEARCH
• The Feasibility Research Plan

• Primary & Secondary Data Needs

• Research Methodologies

• 5 Key Areas of Feasibility Research
* Product / Service
* Industry
* Market
* Organisational
* Financial

• Results of the Research in terms of Ambition Vs Ability
• Emergent Resource Needs (if any)

• Academic Referencing as appropriate
15 – 20
3000 – 5200

CHAPTER
TITLE
INDICATIVE CONTENT
INDICATIVE A4 PAGES
INDICATIVE WORD COUNT GUIDE

PART 1 ?
THE BUSINESS MODEL
• Introduction to Your Business Model
• Each element in the model should be explained
• The Core Strategy
• Competitive Advantage & Sustainability
• Resource Needs
• Essential Networks & Partnerships
• How Value Is Added
• A Summary Business Model Canvas to show how the model fits together
• Selected Models from the MBA Course
should be applied
• Academic Referencing as appropriate
5
1000 – 1300

CHAPTER
TITLE
INDICATIVE CONTENT
INDICATIVE A4 PAGES
INDICATIVE WORD COUNT GUIDE

PART 2 ?
THE BUSINESS PLAN
• A Step-By-Step Approach to deliver The Business Model
• To answer Key Questions
* Where Are We Now & Where Have We Come From ?
* Where We Would Like To Be & By When ?
* How We Propose To Get There ?
* How To Ensure Arrival ?
* What Will Be The Expected Outcomes ?
• A Statement of Likely Risks & How These Can Be Managed
• Critical Factors for Success
• Viability of the Plan
• Budgets & Investment Required
15 – 20
3000 – 4200

CHAPTER
TITLE
INDICATIVE CONTENT
INDICATIVE
A4 PAGES
INDICATIVE WORD COUNT GUIDE

APPENDICES
• Supportive Evidence & Documentation for the chapters as appropriate

• Bibliography

• References
6 – 8
–

TOTAL
40 – 45
9000 – 12,000

NOTES
PART 1 is the Analysis Phase which is designed to contain the Business Concept together with a feasibility
study to produce a business model.

PART 2 is the Proposed Business Plan designed to deliver the business model.
PAGE LAYOUT
CONVENTIONS

Report Format with 4cm left margin, 3cm top and bottom, 1.5 spacing, approximately 300 words per page, Font size 12, Times New Roman

WORD LIMITATIONS

Word-count does not include words in charts & tables, footnotes & appendices. The word-count allocated for each chapter are approximations only.
PART 4
A WORKED EXAMPLE

BUSINESS DEVELOPMENT PROPOSAL FOR A NEW BUSINESS

THE PAPAYA RESTAURANT IN LONDON

CONTENTS

Page
EXECUTIVE SUMMARY 67
1. INTRODUCTION
1.1 TERMS OF REFERENCE 69
1.2 APPROACH 70
1.3 CONCEPTS & MODELS APPLIED 71
1.4 LITERATURE SOURCES 73
1.5 ASSUMPTIONS 74
1.6 TIMESCALES 74
2. THE BUSINESS CONCEPT 75
3. FEASIBILITY RESEARCH 78
4. THE BUSINESS MODEL 89
5. THE BUSINESS PLAN 106

BUSINESS PLAN FOR THE PAPAYA RESTAURANT
Page
1. THE INDUSTRY, COMPANY & PRODUCTS 112
2. THE MARKET 113
3. COST / VOLUME / PROFIT ANALYSIS 115
4. MARKETING PLAN 117
5. DEVELOPMENT PLAN 141
6. THE MANAGEMENT TEAM 143
7. OPERATIONS PLAN 144
8. BUSINESS SUSTAINABILITY & RISK ASSESSMENT 146
9. IMPLEMENTATION SCHEDULE 150
10. FINANCIAL PROJECTIONS 151

THE PAPAYA RESTAURANT BUSINESS DEVELOPMENT PROPOSAL
EXECUTIVE SUMMARY

Within the licensed restaurant market space in London, there is a business opportunity to establish a restaurant that combines the classical dishes from selected South East Asian countries which until now have been served in dedicated country based restaurants.
The opportunity is for a Multi-Asian Cuisine Restaurant serving food from Thailand, Singapore, Malaysia & Indonesia as a hybrid restaurant offering an eclectic experience for customers. The market need has been confirmed, there is growth in this sector of the restaurant industry and the business potential would suggest a future horizon for a potential chain of restaurants with longer term franchising potential.
The restaurant will be named “ PAPAYA ” to symbolise a tropical fruit which crosses these Asian country cultures and is widely known.
The market location for this business start-up, will be in Bayswater London W2 a vibrant area where there is a ‘retail concentration’ for restaurants and dining opportunities. This business development proposal outlines the business concept, feasibility studies completed, the business model in detail together with the business development plan for the launch of a sustainable new business with financial projections and risk assessments.

1. INTRODUCTION

The business opportunity presented here for a new licensed restaurant in London has been inspired by the ambition of a group of friends who are experienced in restaurant management & business consulting.
After knowing each other for around seven years and with the shared passion to open a New Style restaurant offering Multi-Asian Cuisine at a mid-market price, the business concept has taken shape over the past 2 years during which time seed funding for the new venture has been put together.
This proposal explains the business concept, makes the business case and through feasibility research proposes a workable business model.
This proposal culminates in a business plan for the new business venture.

1.1 Terms of Reference

This business development proposal for the Papaya Restaurant is designed to : –

1.1.1 Outline the New Business Concept
1.1.2 Assess the Existing Position and Readiness for the New Business Venture
1.1.3 States, as appropriate, assumptions upon which the new business development proposals and financial projections are based

1.1.4 Produce adequate research to assess the feasibility of the new business concept
1.1.5 Produce a Business Model with well-defined resources requirements and constraints as deemed appropriate

1.1.6 Design & complete a business development plan for the New Venture, together with the requirements for implementation and the expected financial outcomes for shareholders, over the next 3 years

1.2 Approach

The sequential nature of this proposal is driven from an explanation of the business concept for the Papaya Restaurant to include the essence of the concept statement and from this basis, details of the feasibility research undertaken is then outlined.
From the positive findings of the feasibility studies completed, the case is made to proceed to the creation of a business model to show how the new business will create value and then produce sustainable net cashflow and profit.
From these foundations, a business plan is designed to show how the business is intended to work over the next
three years to give a positive return on investment for the shareholders.

1.3 Concepts, Models and Frameworks for Thinking Applied

This assignment is the final stage of the MBA and as a final project, it is designed to integrate the learning acquired and integrate it into a final project paper, in this case for a new business start-up.
The MBA course has been essential to achieve this outcome.
The Concept Models and Tools used in the creation of the Proposal are as follows : –

• Assumption Setting
• Timescales For Achievement
• The Concept Statement
• Target Market
• Value Added
• Value Propositions
• Window of Opportunity

• Feasibility Research
• Industry Attractiveness
• Market Gap
• Market Attractiveness
• Segmentation
• Buying Behaviour
• Start-Up Capital
• Working Capital
• Cash Flow
• Break-Even Analysis
• The Business Model Canvas
• Competitive Strategy
• Value Chain
• The Business Plan
• The Marketing Plan
• Risk Assessment
• Development & Operations Plans, Implementation Plan
• Business Sustainability
• Financial Statements

1.4 Relevant Core MBA Module Literature Sources : Textbooks and Manual : –

• Brooks, R. (2009), Financial Management : Core Concepts, 1st Edition, Pearson Education
• Hiisch, R., Peters, M. and Shepherd, D. (2009), Entrepreneurship, Erwin McGraw-Hill
• Johnson, J., Whittington R. & Scholes (2011), Exploring Corporate Strategy, 9th Edition, Pearson Education
• Lancaster, G. and Massingham, L. (2011), Essentials of Marketing Management, Routledge
• LSC, Entrepreneurship & Management Skills, MBA Course Manual

1.5 Actionable Assumptions
The following assumptions are made as a foundation for the business proposal.

• Following the acceptance of the proposal for the MBA final Project, the business development team will pursue this new business concept as detailed.

• Market Demand, as assessed, is sustainable.

• The team remain committed to the New Venture.

• The business environment in London’s Bayswater area where the restaurant is located remain
buoyant despite national economic turbulence.

• Funds will be deployed in accordance with the budgets prepared and bank facilities will be available for overdraft utilisation.

• The preparation of the restaurant will be effectively project managed by the appointed consultants
& restaurant architects.

• Chefs remain committed to the project.
1.6 Timescale
This proposal for the business start-up and follow-through will be for an initial 3-year period.

2. THE BUSINESS CONCEPT

“ An Innovation requires an instinctive understanding of what your customer wants ”
— Richard Branson
DTI Innovation Lecture 1998

Bessant and Tidd (2011, p19) state the routes to innovation, and in this sense Papaya, will require a paradigm shift in the mind of the customer to achieve the required product innovation. A UK government White Paper ‘Innovation Nation’ 2007 claimed that Innovation is the successful exploration of new ideas. In all respects, Papaya is an innovation where the idea will be recognised as an opportunity to create value.
2.1 Outline Description of the Business
This entrepreneurial business development proposal is for a new full service restaurant as a start-up business. The business is intended as an innovation into a crowded London market whereby Multi-Asian Cuisine will be presented under the proposed restaurant name of ‘ Papaya ’ (which is a tropical fruit grown and widely loved throughout South East Asia).

2.2 The Concept Statement
The business concept statement, which also has been subjected to feasibility research, among focus groups of potential customers is as follows : –

2.2.1 The Product / Service
The restaurant’s 180-seats capacity, located in Bayswater’s Westbourne Grove London W2 is to be situated in a busy, trendy area where a wide provision of restaurant experiences prevail. A mid-market dining experience is envisaged with take-away food orders catered for by phone and on-line.

Classical traditional dishes will be served from Thailand, Malaysia, Singapore and Indonesia to provide a ‘taste of the Asean Region’.
2.2.2 The Target Market and Value Added Features
The primary target market will be drawn from local patronage of customers of all age, gender & social groupings, favourably disposed to Asian Cuisine, living within a 2-mile radius, although a substantial secondary market will be from tourists visiting Bayswater.

The take-away market will be from those living in local apartments and nearby hotels for which
a delivery service through a restaurant courier service called ‘Room Service’ will be available.

The wide variety of cuisine textures & flavours will provide a unique experience presented as a themed restaurant setting, which represents a tropical setting using cane & rattan furniture and ‘jungle like’ planting.

Special features of the restaurant are the 4 chefs each from the respective culinary offered on the menu.
2.2.3 Those Involved
The investors are Michael Yoke, a Malaysian restauranteur with 20 years experience in London’s Chinatown. Wendy Goh as the business manager who has worked with Michael Yoke for 10 years. Adrian Mason, a British businessman who has a management consulting business in South East Asia with offices in each of the few countries of the selected cuisines for the new restaurant. Each of the four chefs have a minimum of 5 years experience in London Hotels and Restaurants. Local accountants and lawyers have been appointed and bank accounts opened.
2.2.4 The Window of Opportunity
The site selected for the Restaurant has become available because the existing lease on the current Chinese restaurant has expired and the owners seek to return to Malaysia. They are family friends to Michael Yoke.

The current landlord will extend a new lease for 10 years. The new restaurant is planned to open within the next 6 months.

3. FEASIBILITY RESEARCH

The ‘innovation space’ for the new restaurant will require a business case to be built and this is where feasibility research is required to align potential ambition with commercial ability and in turn create value to grow new ventures. ‘The value of validating a New Business idea’ according to Barringer and Ireland (2010) is at the heart of feasibility analysis.

Goffin and Mitchell (2010 claims that one key ingredient to assess commercial feasibility is customer
focused ideas.
It is against this backcloth that feasibility for the Papaya Restaurant has been undertaken.
The purpose of the feasibility research undertaken was to determine ‘the gap in the market’ and ‘the market in the gap’ to thereby reduce the risk in the commercial decision to start this new restaurant business.

Two Questions were answered :

(1) Is the local restaurant industry ‘space’ attractive ?
(2) Is there viable market demand ?

3.1 Restaurant Industry Attractiveness
The market space remains attractive, with the numbers of restaurants in London growing across all sectors, within the location of London’s Bayswater, even though the maturity stage of the industry life cycle is apparent, business is this industry location remains sustainable.

Within a 2-mile radius, there are over 350 restaurants, but all serving a range of ‘focused cuisine’, including fast food restaurants. There is no direct competition for Multi-Asian Cuisines. Competition will be from dedicated Thai and Indonesian cuisines only, of which there is one Indonesian and six Thai restaurants, each well established for the past 7 years or more.

The barriers to entry into the restaurant industry are low, close substitute food products are diverse and the bargaining power resides with the customer. However the industry upside potential remains buoyant.
3.2 Market Attractiveness
Primary Research
Focus Group Research was conducted among
(1) Potential Customers – 4 Focus Group discussions of 8 people
(2) Restaurant Owners – 1 Focus Group discussion of 5 people

The concept testing results arising both Potential Customers and Restaurant Owners confirms there is a gap in the market. Moreover there was enthusiasm among those who would be potential customers.
The Key Customer Groups which have been determined are as follows in Figure 1 below : –

POTENTIAL BUYING BEHAVIOUR FOR THE PAPAYA RESTAURANT

Forecasted
% Revenue

Lunch Time
12.30 – 3.00 pm

Early Dinner 6pm – 8pm

Late Dinner 8pm – 11pm

Take Away
Evenings

Room Service Courier Evenings

? ?

? ?
?

?
?

? ?

100

FIGURE 1

Overtime, the core business from local businesses and local residents should achieve growth in customer value, through purchase loyalty.

Meeting the needs of these core customers is critical.

The motives which will induce and sustain purchase as determined from Focus Groups and through our
experience will be : –

• Menu & Cuisine
• Consistent Taste & Quality
• Customer Recognition & High Service Levels
• Location and Ambience
• Customer Privilege Loyalty Cards
At this stage, the market is attractive, revenue streams will be achieved from six sources and the primary target market group has been determined. Both local businesses and local residents within the immediate location have a substantial potential customer base, once the awareness has been built.

3.3 Organisational Feasibility
Before the restaurant concept was created, the group of investors were convinced that this new business is
‘doable’.

The ability is thus from experience, sourcing of chefs required skill sets in addition to the existing learning from working together before.

From a behavioural and work ethic perspective the venture is feasible, moreover the enthusiasm, energy levels and determination to succeed will be the backbone of the business culture.

The risk appetite is related mainly to the financial aspect of the venture.
3.4 Financial Feasibility
Financial Resources are required for : –
1. The New Venture Start Up
2. The Working Capital to achieve break-even

The New Venture Start-Up requires funding for : –
1. The Lease
2. Equipping the Restaurant
3. Restaurant Renovation

The Working Capital Requirements relate to : –

1. Labour Costs

2. Premises Rental

3. Utilities

4. Food & Beverage Costs

5. Business Administration
The Opportunity Cost for this new venture would mean that the parties involved would not devote time, resources and energy to other projects. All are committed to making this project a success.

It is anticipated that the return on investment over a 3-year period will exceed the cost of capital and provide a source of employment/earnings from the business which will be within an acceptable range.

Once the customer base grows and the business concept is proven, growth will be achieved by opening other
restaurants and eventually offering a franchise opportunity to potential franchisees as new investors.

There is confidence from a financial perspective that The Papaya Restaurant will succeed.

3.4.1 The Start-Up Capital
The start-up capital to acquire the lease for the premises is £185,000 which has been negotiated down from a figure of £200,000 sought by the premises freeholder. This is the premium paid to acquire the 10-year lease and will be treated as a sunk cost, unless the business can be sold on to another buyer within the 10-year period and part of this premium could be recovered. This is the ‘risk capital’ element for the start-up.

This sum has been sourced by all the investors involved without the need for any borrowing.
Other capital costs to cover total renovation would be incurred. The total start-up capital required will be approximately £450,000. The details will be shown in the business model.
3.4.2 The Working Capital Required
After renovation a major fixed cost to be borne across the 10-year period is an annual rental of
£85,000, with a rental review at 5-year intervals.

Thereafter the cost of restaurant operations are shown on the cash flow statements in the business model.

The first year of operation will require a working capital budget of £500,000, excluding raw materials costs for food and beverage.

The details will be shown in the business model.

3.4.3 The Source of Funding for the working capital has been secured by
1. A medium term loan *
2. An overdraft facility *
3. Business cash flows from trading

* Both secured upon the lease of the premises.
3.4.4 Cash Flow
Primarily, the core income from the core customer groups will be derived from lunchtime and
evening ‘in-dining’.

Customers (covers) per day and average spend per day is therefore the basis of the sales revenue
forecasts. Non-dining customers is considered as supplementary customer income.

The cash flow estimates will be based upon cash inflows and outflows to determine an operating cash flow. Capital and operational expenses (OPEX and CAPEX) to be met from cash flow must be captured so that a net cash flow position can be assessed and reconciled with the Cash Position at the bank.

The budgeted cash flow requirements for the first year of operation, amount to capital costs of
£400,000 and operational expenses of £500,000, the latter will be offset against income and the former received from profits over years 2 and 3.

The supporting details are contained within the business model.
A projected positive operating cash flow will be achieved after break-even which can be achieved within the anticipated time frame. The financial risk is therefore modest and within the range anticipated. More detailed financial analysis will be completed within the business model.

3.5 Estimated Break Even

From the financial projections and assumptions made, the restaurant is targeted to achieve a financial break- even position within the first 2 years.

This will require a seating capacity utilisation of the premises of 40% on an average.
3.6 Cost of Failure

On the assumption that the lease premium could be recovered, the costs of failure would relate to the negative cash flow position and related losses.

In the restaurant business, it is necessary to be patient to allow regular trade to build up. The break-even projections are realistic and not considered to be too ambitious.
The investors have confidence that the new business will succeed.

The initial and overall indications are good, the business model will seek to contain the financial position in more detail.

3.7 Results of the Feasibility Research

From the initial feasibility research, there is substantial confidence that the team investing in the new business start-up have the ability to achieve the business ambition. The benefit of the feasibility research has presented confidence to proceed to the business modelling stage.

At this initial stage, the resource needs for this entrepreneurial business strategy have been assessed and have been adequately covered in the assessments completed.

4. THE BUSINESS MODEL FOR THE PAPAYA RESTAURANT

The development of an effective Business Model (to show how the new business will compete through structures, relationships interfaces with customers to create sustainable value to earn profit, according to Barringer (2010, pp202 – 203)) is essential. He further argues that a value chain based approach to allow the business model to emerge is valuable for new business start-ups. This approach enables a careful assessment of strategic resources to be made for competitive advantage.

Davila, Epstein and Shelton (2013, pp32) imply, that overtime, the business model will change through subsequent innovation to value propositions, the supply chain and target customers. This will be borne in mind in the development of the business plan.

An opportunity gap exists in the heart of London for a ‘ Multi-Asian Cuisine restaurant ’.
The new business concept, a hybrid of tastes & food texture from South East Asia, has been tested using primary research.
Initial feasibility study results gives confidence to proceed to build the business model for the new restaurant to show how the intended business is to make money.

In this way, clarity for the new business is now presented from discussions, analysis and groundwork completed.

A Business Model Canvas (Figure 2) has been adopted to build the business model and thereby determines the core strategy for business sustainability, through delivering a valued customer experience at the Papaya Restaurant.

BUSINESS MODEL CANVAS
1 NEW BUSINESS DRIVERS
3
CORE
CUSTOMERS
SUPERIOR VALUE PROPOSITIONS
4
CHANNELS
6
KEY ACTIVITIES

7
8

VALUE CHAIN BASED RESOURCES
2
I D E N T I T Y

COMPETITION / COMPETITIVE STRATEGY

5
RELATIONSHIPS & NETWORKS, ALLIANCES

9
KEY PARTNERSHIPS
10
COSTS & COST BUDGET
11 REVENUE STREAMS & CASHFLOW
12
Modifed from Osterwalder A. & Pigneur Y. (2010)

FIGURE 2

THE BUSINESS DRIVERS

The business is driven by a group of friends who have known each other for over the past 7 years as work colleagues in the restaurant business and other investors who have witnessed their work ethics as customers. It is a combined ambition to open ‘own restaurant’ as business owners and not as an employees as a first combined entrepreneurial activity back by the sound consultancy experience of one of the main investors.

IDENTITY

The new PAPAYA was concept tested during focus group research and was selected as being relevant to the cuisine and also gender neutral ie. being acceptable to male & female and from the customers across age & occupation groupings.

The Papaya fruit speaks for South East Asia as a well-known tropical fruit. It has iconic value.
The ownership of the restaurant has the depth of experience that will help the restaurant to flourish and grow in abundance, just like the papaya fruit. It is felt to be ‘lucky’ for the restaurant. The colours related to the fruit from green to orange as it ripens will be used in the restaurant colour scheme to reinforce the tropical origins of each cuisine.

CORE CUSTOMERS

The Priority Segments will be : –
1. Local Business Employees and Owners
2. Residents within the local area
3. Hotel and Apartment Guests and Hotel Concierge Referrals
4. Students
5. Tourists
It is for these customer groups needs that the Papaya Restaurant is designed for.
THE VALUE PROPOSITIONS
THE VALUE ADDED APPEAL

EMOTIONAL Papaya — a combination of superb tastes from the roots tastes of Asia all under one roof, Thailand, Malaysia, Singapore, Indonesia. All the classical dishes on one menu served in a tropical jungle ambience.

FUNCTIONAL Good location, easy parking, chefs & food from 4 countries, no rush restaurant, fully- licensed with beer, wines and spirits from all 4 home countries.

PRICE Affordable price, good value for money, loyalty scheme.
COMPETITIVE Unique Restaurant Concept, completely new, excellent friendly service.

ETHICAL Organic vegetables, Halal meats.
MARKET RELEVANCE

Meets a gap in the competitive licensed restaurant market in Bayswater London with wide market appeal.

COMPETITION & COMPETITIVE STRATEGY
There is no direct competition, other Asian Cuisine Restaurants are dedicated to one country of origin. There
is no Multi-Asian Cuisine restaurant in London.

The competitive strategy is to attract customers from existing restaurants to build local market share, but also to stimulate new demand for regular diners at Papaya.

Segment Focus for Business Lunches will be by providing a set lunch option at a fixed price, supported by a privilege Papaya loyalty card for business diners redeemable up until 8pm.

First time customers will be invited to the Privilege Loyalty Card Club to build a ‘local community’ for the restaurant.

The intention is for customer centricity as well as food differentiation at a price that will not deter repeat
visits.

CHANNELS

Customers will reach Papaya from a number of channels : –

1. On-line website for orders and outsourced deliveries
2. Room-Service courier system — a syndicated provider across London for hotel and home delivery
3. Direct walk-in Customers across many market segments
4. Hotel Concierge Services – through word of mouth recommendation
5. Direct Marketing to Local Businesses

There is a need to build multiple channels to communicate awareness and reach through to target market
groups.

KEY ACTIVITIES

Papaya will provide licensed Restaurant and Take Away Services for all four cuisines across lunch time and dinner services opening from 11am to 11pm, 7 days per week delivered with experienced restaurant management and chefs to provide a unique dining experience for the tastes of South East Asia.

VALUE CHAIN BASED RESOURCES

The non-financial resource needs have been assessed using a value chain based concept to simplify what is required to enable the restaurant to function and how this functionally can be achieved. The original work of Porter (1985, 1996) on Value Chains has been modified to retain the usefulness of the concept, but to focus upon primary activities which produce incremental value. The approach which follows is more characteristic of the McKinsey approach.
Figure 2 below outlines in detail the resource requirements and how these will be met to ensure that the restaurant is adequately resourced for business start-up & sustainability.

1. THE RESTAURANT

Restaurant architect & project management Local Advertising Agency Restaurant Manager
Restaurant architect & project management Chefs Restaurant Manager Outsource

2. THE MENU

3. THE SYSTEMS

4. COMPLIANCE

Page 97

5. RESTAURANT STAFFING
Existing Appointments New Appointments To Be Made Soon Outsource Contract
6. PROFESSIONAL SERVICES

FIGURE 2

The additional resource implications over and above the ‘new set up team’ therefore relates to : –

1. A Restaurant Architect and Project Manager
2. Local advertising agency
3. Outsourced Professional Cleaners
4. IT Consultant / Vendor
All of which will need to be budgeted for within this business model.

RELATIONSHIPS, NETWORKS & ALLIANCES
Good relationships must be built with the local community, local authorities and local charities. Networking with the local Small to Medium Size Enterprise Association will fast track the learning for this new business start-up.
Alliances with suppliers are important, because there will be times where the business may face unexpected
turbulence, food supply chain support and management is vital.
Above all the customer experience must be managed collectively by all staff as a ‘customer team’ to ensure that all customers are treated as guests. In turn, customer networks will soon know about ‘ the Papaya ’ and, in turn, generate new customers.
KEY PARTNERSHIPS
Within the group of investors, ‘ The Papaya ’ is to be formed as a private limited company with 4 partners ;
Michael Yoke, Wendy Goh, Adrian Mason and the 4 Chefs as shareholders.

The business Partnership has Equity Shareholding as follows : –
%
Michael Yoke 30
Wendy Goh 20
Adrian Mason 30
The 4 Chefs 20
This structure has been agreed by all, dividends payable proportionate to shareholding held.

COST & COST BUDGET
OPERATIONAL COSTS (OPEX) YEAR 1
WITHOUT RAW MATERIALS & BEVERAGE COST

( £ k )

CAPITAL COSTS (OPEX)

( £ k )

Staffing
Restaurant Manager Chefs
Kitchen Staff Bar Staff Waiting Staff Administration

270

Property Lease 155
Renovation Costs 110
New Kitchen Design & Costs 60
Interior Design & Fittings 50
Seating & Table 20
IT Systems 5

Annual Rent 85
Utilities 25
Professional Fees 10
Licenses 5
Insurance 10
Marketing 20
Maintenance 5
Sundry Expenses 10
Bank Interest 30
Contingency 30

Total
Capital Introduced By Partners Balance On Capital A/C
(400)

450
50
(500)

THE COST ESTIMATES FOR THE START UP ARE £400,000 CAPITAL COST PLUS FIRST YEAR OPERATIONAL COSTS OF
£500,000 EXCLUDING FOOD & BEVERAGE COSTS.

REVENUE & CASH FLOW FORECAST

REVENUE INFLOW

Year 1 %
( £ k )

From Credit Card & Cash Sales
Lunch 450 36
Evening 800 64
TOTALS 1,250 100
CASH OUTFLOW
Raw Natural Costs Food & Beverage 415 45

Operational Costs from Cost Budget (Section 11)

500 55

915 100
Operating Cash Flow 335

NOTES :
(1) Positive Cash flow will be achieved within Year 1 of operations.
(2) Food & Beverage Costs are estimated at 1/3 of sales revenue as an aggregated figure.
(3) Repayment of capital introduced would commence in Year 2 after the break even position has been achieved early
in Year 2.

13 REVENUE & EXPENSE FORECAST ASSUMPTIONS

Year 1
Seats 120
Occupancy % on Average Across Lunch & Dinner 40%
Customers Per Day 100
Average Spend £ 34
Daily Revenue £ 3,425
Average Bill Per Head (Pax) *
Food £ 26
Beverage £ 8
Average Cost Per Meal £ 11
Proportion of Revenue from
Credit Cards
90%
Cash 10%
* This is a combined lunch and dinner estimate – The average bill for dinner is 50% higher than lunch owing to alcoholic beverage consumption.

THE ASSESSMENT OF COST, REVENUES AND CASH FLOW PROVIDES A SIGNIFICANT LEVEL OF CONFIDENCE TO PROCEED WITH THIS BUSINESS DEVELOPMENT PLAN BECAUSE THE RESTAURANT HAS THE CAPACITY TO GENERATE FUTURE PROFITS.

THE PROJECTED PROFIT & LOSS POSITION WILL BE SHOWN IN THE BUSINESS PLAN.

THE CORE STRATEGY

The Core Strategy, which emerges from the business model canvas is to secure a sustainable customer centric competitive position. In this respect, The Papaya Restaurant will become acknowledged locally with Bayswater and then within London and Internationally as the leading fully licensed Multi-Asian Cuisine Restaurant which offers a unique dining experience for those who love South East Asian Cuisine.
This distinction will differentiate the restaurant into a significant position among restaurants of quality in London where the Papaya superior value propositions collectively deliver a total customer experience relevant to all segments served.
Overtime, the success of the first venture will lead to future scalability within London and then internationally.

CONCLUSIONS FROM THE BUSINESS MODEL

From the Feasibility Research and the development of the business model there is sustained confidence to proceed to the business plan for the new business start-up and launch.

5. THE BUSINESS PLAN FOR A NEW BUSINESS

“ THE PAPAYA RESTAURANT ” IN LONDON

Page 106

PROLOGUE
A business plan for a start-up often, according to Barringer (2010, pp154), is used to seek the interest of a potential investor but in the case of the Papaya Restaurant this isn’t needed. However the plan will consolidate the business intention and have this documented in detail.

The essence of this type of plan is outlined and discussed by Frieud and Zehle (2009) as an effective sequence from analysis to strategy development, to risk and implementation. This has provided insight with which to modify and apply the following planning template and proposal for the Papaya Restaurant.

However the plan is just a document, it must be lead. The importance and nature of leadership, Gill (2010) cannot be overlooked. The management team will lead Papaya to achieve the intended purpose and desired outcomes.

EXECUTIVE SUMMARY
THE GEOGRAPHIC MARKET LOCATION AND CUSTOMER ACCEPTANCE
Focus Group Research has confirmed customer acceptance for the new restaurant concept with enthusiasm, especially in the busy location of Bayswater, where the market has a concentration of restaurants at levels to serve all market segments.

However, apart from dedicated cuisine restaurants for Thai, Chinese, Indian, Arabian and Italian food, there is no Multi-Asian Cuisine restaurant in this location, or indeed in London.

BUSINESS POTENTIAL

Market Demand has yet to be confirmed. This will not be known until the New Restaurant opens, but from
research within the geographic location in general the restaurant business is buoyant.

The medium term ambition will be to open a small chain of up to 4 restaurants in London and from there franchise the concept within the UK and into Europe.

STRATEGY FOR COMPETITIVE ADVANTAGE
Competitive Advantage will be based upon the following value propositions to differentiate the Papaya Restaurant :
• Multi Asian Cuisine
• Live Seafood – Fish, Prawns, Crabs & Lobsters
• Consistent food quality across all cuisines
• Unique Dining Experience 7 days per week
• Affordable Price
• Friendly, Personalised Customer Service
• Efficient IT supported restaurant operations
• Customer Loyalty Programmes
• On-Line Reservations and On-Line Ordering for home delivery
REVENUE AND PROFIT FORECASTS
Initial costing and budgets indicate that positive cash flow will be achieved within the 1st year of business.
The revenue projections are : Year 1
£1,25000 Year 2
£1,87500 Year 3
£2,50000
The profits before tax : Forecasts are
£285,000
£510,000
£775,000

This indicates a profitable business to provide a sound base for business expansion.

CAPITAL REQUIRED AND TIMING
Upfront Venture Capital required to get the restaurant onstream is £450,000. Working capital requirements will be serviced from a bank overdraft which could be converted to a long term loan in the event that negative cash flow continues for an unexpected period. This is most unlikely. The venture capital is projected to be repaid within 3 years.

THE TEAM
The Team comprises : –

? 4 experienced chefs to offer Thai, Malaysian, Singaporean and Indonesian Cuisine

? Michael Yoke, the Restaurant Manager with 20 years experience

? Wendy Goh, the Business Manager, and accountant and current work colleague of Michael Yoke

? Adrian Mason, myself, a British management consultant with business in South East Asia, currently completing an MBA at London School of Commerce’s Malaysian Campus Location

LEGAL STRUCTURE
The Legal Structure will be a private limited company with shareholding allocated to the equity participation to
provide the start up capital required.

PARTNERS
All members of the Team are partners in this new business.

THE BUSINESS PLAN FOR THE PAPAYA RESTAURANT

1. THE INDUSTRY, COMPANY & PRODUCTS

London’s restaurant industry continues to grow and is in recovery from decline a few years back. 135 new restaurants opened last year. Well over 2000 restaurants are regularly rated which suggests that keen interest is maintained in this sector.
In the UK there are over 70,000 restaurants employing 650,000 people. In total 14,000 restaurants are registered in London.
On average Londoners eat out up to 3 times per week and the current trend is for mid-range, value for money dining. The importance of locally served organic foods is in evidence. Hygiene and service are important factors to build restaurant loyalty.
Even though there is a wide diversity in the London dining scene the New Concept of Multi Asian Cuisine in one
restaurant property is unique.
The new company proposal is to open the Papaya Restaurant as a New Business Start-Up in London’s Bayswater district.

2. THE MARKET

Within a 30-minute radius of Bayswater, there are approximately 350 restaurants and within an immediate one kilometre catchment area, 112 restaurants.

Competition in the nearby vicinity is from established restaurants ; Chinese (14), Indonesian (16), Italian (17), Greek (3), American (5) and Arab (21) cuisines and just one new small Malaysian restaurant.

There are 2 dedicated Thai Restaurants, 1 Indonesian Restaurant, 1 Singapore and Malaysian restaurants. All are established.

These ‘direct’ competitors do not offer Multi-Asian Cuisine. The market is saturated with restaurant provision, but this ‘pulls the crowd’ to Bayswater. This represents a captive market. The challenge is to find a ‘blue ocean’ within an area of intense competition. Queensway and Westbourne Grove are the busiest streets in Bayswater where the Papaya Restaurant will open.
2.1 The Population Base

Bayswater, is one of London’s most cosmopolitan areas with a large local diverse population supported by a high hotel concentration and is quite densely populated.

2.2 Restaurant Customer Base

From within the Bayswater resident base of around 17,000 people all within a small local area there will be a take- away market.

Local businesses within Bayswater comprise a further 10,000 people who are non-residents. This provides a market base for business dining.

Tourists frequent Bayswater for shopping and to visit the attractions of the area. It is easily accessible to Oxford Street, Park Lane, Knightsbridge, Kensington and Notting Hill.

3. COST / VOLUME / PROFIT ANALYSIS

The Gross Margin from the Restaurant Sales is targeted at 66% with the ambition for 68% over 3 years, based upon progressive economies of scale.

This figure is benchmarked upon other similar size restaurants within London and from the experience of managing other restaurants. It is a realistic and achievable figure.

The net profit position, before tax is set at 22% for the first year and forecasted to rise to 31% over 3 years, which is ambitious, but considered achievable if operating efficiencies are achieved as planned.

The restaurant business has high fixed costs which means that the operational gearing is also high. However, with relatively low variable costs, good profits can be made after breakeven is achieved.

Positive cash flow is projected within the first year of operation.

BREAK EVEN ANALYSIS
Unit Costs £
Average Selling Price 34
Variable Cost 11
Unit Contribution to Fixed Costs 23

Contribution Margin 23
Ratio (Unit Contribution ÷ Selling Price) 34

= 67%

Therefore, after Breakeven is achieved 67% of Revenue is Profit (ie. The Profit Volume Ratio)
ie. For every £34 received, £23 is Profit to be distributed, retained and also used to repay investors.

Break Even Point =

Total Fixed Costs * £500 000

= 21, 739 units (meals)

Unit Contribution

£23
Therefore if
100 meals sold per day this equals 217 days (or 0.59 of the 1st year) or 31 weeks or 7.75 months

Therefore Break Even should be within 8 months.

This figure gives the investors confidence with the venture if all assumptions stated in the business model are well- conceived.
* Taken as Operational Costs Expected at Year 1

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4. THE MARKETING PLAN
4.1 COMPANY DIRECTION & STRATEGIC INTENT

4.1.1 THE IDENTITY
The logo below shows the graphic identity for the restaurant.

Attached to this identity are a Vision and Mission to be achieved as well as the Core Values to bind the organisation together under the identity of the Papaya Restaurant brand.

Page 117

4.1.2 THE VISION
Our Vision is to achieve a growth in Papaya Multi Asian Cuisine in the major cities of the world. We will always put smiles on our customers’ faces through the delight from our international menu experienced only at the Papaya Restaurant Chain.
4.1.3 THE MISSION
Our Mission is to achieve acknowledgement from customers and wider stakeholders for the concept of Multi Asian Cuisine as being of significance and value in an evolving restaurant industry. Through the variety and depth of our four ethnic food origins and the values we hold secure, the Papaya Restaurant will win approval and accolades for ‘best restaurant’ within all our business locations, always putting our customers in front of ourselves and looking to ourselves to give our best at all times.
4.1.4 CORE VALUES
• Customer First – at all times and in all business decisions
• Consistency – in service & food quality
• Teamwork – in all business operations
• Growth – to harvest the fruits from the Papaya
• High Energy – sustained through business hours and customer relationships

4.2 BUSINESS OBJECTIVES
• To secure a foothold in the London licensed restaurants market within the next 1 year
• To achieve positive cash flow within 1 year
• To provide a return on shareholder funds that should be repaid from profit within 3 years
• To grow the restaurant concept to other locations within 3 years and to set upon proactive system for the Papaya Restaurant internationally within 5 years
• To achieve competitive differentiation among target customer groups to thereby drive sustainability & growth

4.3 BUSINESS ENVIRONMENTAL REVIEW
From the audit completed, both internally and externally the following SWOT Analysis has been
conceived : –
STRENGTHS
?
WEAKNESSES
?

OPPORTUNITIES
?
THREATS
?
? • Unique Concept ? • Have not run a ? • Confirmed Market in ? • No Explicit
• Gap in the Market business before the market gap Threats at
• Relevant Industry • Emotionally driven • No direct competition this time in
Experience business concept • Premises available this market
• Secure Start-Up Capital • Self determined not • Very good location space
• Creative Menu market driven • 6-months start-up
• Unique Dining window of
Experience opportunity
• Appeal to Multiple • Well-defined business
Customer Segments potential & growth
• Positive Outcomes from opportunities
Feasibility Research

4.3.1 MARKET SEGMENT FOCUS
From the research conducted as well as frequent site visits in Bayswater, together with multiple visits to neighbouring restaurants who may be considered to be ‘the competition’, the following segments have been confirmed for business focus.
4.3.2 CORE BUSINESS SEGMENTS
PRIORITY ?

Local Business Owners & Business Employees for Lunchtime and Early
Evening Dining

PRIORITY ?

Local Residents Within A Captive Area For Late Dining and Take Away Meals
Students Living Locally For Take Away Evening Meals
PRIORITY ?
PRIORITY ?

Hotel Guests and Hotel Concierge Referrals Passing Tourist Trade For Lunch and Early Dinner

4.3.3 MARKET TIMING
A launch with 6 months is considered optimal.

4.4 STRATEGIC MARKETING OBJECTIVES

4.4.1. MARKET PENETRATION
To launch the Papaya Restaurant in Bayswater

YEAR 1 YEAR 2 YEAR 3
?

To secure £1 million Sales Revenue within the 1st year of business ?
To grow the revenue base by 50% year on year ? ?
To create a customer base of at least 5000 in Year 1 and 7000 within 3

years to provide a critical mass of loyal customers within the locality To create a customer community for the Papaya Restaurant

? ? ?
? ?
4.4.2. MARKET DEVELOPMENT
To open 2 more restaurants in other key London locations ?
Achieve £5 million Sales Revenue with 20% profit to sales ratio ?
To build brand recognition and customer affinity for Papaya Multi Asian ? ?
Cuisine

4.5 COMBINED MARKETING STRATEGIES FOR MARKET PENETRATION AND MARKET
DEVELOPMENT

To build upon the core values outlined in Section 1 of the marketing plan, there are superior customer value propositions which should be deemed relevant to secure market penetration. These will be attached to the Papaya brand and be used as a communications platform for the business.
[ These were also outlined in the business model. ]

Emotional – For those who ‘connect with the tastes of South East Asia – it’s all under one roof in a vibrant tropical ambience akin to a jungle environment.
Customers can connect to Thailand, Singapore, Malaysia & Indonesia through
the food.

Functional – Location, Location, Location. Opening hours, parking, ease of access, fully
licensed, no rush.
Competitive – Unique restaurant concept, excellent friendly service
New !!

Product – South East Asian Cuisine from 4 countries
Organic Vegetables, Halal Meats, Live Seafood

Price – Mid-range, affordable, value for money, loyalty scheme

Market Relevance – Wide market appeal among restaurant goers in Bayswater.

These value propositions will serve the marketing strategy requirements for both market penetration and market development.
MARKETING DELIVERABLES TO ACHIEVE MARKET PENETRATION & MARKET DEVELOPMENT

There are three main elements to assure : –

4.5.1 Internal Marketing

4.5.2 External Marketing

4.5.3 Interactive Marketing

TIMESCALES

4.5.1 INTERNAL MARKETING
The following actions will be taken to achieve the Internal Marketing Strategy.

YEAR 1 YEAR 2 YEAR 3

• Design end to end customer service processes ?

• Institutionalise customer service processes to build a ?
customer service culture

• Team building centred upon the core values of Papaya which build ? ? ?
brand value for the Papaya Restaurant

• Daily customer brand communication feedback and brief training sessions to ensure ‘Customer First’ is embedded in the hearts & minds of all staff

? ? ?
• Ensure that everyone knows what the restaurant aims to achieve in its Vision, Mission and Objectives

? ? ?

• Review Progress of Customer Centricity ? ? ?

TIMESCALES

4.5.2 EXTERNAL MARKETING

YEAR 1 YEAR 2 YEAR 3
PRODUCT

(i) OUR FOOD

Feature the range of Multi-Asian Classical Dishes on a creatively designed menu.

? ? ?
Feature the following dishes from Four South East Asian countries with our “ Papaya 8 Signature dishes ”

? ? ?

THAILAND SINGAPORE
1. Thai Gai Pad Met Mamuang
(Stir-fried chicken & cashew nuts)

1. Chicken Rice
(A signature dish)
2. Po Pia Tord
(Fried spring roll)

2. Char Kway Teow
(Flat rice noodle stir-fried )
3. Sam Tam
(Spicy papaya salad)

3. Wanton Mee
(Dumplings with thin egg noodles)
4. Tom Yam Gai / Goong
(Traditional spicy chicken or prawn soup)

4. Chilli Crab
(A signature dish)
5. Kay Keaw Wan Gai
(Green chicken curry) — A signature dish

6. Pad Thai
(Fried noodles) — A signature dish

5. Sambal Stingray

6. Fried Hokkien Mee
(Egg noodles & rice vermicelli in a rich seafood stock)

7. Oyster Omellette

8. BBQ Chicken Wings

9. Chicken & Beef Satay with Peanut Sauce

INDONESIAN MALAYSIAN
1. Gado Gado
(Assorted boiled vegetables with fresh peanut sauce)

2. Nasi Goreng
(Fried rice with fried egg & satay)
— A signature dish

3. Sayur Lodeh
(Vegetable soup with coconut milk based broth)

4. Semur Daging
(A type of stew of beef braised in sweet soy sauce)

5. Chicken Rendang
(Spicy caramelised chicken, braised in coconut milk, chillies & spices)
— A signature dish

1. Nasi Lemak
(Rice cooked in coconut milk served with spicy sauce, fried anchovies, fried peanuts, boiled egg & cucumber slices) — A signature dish

2. Otah Otah
(Minced fish with coconut milk, chilli paste & spices wrapped in banana leaf)
3. Penang Char Kway Teow

4. Laksa / Curry Mee / Prawn Mee
(Spicy egg noodles in special spicy sauce)
5. Sotong Goreng
(Fried squids)
6. Chicken Curry

7. Sambal Udang
(Spicy prawns)
8. Dum Chicken Briyani
(Marinated chicken with Basmati rice)
— A signature dish

Page 128
PRODUCT

TIMESCALES

YEAR 1 YEAR 2 YEAR 3
(ii) THE RESTAURANT

• The theme will be ‘tropical Asia’ with typical tropical plants
to capture a jungle setting.
• Bamboo will be featured throughout

? ? ?

• Furniture will be cane and rattan to build atmosphere and ? ? ?
provide comfort
• Artifacts from the 4 countries will be displayed in the
restaurant design

• Background music will feature the sounds of the tropical jungle periodically

• In total, the seating capacity of 120 seats will be set
across 25 tables over two floors

• Table settings will feature linen and cutlery, crockery & glassware, from the South East Asia countries

? ? ?

• ‘Free’ chilled bottled water will be available to all tables ? ? ?

PRICING STRATEGY
The menu architecture is designed to include the derived demand for rice as the main carbohydrate eaten with the main dishes.

Complementary demand for selected dishes has also been factored into the menu pricing formula.

The approach taken to pricing is full absorption costing as a base and to test this against competitor price levels in order to make adjustments.

Live seafood dishes are premium priced although chicken based dishes are below market rates.

This flexibility allows customer to drive according to these budget.

All take-away dishes at 15% less than the restaurant menu price. Premium loyalty cards offer 10% off meals for up to 4 people.
Marginal cost pricing has been used for the business set lunch menu.

The average revenue per head across lunch & dinner is £34, where £8 is for beverage consumption.

This average is achieved from volume estimates.

£
Lunch time average per head 20
Dinner average per head 34
Average food 26
Average beverage 8
Consumptions tracking will be undertaken to achieve ‘actuals’ against these estimates and adjustments will be made to meet bottom line business objectives.

The Dish Price floor on the menu is £4 and the Price Ceiling is £26.

‘Seasonal’ charges will apply to lobster and crabs.

The overall aim of the Pricing and the Menu is to make this affordable to call target groups of customers.

PROMOTION AND PLACE
The restaurant location is at Westbourne Grove Bayswater London W2.

This is ‘the place’ for the restaurant to which customers must be attracted and to reach conveniently. Promotion has two roles : –
1. To promote the Papaya Restaurant Cuisine
2. To promote the location
The Launch Message is simple :

“ PAPAYA is Now Open in Bayswater ” — Authentic Multi Asian Cuisine

The follow-through Message :

The Papaya Restaurant
Authentic Multi-Asian Cuisine in Bayswater

The ‘In-Restaurant’ Message is also simple : –

Welcome to Papaya experience…dine and enjoy…you are our VIP guests

MEDIA PROMOTION (Above The Line)

None !

It is not considered effective to raise awareness through conventional media ie. press, radio, TV, posters, moreover it is considered too costly for a small business.

Social Media

Yes !

Full use will be made, especially Facebook to achieve cost-effective reach of a proportion of the target market.
PROMOTION (Below The Line)
This is considered important for the launch campaign. The plan is to open the restaurant to potential customers for 2 weeks ‘free’ to allow our potential customers to sample the food — no alcoholic beverage will be served.

This will stimulate awareness and trial for the restaurant as a ‘soft launch’. It will serve to test operational
processes as well.

Thereafter the official opening will be staged for paying customers, followed by a loyalty scheme introduced within 3 months.

PUBLIC RELATIONS

Public relations is considered to be important to create awareness and informed opinion about the Papaya
Restaurant.

A local PR agency has been appointed to prepare an PR campaign for the launch and follow-through 3 month period.

PR is considered to be more effective than Media advertising and this will be supported with social media
marketing.

The role of the Restaurant Manager in building relationships with the concierge staff at hotels within the catchment area of the restaurant will be actioned.

4.5.3 INTERACTIVE MARKETING

This part of the marketing strategy must be integrated with the internal and external marketing to provide the linkages by which meaningful connections are made with customer in order to build customer loyalty ie. to get more customers and more customers returning to the restaurant.

The focus of all marketing effort should be hence to create a meaningful, relevant, valued, customer experience that will be remembered and talked about.

This is the best way to create market space for the Papaya Restaurant.

The restaurant is a ‘no rush’ experience, therefore the pace of service from meeting & greeting to departure should reflect this — as a meaningful experience.

Attention to customers and attentiveness is extremely important to ensure responsiveness to customer explicit
and implicit expectations.

The physical evidence in the restaurant will provide an ambience and environment of comfort for a ‘dining occasion’. This must be supported with professional customer service achieved through customer training.

The ‘people’ at Papaya must become Papaya People, all part of the identity who introduce the values of the
restaurant and deliver these to each customer.

Recruitment & Selection of waiting staff to fit into the Papaya culture is of paramount importance.

Customer service processes must be seamless. This will be practised and perfected during the soft operating period.

The root to a successful future is the total customer experience.

This is the critical factor for restaurant success for all market segments review.

The customer first value must be because a belief system throughout the organisation from day 1 !!!

4.6 RISK ASSESSMENT
The risk of the marketing plan relates to all customer touch points. Awareness of this is critical and staff training is essential to ensure consistency throughout the customer experience.

Risk of upsetting customers can arise along the following McKinsey style value chain.

This indicates most of the touch points which require service ‘ The Papaya Way’ with the courtesy and hospitality of South East Asia.

This will be reinforced by traditional clothing from the countries of origin for the cuisine. Risk can be redirect and avoided by attention to detail and training, training, training.

4.7 CROSS FUNCTIONAL DEPENDENCY

The ‘front end’ of the restaurant must be supported by the ‘back end’ operations.

This means the mutual interdependency between dining operations and restaurant operations is critical for the restaurant to be successful.

The marketing plan therefore must relate and integrate with the restaurant operations plan, all coordinated and orchestrated by the Restaurant Manager.

4.8 THE MARKETING BUDGET

The marketing budget is modest for the announcement and opening of the restaurant together with a follow
through period of 3 months initially.

An amount of £20,000 has been set aside, although contingency funds have been made available if deemed appropriate.

The core component of the marketing strategy is Customer Relationship Management.

5. THE DEVELOPMENT PLAN
The project is planned over the next 6 months, to be overseen by the Restaurant Manager who will be a joint signatory on all contracts and payments together with Adrian Mason.

Lease Signed Sourcing Restaurant Design Architecture PR Evaluation Equipment Supplies Contractors
IT System
Chefs on board Licenses & Apparels
Appointment of Accountants & Lawyers

MONTHS
Design Development Testing On-Stream 1 2 3 4 5 6

STAFFING
Kitchen Waiters

SUPPLIES
Beverages Fresh Produce Meats Seafood
Spices & Ingredients

SOFT OPENING

MONTHS
Design Development Testing On-Stream
1 2 3 4 5 6
MARKETING COMMUNICATIONS

FULL OPENING

COST DRAW DOWN % CAPITAL INVESTMENT £400K

25% 25% 50%

6. THE MANAGEMENT TEAM
THE START-UP ORGANISATION CHART
THE RESTAURANT MANAGER
Michael Yoke
ANAGER
oh

THE KITCHEN THE RESTAURANT
4 CHEFS

3 KITCHEN ASSISTANTS

BAR STAFF

1 Full Time
1 Part Time

WAITING STAFF

2 Full Time
6 Part Time

7. OPERATIONS PLAN
The Restaurant Manager is responsible for total restaurant operations from inbound logistics to restaurant operations, customer service and sales.

It is important to ensure that all these operational business touch points which collectively add value to the business, as well as the customer experience, are adequately resourced.

The following areas must be attended to : –
ACTION PLAN
1. RESTAURANT SUPPLIES

Seafood, halal meat, and vegetables are multiple sourced to avoid dependency upon single produce suppliers. The Beverage supplier will be tied into a volume based contract reviewed at 6 months intervals. Contingency situations can be overcome though purchasing from local produce markets and wholesalers.
2. RESTAURANT
OPERATIONS

Training in end-to-end operations processes to build efficiencies is essential. Weekly reviews on the adequacy of processes will be needed in the early stages. The use of the IT system will be essential for the smooth running of the business.

3. CUSTOMER SERVICE

Training for ALL customer touch points is essential and then monitoring staff performance will be on-gong from the part of restaurant entry to the time of leaving the restaurant premises.

ACTION PLAN

4. BUSINESS
LOGISTICS

A plan will be drawn up for weekly business logistics management.

5. PAYMENT SYSTEMS

The adequacy of IT based systems for credit card payments must be monitored. Till management of cash transactions must be monitored with rigour.

6. STAFF OPERATIONS

Rosters will be used for all staff to ensure adequate cover for the restaurant dining areas and the kitchen.
The need for attention to detail is essential.

8. BUSINESS SUSTAINABILITY

8.1 CRITICAL SUCCESS FACTORS

For the Papaya Restaurant to be sustainable as a business, the following CRITICAL FACTORS FOR
SUCCESS will apply : –
• Operations Management
• Team Work
• Supply Chain Management
• Staff Morale & Motivation
• Staff Reward
• Food Quality & Consistent
• Cleanliness & Hygiene
• Health & Safety
• Regulatory Compliance
• Total Restaurant Management

• Market Visibility
• Market Penetration
• Restaurant Awareness
• Marketing Communications
• Local Competitiveness
• Buoyant Market Conditions
• Situational Factors to Local Environment
• Low Level Economic Turbulence

• Segmentation, Targeting, Positioning
• Propensity to attract Customers
• Customer Engagement
• Customer Care
• Customer Service
• Turnaround Time
• Relevance of the Restaurant Concept & Cuisines
• Customer Acquisition & Retention
• Customer Loyalty

8.2 RISK ASSESSMENT

8.2.1. OPERATIONAL RISK

• Loss of Chefs

PROBABILITY MITIGATION
Low Medium High

? Chefs are shareholders, will be monitored, accommodation is provided at the restaurant
business. Ensure Chefs are capable of preparing al cuisines.

• Poor Take Up Following The Launch

? Providing an Excellent Customer Experience. Responding to customer feedback on all restaurant touch points.

• Kitchen Staff Attrition ? Pay above market rates with performance bonus.

• Waiting Staff Attrition ? Pay above market rates with performance bonus and tips, paid weekly to retain part time staff. Have a part time ‘pool’ of staff.

• Supply Inconsistency ? Multiple sourcing for suppliers.

8.2.2. FINANCIAL RISK

CAPITAL RISK

The capital injection for the start-up is £450,000, which should be repaid within 3 years.

The downside risk in the event of restaurant failure may be linked to the restaurant renovation costs of
£245,000 as the lease premium of £155,000 may be sold on to a new buyer.

This capital risk would only arise if the market assessment and related market demand has been misread, but
this is considered unlikely to occur.

Awareness of this shared financial risk will stimulate the team to work hard to recover this investment.

8.3 PERFORMANCE MANAGEMENT
As a small business, at least for the first year, performance will be based upon sales revenue generation and profit volumes generated beyond breakeven.

The PV Ratio will be used for lunch time and dinner time shifts so that a margin of safety is known beyond breakeven.

This calculation will then become a weekly benchmark against which performance can be assessed, week on week.

In time, when the restaurant breakeven has been achieved and positive cashflow position attained then a system
of reward for performance will be introduced. It is anticipated that by month 9 this will be possible.

Restaurant Profit will then be shared based upon a points system distributed between all staff as an equitable basis.

In this way, everyone will benefit, staff are incentived, good moral is maintained and happy staff will create
happy customers !

9. IMPLEMENTATION SCHEDULE
With reference to the Development Plan in Section 5, the following outline will indicate the Schedule for
Implementation.

Pre Opening

MONTHS
Opening Post Opening

1 2 3 4 5 6

7 8 9 10 11 12

Operations from the Development Plan

Staffing

Pilot ‘Soft Opening’

Fully On Stream

The Marketing Campaign

Staff Training

Monitoring & Control

Quarterly Reviews

Customer Feedback

10. FINANCIAL PROJECTIONS
CASH FLOW FORECASTS YEARS 1 TO 3

Cash In Flow From Sales *
Cash Out Flow

Start Up Year 1
( £ 000’s )

Year 2 Year 3

Raw Material Costs for Food & Beverage

Operating Costs **

Operating Cash Flow

Capital Expenditure
Lease, Renovation and Fully

( £ )

Equip the Restaurant ( 400 )
Reserve Held ( 50 )
Capital Repayment

* No bank loan facility drawn down
* See Cost Budget Section II Business Model
Page 151

PROFIT FORECAST YEARS 1 TO 3

( £ 000’s

)
Start Up Year 1
Year 2
Year 3
Total Sales
Lunch and Dinner 1250 1875 2500
Cost of Sales 415 615 800
Gross Profit 835 1260 1700
Operating Expenses 500 700 875
Depreciation 50 50 50
Profit before Tax 285 510 775

Profit To Sales Ratio 22.6% 27.2% 31%
Gross Profit % 66.8% 67.2% 68%

REFERENCES

• Barringer, B. & Ireland, R. (2010), Entrepreneurship – Successfully Launching New Ventures, Pearson

• Bessant, J. & Tiid, J. (2011), Innovation & Entrepreneurship, Wiley

• Davila T., Epstein M. & Shelton, R. (2013), Making Innovation Work, FT Press

• Friend, G. & Zehle, S. (2009), Guide to Business Planning, The Economist

• Gill, R. (2010), Theory and Practice of Leadership, Sage Publications

• Goffin, K. & Mitchell, R. (2010), Innovation Management, Palgrave Macmillan

• Osterwalder, A. & Pigneur, Y. (2010), Business Model Generation, Wiley

• Porter, M. (1985), Competitive Advantage : Creating and Sustaining Superior Performance, Harvard Business School Press

• Porter, M. (1996), What is Strategy ?, Harvard Business Review, November – December, The Value Chain 61 -78.

BIBLIOGRAPHY
• Bradberry, J. (2011), Start Up Success, Amazon.com

• Clark, T. (2012), Business Model You, Wiley Publications

• Crane, F. G. (2010), Entrepreneurship – An Innovators Guide to Start Ups and Corporate Ventures, Sage Publications

• Crane, F. G. (2012), Marketing for Entrepreneurs – Concepts and Applications for New Ventures,
Sage Publications

• Ginsberg, A. (2013), Strategies New Venture Development Book, Snazel Books

• Good, W. S. (1989), Readings in New Venture Development, McGraw-Hill

• Pinson, L. & Jinnett, H. J.(1989), Anatomy of A Business Plan, Nolo

• Pinson, L. & Jinnett, H. J. (2003), Small Business Start Up, Kaplan Publishing

PART 8
ASSESSMENT
ASSESSMENT EXPECTATIONS
From the business development scenario you have selected, you will have outlined your role. You will be expected to submit this assignment in your role as an entrepreneur for a new business start-up.

The Business Development Role Brief has given a clear set of expectations for the task ahead.
GENERAL CRITERIA FOR ASSESSMENT

You will be formally assessed using the following criteria :

1. The achievement of the Case Study Brief in Report Format
2. Statement of Clear Terms of Reference
3. Use of Core Modules
4. Quality of your Business Plan Proposals
5. Use of Key Concepts
6. Use of Models
7. Supporting Evidence and Relevant Research
Page 291

HOW YOU WILL BE ASSESSED
The following are samples of assessment forms which may be applied for both the New Business Start Up Scenario

SCENARIO ? NEW BUSINESS START-UP Mark Allocation
1. Executive Summary & Introduction
Is the title properly-worded ? Is the Executive Summary clearly written ? Is the Introduction chapter well-organised ? Has there been a clear identification of the business opportunity(ies) and assumptions ? Has the student brought forward suitable evidence for the business proposal and critically identified the relevant models with suitable evidence/sources of information to demonstrate the rationale behind the business idea(s) ?
15
2. The Business Opportunity
Is the business opportunity(ies) described clearly ?
10
3. The Feasibility Study
Is the feasibility study conducted in accordance with the assignment expectations ? Has the research process to gather essential information been implemented ? Have the relevant research methodologies been identified, justified and applied ?
20

Mark Allocation
4. The Business Model
Has a review of relevant previous research and publications/sources of evidence been undertaken ? Have the appropriate conceptual frameworks & academic models relevant to the potential business model canvas been identified, analysed, synthesised and critically evaluated ?
25

5. Evaluation of Business Development Plan
Is the plan well-structured ? Is a detailed plan of relevant action for implementation outlined ? What are the critical success/failure factors ? Alternately, if the BDP is not viable in its original form, what conditions would make it (or a variant) viable ? Is the viability of the BDP clearly discussed ?
20

6. Overall Presentation
Good clear writing, adequate appendices, bibliography and reference list of appropriate evidence of reference and overall presentation.

TOTAL
100

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