This assignment is part 2 of a big assignment. I have previous part, and you need to analyze it and write operations plan and finances. And your work should be 5-6 pages. The following sections are what you need to write.
· Space And Equipment
· Floor Plan
· Methods And Procedures
· Owner(s)’ Investment
· Borrowed Money
· Sales Income By Month
· Sources Of Data
· Business Plan Sheets
And you can find the previous part from the second page.
Part 1: The Business Model
The choice of a business model for this plan is ‘ghost kitchen’, which is a restaurant business that offers delivery and pick up service only. The idea of ghost kitchens is a rising trend in the restaurant industry, as delivery has grown due to the rapid growth and demand by the consumers of the restaurant delivery meals after the outbreak of COVID-19. According to Farazad (2021), within a decade, this new business model would be worth more than $1 trillion. The business will be established to offer non-competing delivery only concepts directly to the consumers’ house.
· The main aim is to manage resources wisely and to provide special meals for customers at affordable prices because the main target of this business will be university students.
· It has only a space for the kitchen for professional cooking and facilitates.
· Since a ghost kitchen does not require wait staff and dining spaces, setup cost and timing will be less than other restaurant concepts.
· With the concept of ghost kitchen, the business can have more opportunities by aiming at different customers, as menus can be easily changed in ghost kitchen.
· The business can attempt different menu strategies, depending on seasons and customers’ demands.
Products And services
This business with a concept of a ghost kitchen will aim to provide food online and sell food conveniently without having any space for the dining area. Defining products can help a business determine where it should invest the finance and by-product quality you will gain several customers. Focusing on products and services will make a business a profitable amount in the future and increased sales, and the best way to achieve a high-profit margin is to be sure that a business is charging enough amount for the product, which helps a business to not go in loss. The customers will make orders through online platforms or phone numbers, and they will have them delivered to their doorstep. The delivery will be free for students, and a small fee will be charged for other customers.
· The kitchen will provide spicy chicken gyros, salmon grilled cheese, barbeque chicken tenders, and burgers for its first few years of operations.
· The kitchen will offer several desserts like flavoured whipped cream toppings. These include chocolate, cinnamon almond, raspberry, and strawberry.
The customers are the most important factor of a business. No matter what products and services a business offers, there will be no sales if there are no customers. Hence, it is important that a business offers quality and time to the customers and does not make them disappoint in any matter of food and services.
The target customers for this business will be students, especially at the University of Victoria. The business also aims at reaching more customers, including families that make orders to have tasty foods for family dinners.
People’s tastes constantly change, especially students who want to have the best tasting foods at affordable prices. The major opportunity at the University of Victoria that the business should aim for is that it should provide affordable food to students to save them from expensive shopping and unaffordable menus. Therefore, this business will provide high-quality food for the students at affordable costs around the clock. The other restaurants around the University offer food at specific times of the day, making it difficult for them to eat at certain times. Therefore, this business wants to reach each student by having better pricing, quality food, diverse varieties to choose from, and available around the clock. Although the business will not be an open one, it will strive to receive and fulfill all the customers’ orders.
The owner of the business will be an individual who has been in the restaurant industry for 25 years, and the owner has been a general manager at restaurants for 7 years. With the owner’s experience in operating restaurants, the owner wants to open a restaurant business by himself. However, since the owner has a weakness in marketing and advertising, the business will need a marketing and advertising expert to promote the business.
The Legal Organization
The business will have a general partnership that assumes that all the parties have equal rights and responsibilities. Every partner is to provide services in the area they are best suited as per their training. Employees who will work under the management of the two partners will carry out the rest of the activities. The main reason for the partnership was to ensure that they gathered enough funds for the new location.
Part 2: Feasibility Analysis
The business will be located in Victoria, BC, Canada. The metro Victoria’s size is 696.15 km2, and the city of Victoria is 19.47 km2 (World Population Review, n.d.). The population of Victoria, BC is estimated to be around 390,000 (World Population Review, n.d.). And the city’s growth rate is 1.44% yearly (Townfolio, n.d.). Besides, the age group that has the biggest population of Victoria, BC is between 25 to 29 years old (Townfolio, n.d.). The demographic of Canada is known for its diversity, but the demographic of Victoria has a more British presence while still having many different nationalities, including German, Chinese, and Punjabi (World Population Review, n.d.). The student population in Victoria has also been high, with the largest university in Victoria, the University of Victoria (World Population Review, n.d.).
The ghost kitchen will be situated at 3750 Shelbourne St, Victoria, BC. This is a place where the students can easily access themselves and have their food delivered within the shortest time possible.
According to FuturPreneur (2018), it was stated that “for an average-sized 1,200 square feet restaurant, you can expect the cost of the security deposit and rental for the first six months to be approximately CAD$75,000” (para.6). Since the business will be a ghost kitchen that does not require dining areas, we can estimate that it would cost lower than $75,000. Thus, the site and the kitchen space are estimated to cost $68,000. To open up a restaurant in a highly demanded area, the cost can be required up to 1.2$ million (Rowe, 2020), but a ghost kitchen business model can allow the owner to start with minimal cost. The expenses will sooner get the return back if the business runs successfully in the industry of restaurant and the profits will be increased if your finance is well performed according to the discussed factors for the business.
The total size of the target market will be similar to the population of students at the University of Victoria. As of 2015, the university had a student population of 21,593 (The University of Victoria, n.d.). Therefore, these will the numbers targeted for the new products. However, there are limited barriers to entry as a ghost kitchen; any other proprietor can get into the market for as long as they comply with the set business permits and have the necessary equipment.
The market will be competitive because there are already more than 20 restaurants around the university. Besides, there are competitors in the area that are offering similar foods. Restaurants such as Johnny Rockets and Original Joe’s Restaurant & Bar have been operating in the area long enough. These restaurants provide a variety of ready-to-eat foods produced to meet the specific needs of the students. These competitors are also familiar with the students’ culture in the area.
The business projects that it will be able to break even in the first year of its operations with increased demand for delivery. Therefore, the sales forecast for one year is shown in table 1.
Table 1: Sales Forecasts for Year 1 of Operation
Protecting The Business
During the development of the strategic goals for the business, proper and careful planning was incorporated. Therefore, a negative deviation of 7% will be expected from the sales projections. However, when the sales are less than 93% of the projections, more actions will be taken to prevent further losses. Some of the actions include increasing promotions when the sales are below 93% in the first year. These will be mostly on the weekends when the students are free and can engage in peak time orders. The second action will apply for the inacceptable sales after six months. The business will find a brand ambassador within the school to make the students aware of the range of products available. In case the business faces some problems with liquidity, a thorough examination of the accounts receivable will be done, and the cash flows to determine the unforeseen cash layouts.
Part 3: Marketing
The business aims to have a business image of trustworthy quality of food with affordable prices that students can satisfy. Therefore, the business will be known for its delicious recipes that leave the customer demanding more. The business is also known to have friendly employees with orders delivered within the specified timelines.
In the process of marketing for the start-up of a business, firstly, it has to create an image to influence people and observe their opinion about a brand. As I have chosen a ghost kitchen restaurant business, it has the importance of business name which can be recommended by the owner who owns the company and has the legal and official documentation on the behalf of his name. The name of the business should reflect its products and mission of the business; it should express its quality-ensured food and affordable price that easily cater students.
Service/ Product Mix
The business will have two product mixes, which are foods and desserts. The foods include Burgers, Chicken delicacies, and Salmon delicacies. For desserts, the business will offer whipped cream desserts, with the major ones being strawberry, raspberry, and chocolate.
Customers are important for the brand and if the customers are capable to buy the product from your restaurant, then the customer’s need will alternatively change in demand of customers. The business is trying to enter into a new market. Therefore, two pricing strategies will be used. First, the business will use penetrative pricing. This will be to attract more customers and establish a client base. The second method is competitive pricing, where the main aim is to provide affordable prices for the students (De Toni et al., 2017). Therefore, the prices will remain lower than the other competing restaurants to ensure the clients understand the importance of value for their money.
The business will adopt two distribution strategies. For the food that must be prepared and distributed directly to the clients, the distribution will be exclusive to the riders identified by the business. Therefore, there will be no other outlets apart from the business that will be allowed to distribute the foods. The second distribution strategy is selective distribution (Janjevic & Winkenbach, 2020). This will be used for the distribution of the desserts. After production, they can be distributed to specific groceries for sale. The business has identified four groceries around the university that will be involved in the distribution. Before mass production begins, the business distributes intensively to as many outlets as possible in Victoria.
The ghost kitchen’s aim of promotion in the market is to increase awareness, develop interest among people, generate sales, and brand reliability. The observation about four types of promotion advertising, sales promotion, personal selling, and publicity are important to include in our business plan to seek development. The business will be located around the university. Therefore, the main promotional method will be the use of social media. By using different social media accounts, it will be possible to advertise and reach out to many students (Chen & Li, 2020). The business will use Facebook and Instagram to aggressively market the products. The second strategy that will be used is the use of ambassadors. These are students who will be identified to spread how tasty and delicious our food and desserts are to attract more students.
One of the strategies that will be used to evaluate a promotion is the use of sales volumes. The estimation of the volume before the promotion to the sales volume after will determine the impact of the approaches. In this case, the business will use the expected or forecasted sales in the absence of causal influences and determine the changes registered. The only method to determine about the promotion is effective by measuring the four metrics like profits, sales, customer satisfaction, and goal achievement.
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