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Sole Proprietorship Restaurant Business Plan

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Executive Summary

AMY’S restaurant is a sole proprietorship restaurant located at the heart of Atlanta, near Peachtree Center Mall. The restaurant location selection is attributed to the high number of people operating within the site, museum, and the surrounding university such as Georgia State University. Located in this thriving area, the strategic restaurant position will attract customers through its furnishings, which will comprise brick walls, cosy leather seats including a comfortable outside patio for customers wishing to spend quiet time viewing Atlanta’s beauty. The restaurant will also offer a breath of fresh atmosphere and relief regardless of the position a customer will be sitting. AMY’s will be a sole proprietorship business whereby the owner has skills and experience in catering and restaurant experience. AMY’s restaurant will occupy a 100 by 100 square foot building. The kitchen will be equipped with the latest refrigerators, walk-in freezers, commercial stove, dishwasher, and other startup expenses such as food inventory, furniture, and marketing.

Sole Proprietorship Restaurant Business Plan

The restaurant will concentrate on serving the locals, tourists and campus students around its surrounding locale. The restaurant will provide different types of cuisines and drinks, for instance, variety of sandwiches (hot and cold), soup, salad, pasta, pastries (croissant, cheesecake), chips, hot plate (quiches), fruits, coffee, latte, and hot chocolate, hot teas. The menu will also include some kids’ menu, such as grilled cheese, peanut butter, and cheese sandwiches. AMY’s restaurant will be a sole proprietorship owned by Amy Davis.

AMY's Financial forecast for 5 years

Objectives

AMY’s Objectives will include:

  • To draw regular clients both offline and online
  • To have outstanding customer support that will contribute to improved customer retention and customer loyalty
  • Per year to improve revenue
  • Offering quality meals at reasonable rates

Mission Statement 

The restaurant mission statement of AMY would give a straightforward vision of what AMY Restaurant stands for to our clients. The goal statement would provide consumers beyond the home with a distinct and calming food experience. AMY’s vision statement frequently offers assurance offerings that can leave consumers amazed and enthralled with the services, because they continue to come again. Using better food products, this can be done and competitive rates can be given to supply the food.

 Vision Statement 

Darbi (2012) asserts that a company’s vision statement provides knowledge about its future business plans. AMY’s restaurant will offer its customers exemplary services; hence, meeting the client’s demands beyond their anticipations. Therefore, the restaurant will provide its varied cuisine and drinks at affordable prices accompanied by the quality and exemplary services. Thus, AMY’s vision statement focuses on becoming an inspirational centre for the residents and visitors by offering impressive and superior services with various cuisines and drinks designed to satisfy our clients’ taste.

Guiding Principles

David, F., and David, R. (2016) assert that values should guide business in developing an excellence culture where each employee will endeavour towards ascertaining that clients receive quality services, which outdo their anticipations. The organizational values play an indispensable role in ensuring that the staff and customers are gratified and contented with our services and cuisines culminating in increased sales and staff retention. AMY’s philosophy will be to abide by the quality standards, enhance customer satisfaction, and promote a friendly environment in which clients can enjoy and relax as they take their meals. The core values will include integrity, collaboration, services, professionalism, and quality. 

Key to Success

AMY’s key to success will include:

  • Amy will provide excellent customer services and a food menu that will build and maintain customer retention and loyalty.
  • The business location also provides a competitive advantage due to the high flow of people
  • AMY’s will work with qualified personnel with experience in the restaurant and catering sector
  • AMY will be committed to continuous quality food and services and well as constant improvement

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Company Description

AMY’s will be located at Peachtree Center Mall, Atlanta in a 100 by 100 square feet space. AMY’S restaurant is a sole proprietorship restaurant situated in Atlanta’s heart, near Peachtree Center Mall. The restaurant location selection is attributed to the high number of people operating within the site, museum, and the surrounding university such as Georgia State University. Located in this thriving area, the strategic restaurant position will attract customers through its furnishings, which will comprise brick walls, cosy leather seats including a comfortable outside patio for customers wishing to spend quiet time viewing Atlanta’s beauty. Regardless of the place a client will be seated in, the restaurant will still deliver a breath of fresh atmosphere and relaxation. The restaurant would focus on supplying its nearby locale to the locals, visitors and campus students. Different forms of food and beverages are available at the store, such as a range of sandwiches (hot and cold), chilli, lettuce, pasta, pastries (croissant, cheesecake), popcorn, quiches, candy, coffee, latte, hot cocoa, and hot teas. Few children’s meals may also be on the programme, such as fried cheese, peanut butter, and cheese sandwiches. The restaurant will be privately owned by Amy Davis and serve various cuisines and drinks, including the kid’s menu. 

Motivation

I have always had an aspiration of opening my own business as well as becoming boss. Also, the idea of starting a business and managing a team has been my driving force towards attaining my goals. I enjoy catering and interacting with both the employees and customers. Without a doubt, a restaurant is a unique place that brings different people from different lifestyles, thereby providing me with an excellent chance for not only associating with them but also serving and providing satisfactory and exemplary services. Opening AMY” s is a dream come true since I am not only a people’s person but also do not mind working for long hours. As the restaurant owner, I represent my restaurant 24/7 and thus needed to have experience and skills in catering and leadership. 

Start-up Funding 

After spending months conducting market feasibility and search, it was decided that the restaurant would lease commercial space at Peachtree Center Mall, Atlanta, which has a high population. The start-up capital will be utilized in various ways such as legal expenses, equipment, furniture, rents, employee’s salary, insurance, inventory, and cash at hand. Thus, it is estimated that the restaurant will require a start-up capital of $0.5M the owner will contribute $300,000 (60% of the total money) and the rest of the funding will be sourced from the bank. 

Table 2: AMY’s Summary of the Start-up Funding

Start-up funding  
Expenses $ 199,100.00
Assets to fund  $ 300,900.00
Total funding needed $500,000.00
 
Assets
Non-cash assets $250,000.00
Cash required from start up $30,000.00
Extra cash raised $0.00
Cash balance $20,900.00
Total assets $300,900.00
 
Liabilities
Current borrowing $0
Long-term loan $200,000
Total liabilities $200,000.00
 
Planned Investment
Owner $300,000.00
Loan $200,000.00
Total Funding $500,000.00

AMY's Start-up Funding

  • Start-up Summary

The rent will be leased in January 2020. Additionally, the kitchen inventory will include tools such as aprons, pizza pans, tableware, mixers, trays, gloves, storage containers, and cooking items such as cutting guide and cooking utensils. Kitchen equipment will include digital mixers, freezers, more relaxed package and refrigerators, among others.

Table 3: AMY’s Start-up Summary

Startup Summary
Year 2020
Fixed Asset
Installation of essential equipment  $   123,900.00
Kitchen  $   100,000.00
Tables/Chairs  $     30,000.00
Signage  $       7,000.00
Music/ security camera  $     10,000.00
Small ware  $     20,000.00
Web Development  $       3,000.00
Opening market (social media, PR)  $       7,000.00
Total Asset  $ 300,900.00
 
Fixed Expenses
Building Rent  $     10,000.00
Salaries $   108,600.00
Licenses  $     12,000.00
Small ware  $     20,000.00
Pre-opening Hiring and training  $       3,500.00
Fixed Expenses  $ 154,100.00
 
Operating Expense
Administrative Expenses
Office Supplies  $       1,000.00
legal fees  $         500.00
Variable Expenses
Inventory  $       5,500.00
Supplies  $       1,000.00
Utilities  $     30,000.00
Insurance  $       7,000.00
Operating Expenses  $   45,000.00
 
Overall Start-up  $ 500,000.00

Table 4: Graph illustrating AMY’S Start-up Summary

AMY'S Start-up Summary

Company Ownership

AMY’s will be privately owned sole proprietorship restaurant owned by Amy Davis.

Products 

The restaurant would focus on feeding the people, visitors and campus students surrounding it. For eg, a range of sandwiches (hot and cold), chilli, lettuce, spaghetti, pastries (croissant, cheesecake), chips, hot plates (quiches), bananas, coffee, latte, and hot cocoa, hot teas. The restaurant can have numerous cuisines and beverages. Few children’s meals may also be on the programme, such as fried cheese, peanut butter, and cheese sandwiches.

Business Location

AMY’s will occupy a 100 by 100 Square feet building located at Peachtree Center Mall, Atlanta, Georgia. The Restaurant will have about 15 car parking slots daily. The mall is an assembly point for Atlanta locals and a commercial area for the locals and tourists. As a result, situating AMY’s in this area will expose the Restaurant to a wide range of clients. Accordingly, AMY’s location will meet the need for clients’ profile range from children to elder people seeking a nice and cosy place to relax as they enjoy their meals. 

AMY’s Market/Customers 

AMY’s target market will encompass the locals and the tourists touring Atlanta attraction sites such as the museum. This will include the middle-income people working within the Peachtree Center Mall, campus students, business owner and workers within the area, and other regulars on their way home. It is worth noting that the Restaurant will also have online customers who prefer ordering their food online. 

AMY’s Restaurant’s strategic position will make it probable for clients to stop for light appetizing delicacies, drinks, and foods as they go home. Subsequently, the Restaurant’s location makes it an ideal place for the locals and tourists to stop on their way. Indeed, guests searching for a place to chill out will find AMY’s Restaurant the best place where they can serenely spend their time with family and friends while sharing a meal.

Business Model

AMY’s Restaurant will be a typical restaurant where the clients will order while on their tables and the food taken to their tables. The main products will include a variety of sandwiches (hot and cold), soup, salad, pasta, pastries (croissant, cheesecake), chips, hot plate (quiches), fruits, coffee, latte, hot chocolate, hot teas. AMY’s will also provide kids’ menu, such as grilled cheese, peanut butter, and cheese sandwiches. AMY’s will also offer online services and take orders using the phone at the customer service desk. The online orders will be delivered at the customers indicated location. 

Competitors

AMY’s will compete with Aviva by Kameel, Chick-fil-A, Café Momo, Cheese Caked, and Willy’s Mexicana Grill. 

Market Analysis

The Peachtree Center Mall is a highly-populated area, thereby offering a conducive environment for the Restaurant to grow. The site comprises businesses and colleges, thereby depicting a high level of customer flow. With the progressing growth and renovation of the area, AMY’s will have an opportunity to increase its sales annually. Accordingly, with the increasing population growth, AMY’s will cater to clients based on age, for instance, single youths and children. More also, AMY’s will also target the family unit, which will encompass couples with young children. Income will also be a determining factor whereby the Restaurant will target all income earners.  

Market Segmentation

Market segmentation will include business owners and their employees, tourists, children, and students. It is widespread for children and youths to have their foods inside the shopping mall instead of homes. Thus, they tend to flock to a restaurant providing fast foods and ready to drink drinks. Accordingly, locals also prefer buying their foods by visiting the Restaurant or online, depending on their schedule. Thus, having online orders will help the Restaurant tap this type of market segment. Besides, tourists also like trying new food trend. As a result, the Restaurant will provide various foods, thereby increasing its chances of tapping into this type of market segment.

AMY's Market Segmentation

Target Market

AMY’s will focus on all classes of income earners ranging from low to high-income earners in the Peachtree Center Mall. Accordingly, the target market will be based on age ranging from children [due to kid’s menu], millennials, to baby boomers. To remain competitive, AMY’s will focus on striving to develop a reputable image and brand by providing service excellence, unique food, timely online delivery, and convenience. 

Market Needs

AMY’s will provide quality and exemplary services that meet the following various customers’ needs: 

  • Speed and timely online food delivery
  • Excellent customer service
  • Variety and flavour in a restaurant’s menu 
  • A fun place to be 
  • A restaurant that considers various culture in its menu

Market Trends

To deal with the latest online business trend, AMY’s will make sure that it opens a company website whereby clients can order their preferred food and the food delivered at their doorstep with a high level of efficiency. Accordingly, wellness and health-conscious era have made consumers more conscious of their health, culminating in reducing the consumption of fast foods. Thus, to ensure that the restaurant survives in the rapidly competing industry, AMY’s will offer drinks and food that meet customers’ varying needs.

SWOT Analysis

SWOT analysis aims at identifying the primary external and internal factors often seen as crucial to attaining a firm’s set goals and objectives. Internal factors are the strengths and weaknesses, which are internal to an enterprise. Also, external environment determinants are threats and opportunities signifying the environment external to a company. Thus, a strong association between an enterprise’ internal factors [opportunities and strengths] shows that a company is in good condition and can employ robust strategies to enhance its growth (Yu, & Zhang, 2010). On the other hand, threats and weaknesses show a possible warning and encourage using the shielding strategy to overcome a firm’s difficulties externally.

SWOT Analysis Factors: Strengths

Provision of quality food and services Proving quality services and food will help the business in attracting and luring more customers culminating to increased client loyalty as well as market share
Presence of well-trained staffs Staffs’ services to our clients will play an indispensable role in ascertaining that there is a good association between the employees and customers. A good relationship will succor in heightening the level of client retention, satisfaction, and loyalty.
Location Peachtree Center Mall is a good location for situating the restaurant since it has a high flow of people and serves a business center. With quality and unique dishes, the restaurant will be in a position to attract more customers leading to increased market share.
A clear vision of what the market wants AMY’s Restaurant will not only be focused on serving quality food but also healthy and safe food to its clients. It is apparent that in recent past customers has shifted their food preferences to more health-conscious food. Thus, as one of the restaurant’s strengths, AMY’s will serve food that meets customers need with respect to health and safety
Online selling The capacity to open an online ordering provides the restaurant will a competitive advantage of attracting and tapping a larger market segment.

 SWOT Analysis Factors: Weaknesses

Being new entry to the market Being a new business, the management will be needed to conduct a market analysis and recognize the missing gaps as well as opportunities which will help in attracting customers
Maintaining the image and brand To overcome this challenge, the restaurant will open its company website where it can advertise its distinct menu and services. 

 SWOT Analysis Factors: Opportunities

Competitor exiting the market A primary competitor closing will culminate to its clients searching a comfortable pub to go, and we will be that cozy place. Increasing the number of customers will increase the restaurant’s sales.
Expansion of the Global Market Place The growing population in Atlanta provides an opportunity for the business to growth leading to more expansion opportunities with the U.S states and international market. 

SWOT Analysis Factors: Threats

Existing competitors The restaurant will face stiff competition from nearing restaurants, however, to handle this challenge, the restaurant will provide unique services and menu that meet client’s needs leaving a long-lasting experience
The shift in customer’s food preference In recent years, customers have become more health conscious with most preferring to make their own food at home. To attract more customers to the eatery, the restaurant management will ensure that the food served to meet the customer’s needs and preferences.

Competitive Advantage

Amy’s competitive edge emanates from:

  • Provision of unique food and excellent services
  • Strategic location 
  • Offering food at reasonable prices
  • Excellent, convenient, and timely delivery of online orders

Marketing Strategy

The marketing strategy for AMY’s will focus on developing and creating a business identity, which clearly defines the market niche to benefit the customers. It is worth noting that the significant segment will include all income earners residing with Peachtree Center Mall, and thus their essential needs will include price, delivery, and service. Therefore, the restaurant will ensure that it provides services at an affordable price. AMY will also use social media such as Facebook for marketing its cuisine, leading to increased market share. Accordingly, the restaurant will develop its company website where it can also sell its products. 

Positioning Statement

In the course of attracting clients, AMY’s will aim to elevate customer awareness within Peachtree Center Mall through word of mouth and online marketing. Thus, the restaurant will strive to explain AMY’s cuisines. The restaurant will increase value through reasonable prices and provision of quality food and service.

Management Summary

Amy’s restaurant administration will utilise the available resources to ensure that they operate a profitable business that abides with the provided policies and regulations. The management philosophy will include teamwork, mutual respect, and a sense of responsibility. Also, workers in Amy’s restaurant will desire to become part of the team because it will provide a conducive operating environment that will bolster creativity, growth, and embrace diversity and performance.

Amy Davis will be the restaurant manager. Davis has seven years of practical knowledge in the food and beverage industry, working as a manager in a similar business based in Los Angeles, CA. Amy has also held a position as a shift manager in a restaurant based in Atlanta, Georgia, giving an upper hand in ensuring the new Amy’s Restaurant’s successful management. Starting as an assistance kitchen supervisor provided Amy with necessary experience need to run the business. Amy is a master degree holder in business management and a bachelor degree holder in hotel and restaurant administration.

Lisa will be the assistant manager and a cook in the restaurant, working closely with Amy Davis to promote its success. Lisa holds a degree in culinary art and cooking from Culinary Art school, Newbury College, Brookline Massachusetts. She is also a holder of a certificate in beverage management and baking from the same college. 

Thus, both Amy and Lisa can manage the business because they hold relevant experience and skills required for propelling the restaurant to greater heights. Besides, the two have attended numerous training programs focused on sharpening their management skills, such as total quality administration, theories of constraint, and the application of just-in-time strategy. 

Personnel 

The worker plan illustrates the restaurant needs to augment the business capacity to match Amy’s Restaurant’s positioning. The restaurant will have the following staffs working towards attaining the overall objective of the enterprise, which include

  • Manager
  • Cooks
  • Kitchen employees
  • Servers
  • Customer services and 
  • Cashiers

The multi-level skilled staffs will work as a team to foresee that Amy’s restaurant attains the business objective. Notably, working as a team will boost the restaurant’s critical successes, promoting the ability to achieve a competitive advantage by enhancing the provision of quality services. Human resource forms the basis and most valuable assets in any business where the company will focus on selecting highly qualified personnel, disciplined, and with a capacity to work as teams. Nonetheless, the restaurant will ensure that the employees receive the necessary training and rewards to build employee loyalty and high performance. In addition to salaries, the company will offer bonuses and other incentives to reward the workers’ performance. The foundation of Amy’s restaurant personnel plan is maximising productivity and reducing the labour burden that increases the operating expenses while retaining strong worker commitment to success. 

The restaurant human resource policy will promote workers’ ability to continually update the trending technologies to enhance process improvement, save time, and reduce cost. The approach will serve to attain lessening costs and lead times, thereby improving the quality of service associated with customer satisfaction.

The table below illustrates the personnel plan for the workers’ total payroll for the next 5-financial years.

Personnel plan FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Manager  $          20,000  $          21,000  $          22,050  $          23,153  $          24,310
Cook  $          18,500  $          19,425  $          20,396  $          21,416  $          22,487
Kitchen Staffs  $          15,100  $          15,855  $          16,648  $          17,480  $          18,354
Servers  $          30,000  $          31,500  $          33,075  $          34,729  $          36,465
Cashiers  $          25,000  $          26,250  $          27,563  $          28,941  $          30,388
Total people 9 9 9 9 9
Total Payroll  $        108,600  $        114,030  $        119,732  $        125,718  $        132,004

Financial Plan

Based on the conservative estimates, Amy’s Restaurant expects to retain a healthy financial situation over the next five financial years. The plan provides the restaurant’s economic construct, which includes initial funding amounting to USD 500,000. The amount will be used to cater for the initial expenses and the procurement of the needed assets and the restaurant’s inventory. This includes owner capital amounting to USD 300,000 and the long-term bank loan amounting to USD 200,000 that will be repaid by the company cash flow generated from operations. After five years of operation, AMY’s Restaurant will seek further expansion to include opening new restaurants in different cities within Atlanta with a projected increase into other states over the years.

Break-Even Evaluation

The break-even analysis will include a fixed cost amounting to $ 22,500 and a variable price of USD 5 per unit of the products produced. The fixed fee will account for payroll, rents utilities, insurance, among other fixed costs. In this case, the restaurant will require to sell 1500 units of the products and an average price of USD 20 culminating in a total of USD 30,000 for a break-even monthly as described in the table below.

Break-even Summary
Fixed cost $22,500
Variable cost (per unit) $5.00
Sales Prices (Average per unit) $20
 
Break even (Units) 1500
Break even (Amount) $30,000

Amy's Break Even Point

Inference

From the chart above, AMY’s break-even point will be attained after the sale of 1500 units. This is depicted by the intersection between total revenues and total costs, implying that the entire cost and total revenue equals zero.

Projected Profit and Loss

Based on the restaurant operations, it is expected that AMY’s Restaurant will become profitable from the initial year of operation. Besides, the proceed will grow over the years for the next four years following an establishment and growth of the restaurant’s customer base. The table below reveals the proforma profit and loss for the next five years of AMY’s Restaurant operation with the initial year being FY 2020.

Pro Forma Profit and Loss for AMY’s Restaurant
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Sales  $        655,154  $        753,427  $        828,770  $            936,510  $        1,030,161
Cost of Goods  $        340,640  $        385,918  $        441,631  $            490,899  $            520,188
Gross profit  $        314,514  $        367,509  $        387,139  $            445,611  $            509,973
Gross margin % 48.01% 48.78% 46.71% 47.58% 49.50%
Expenses
Payroll  $        108,600  $        114,030  $        119,732  $            125,718  $            132,004
Marketing  $            8,000  $            8,500  $            8,700  $                8,900  $                9,000
Depreciation  $            9,996  $            9,996  $            9,996  $                9,996  $                9,996
office supplies  $            1,200  $            1,250  $            1,300  $                1,350  $                1,400
Utilities  $            6,600  $            6,900  $            7,225  $                7,640  $                8,022
Insurance  $            9,000  $            9,500  $          10,000  $              10,500  $              11,000
Rent  $          24,000  $          24,000  $          24,000  $              24,000  $              24,000
Total Operating Expenses  $        167,396  $        174,176  $        180,953  $            188,104  $            195,422
Profit before tax and Interest  $        147,118  $        193,333  $        206,186  $            257,507  $            314,551
Interest Expenses  $            5,000  $            4,800  $            4,600  $                4,400  $                4,200
Tax (2.7%)  $            3,972  $            5,220  $            5,567  $                6,953  $                8,493
Operating Income  $        138,146  $        183,313  $        196,019  $            246,154  $            301,858

Financial Forecast for five years

Inference

From the table above, AMY’ Restaurant will realize a sales revenue amounting to $655,154 in the first year of operation $753,427. Subsequently, the enterprise will make a profit amount to $828,770, $936,510, and $1,030,161 in the FY 2021, FY 2022, FY 2023, and FY 2024 respectively. In addition, the company is expected to record an operating profit amount to $138,146, $183,313, $196,019, $246,154, and $301,858 in FY 2020, FY 2021, FY 2022, FY 2023, and FY 2024 respectively. This indicates that the venture will be profitable with a projected increase over the years, as depicted in the chart below.

AMY's Restaurant Five Years Operating Income

Figure 4: Sales Forecast for five years

Important Assumptions

In most cases, the market is often hit by economic uncertainties that would affect business operations. As a result, the financial plan understates the incomes to allow for conservative judgment and financial estimation. Some of the key assumptions include 

  • A slow economic recovery process over the next five years
  • Access to capital and financing is enough to maintain the restaurant financial plan
  • The continuous growth of popularity for the foods and beverages served by the restaurant in the target market
  • The constant interest rate over the next five years
  • Low inflation rate below 5 % over the following years
  • Realizing over 150 units of the product available on the menu daily

Risks 

The restaurant managers Amy Davis and Lisa, will continually examine the potential risk and take corrective measures focused on offering adequate prevention, risk reserves, and control. Some of the identified potential risk associated with operating the restaurant business includes 

  • Economic depression. This entails the economic trends such as the economic downturn affecting the attainment of the bottom line.
  • Competition and change in buying patterns. The shift in buying pattern is another potential risk influenced by various factors such as health conscience and increased inflation. 
  • Supplier. The risk involves the supplier’s failure to deliver the ordered item within the stipulated date affecting the restaurant’s overall operation. 
  • Technology. Growth in technology affects the mode of operation, such as the introduction of point of sale machines. 
  • Inflation. Inflation rate affects people spending, which influences the buying pattern of the target consumers. 

Conclusion

From the financial plan, AMY’s Restaurant will be a profitable venture worth investing in. By effectively administering the potential risks, the company will realize business continuity and long-term sustainability for the next five years in operation. Further, the break-even analysis and the pro forma profit and loss support the profitability of AMY restaurant.

Reference;
  • Darbi, W. P. K. (2012). Of mission and vision statements and their potential impact on employee behavior and attitudes: The case of public but the profit-oriented tertiary institution. International Journal of Business and Social Science3(14).
  • David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach. Pearson.
  • Yu, C., & Zhang, T. (2010). Internal factors affecting the organizational internationalization process: Evidence from Huawei case study. Sweden: Halmstad University.

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