Business Plan- Restaurant and Catering Business
Executive Summary
This paper represents a business plan for a restaurant and catering business. The proposed
name for this business is Xing restaurant. The reason for preparing this business plan is to
identify the objectives of this restaurant business and the steps that the company needs to
undertake to achieve these objectives. The main products of this restaurant business will be
specialty foods, and Chinese tastes like a hot pot. It is proposed that this business will be
operating in the Chinese market but will soon diversify into other markets. Any startup
organization needs to have a business plan for it to succeed in the market by gaining sufficient
market share and by outdoing the competition. The leading role of a business plan is to create the
framework for the organization and to secure the financing for the company. To this end, a
business plan presents the future of a business in a written description. Some of the main sections
of this business plan include the marketing section, financial section, products and services
section, strategy implementation section, and the organization and management team section.
The management of this restaurant needs to be mindful of the proposals made by this business
plan for them to succeed in the market by gaining sufficient market share and by outdoing the
competition.
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Business Plan- Restaurant and Catering Business
1.0 Introduction
Markedly, any startup organization needs to have a business plan for it to succeed in the
market by gaining sufficient market share and by outdoing the competition. Primarily, a business
plan is crucial since it outlines the objectives of a business and the steps that the company will
undertake to achieve those objectives (Brinckmann, Grichnik, & Kapsa, 2010). The leading role
of a business plan is to create the framework for the organization and to secure the financing for
the company. To this end, a business plan presents the future of a business in a written
description. It indicates the plans of a business and how the firm plans to execute these plans. As
such, business plans become strategic documents. Arguably, an organization will start at a
specified point with resources and abilities, but with a span, let's say of five years, the business
will be possessing a different set of abilities and resources as well as increased assets and higher
profitability (Brinckmann & Kim, 2015). The business plan shows companies how to start from
scratch towards owning something.
As a result, a business plan becomes a comprehensive roadmap that will enable a
business to grow and to develop. For this reason, a business plan communicates the purpose of a
company, what the company plans to do, and how the company plans to do it in the industry. By
doing so, the business plan attracts investors and talent, and these are critical resources for the
survival of the business. There are several reasons for writing a business plan, but the most
common ones are when seeking financing or funding when searching for new partners when
attracting, selecting, and hiring top talent, and when a company is experiencing slow growth and
change is needed (Hawkey, 2017). This paper presents a business plan of a company working in
the restaurant industry with the focus being on specialty foods, Chinese foods, and tastes. The
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business plan will be critical to this business operating in the restaurant industry since it will
indicate the objectives of the business and the steps that the business will take to achieve those
objectives.
2.0 Company Description
This section is the high-level view of a business. It explains how a business operates, who
they are, and what their goals are. In this section, the business plan includes the mission, history
of the company, and the objectives (Drucker, 2014). Other items included in this section include
business legal structure, an overview of products and services, suppliers and customers, a
summary of company growth, and a small summary of the short-term and long-term goals of the
business. The section also indicates how the business plans to make a profit.
As such, the mission of the business to be operating in the restaurant industry will be to
offer high quality and affordable specialty foods, Chinese foods, and tastes that will lead to high-
end customer satisfaction, and that will enable the company to gain enough market share and to
outdo the competition. The vision of the business will be to be the leading restaurant in offering
specialty foods and Chinese tastes like hot pot in the whole world. About the history of the
company is that the business has been started in November 2019, and it is projected that in the
next five years, the business will be having enormous resources and abilities and will be
generating high profits. Short-term objectives will include offering specialty foods, Chinese
foods, and tastes that will satisfy the customers. Long-term goals will be to gain sufficient
market share, to generate high profits, to retain top talent, and to outdo the competition. To this
end, the name of the business will be Xing’s restaurant.
Considerably, the legal structure of the business will be a partnership to comprise of two
principal partners and some other small partners. The primary source of funding for this business
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will be the partners’ contributions and lending from customer-friendly financial institutions. The
products to be offered by this business will be specialty foods, Chinese foods, and tastes or foods
like a hot pot. This business will provide catering services to its clients. The customers of this
business will mainly be Chinese people, although the company will diversify to attract customers
from other cultures who like Chinese cuisines. The suppliers of this business will primarily be
regular food vendors who sell Chinese products. The suppliers of the catering services will be
top talent hired competitively and highly remunerated to enable the business to achieve its
objectives.
3.0 Products and Services
This section will describe what the company is offering or is selling with a focus on
customer's benefits. Also, this section will include details about product or service costs,
suppliers, net revenue expected from the sale of those products. This section will also include the
advantages of the company’s products or services over those of the competitors, a description of
customer benefits, market role of the products or services, information concerning the life cycle
of the products or services, trademarks, and research and development. Considerably, research
and development could lead to new products and services.
To this end, this business will be offering specialty foods, Chinese foods, and tastes, and
specifical foods like a hot pot. Some other types of food that the restaurant will offer include
Kung pao chicken, sweet and sour pork, Ma Po Tofu, Wontons, Dumplings, Chow Mein, Peking
Roasted Duck, and Spring rolls. Xing’s restaurant will also offer Anhui, Cantonese, Fujian,
Hunan, Jiangsu, Shandong, Szechuan, and Zhejiang. These cuisines are influenced by
philosophies of Confucianism and Taoism and will give the customers a tantalizing experience
when they visit this Chinese restaurant due to their ingredients and highly valued aroma.
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Moreover, this business will be providing catering services to all the customers who like our
products regardless of their culture. The benefits that the customers will derive from these
products and services include uniqueness and a high level of satisfaction. It is anticipated that the
costs of the products and services will be average to enhance affordability, but the emphasis will
be put on the quality of our products and services. Our products will overcome those of the
competitors in that ours will be unique, high-quality, and affordable. The market role of our
products and services will be to close the gap that other similar products have not closed and to
offer our highly esteemed customers with distinctive products and services. The hot pot will be
one of the trademarks of our business. Nonetheless, research and development will be continuous
to enhance the development of new products and services to meet customer's dynamic demand
and ever-increasing from time to time. Markedly, the lifecycle of our products will begin with
product or service idea generation and run all through way to product/service testing. At the
initial stages of the business, we do not expect high net revenue, but we anticipate that the net
revenue of our products will double in the next five years. This doubling of the net revenue
means high profits for our catering business that will be working in the restaurant industry.
4.0 Market Analysis
This section will show the industry's knowledge and make conclusions based on market
research that is thorough and is extensive. As such, this market analysis will include segments of
the targeted customers, including demographics and size of each group, the description of the
industry and the outlook, and projections of marketing for our products and services. Moreover,
this section will include a detailed evaluation of the competitors while highlighting their
respective strengths and weaknesses.
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4.1 Target Market (the Customers)
Xing's restaurant, as indicated as the chosen name for our business, will mainly target
Chinese customers since the restaurant will be offering Chinese cuisines and catering services
and tastes like a hot pot. Nonetheless, this business will also target other customers who are
interested in Chinese culture. This idea means that this restaurant will diversify its operations
even to other areas out of China. Market segmentation will be based on demographics. To this
end, the business will divide or segment its target market based on population, population size,
gender, population characteristics, and other demographic features. The industry of catering
services, specialty foods, and Chinese tastes are quite extensive, and this business will take
advantage of the size of this industry to generate high revenue, to gain high market share, and to
remain relevant in the market. It is projected that the market for our products or services is quite
big, but it is saturated with businesses offering similar products and services. We will, therefore,
be chipping in to provide affordable and high-quality products that will satisfy our customers.
This way, our business will always be having repeat clients, and this strategy will be a significant
milestone in enabling us to outdo the competition and to be a business that has a high impact in
the restaurant and catering industry.
4.2 Competitor Analysis
Several similar restaurant businesses are offering Chinese cuisines. Nonetheless, our
business Xing's restaurant has the upper hand against these businesses in that our company will
be offering unique, distinctive, affordable, and high-quality products. In comparison to our
competitors, our competitors offer costly and products or services that are not unique or
distinctive. To this end, our business will be taking this weakness of our competitors to form
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formidable strategies that will enable us to survive in the market for long and to outdo the
competition.
4.3 Outline of What Makes the Company Unique
Xing's restaurant, as it is the proposed name of our business, is unique in that it offers
specialty foods and Chinese tastes like a hot pot. These kinds of products make our business
distinctive as some of these products will be the first time they are introduced in the Chinese
market. Again, our company will offer affordable, high-quality, and distinctive products and
services. Another way our company is unique is that there is the possibility of home or door to
door delivery of customers' orders. Typically, this arrangement is absent in other companies, and
if it is present, it is only in a few companies.
5.0 Strategy and Implementation
This section summarizes the marketing and sales strategy for the business and how these
will be implemented together with an operating plan. As such, this section will include; how we
will promote the company to customers, how to enter the market, pricing, costs, promotions,
distribution/logistics, and the operations cycle of the business. The operations cycle includes the
stage of acquiring supplies to the stage of delivering customers' orders. Also, in this section,
there will be information on the number of employees and the sources of labor plus the operating
facilities and the hours.
Arguably, Xing's restaurant will run aggressive marketing campaigns to promote its
products and to enhance high sales. This company will enter the market during the period of the
high or the peak season. As such, operations will start in December when there are high activities
for both local and international tourism. The plan behind this market entrance behavior is to have
a more extensive customer base at a go. This business will adopt a competitive pricing strategy
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to ensure that its products are affordable, and they enhance customer satisfaction. The business
will adopt the intensive distribution strategy to ensure that its products and services reach a large
market base and that there is the possibility of home or door to door delivery of customer's
orders. Sales promotions and advertising will be the conventional methods of marketing
communication mix that our business will utilize. Ideally, sales promotions will mostly be
relevant during the initial launching of the products and services like specialty food and Chinese
tastes like a hot pot. Advertising, on the other hand, will be a continuous process to ensure that
our business creates awareness and establishes mutual understanding consistently with our
clients. The operations cycle for our business will happen with a short time possible since it will
include the reception of supplies, preparation of customers 'orders, and then delivering or serving
the order as per the request of the customer. Considerably, the sources of labor for our business
will mostly be local talent, but as we progress, we propose hiring international talent, especially
the top management. This plan will enable our business to utilize the hybrid expertise of this top
talent.
6.0 Organization and Management Team
The organizational structure of our business (Xing’s restaurant) will be as follows:
Manager
Supervisors
Chefs, cateresses,
and cooks
Cashiers Other support staff
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The owner of the restaurant will be Xing. As indicated above, at the top of the
organizational structure will be the manager, followed by the supervisors, then followed by the
chefs, cateresses, and cooks, cashiers, and then other support staff, respectively. Power and
communication within this structure will flow from top to bottom. The principal partner of this
restaurant business will be Xing, although other major partners chose not to engage directly with
the management of the restaurant. Typically, Xing will own 60 % of the business, while other
partners will own the remaining 40 %. Xing is a qualified hotel manager who possesses these
qualifications up to the master’s degree level. For the other talent, the least qualification will be a
diploma in the respective area of specialization. Xing will seek advice from the board of
directors, which will comprise a minimum of three directors and a maximum of five directors.
Also, Xing will seek advice from management consultants who will show him the way to operate
at a low cost but in the long-run, generate high profits. This business will purely be offering
specialty foods, Chinese tastes like hot pot, and catering services. Therefore, the business will
attract highly qualified talent mostly for the chefs and the cateresses. The cashiers must possess
some background in accountancy or financial mathematics to enable them to effectively manage
cash, pay for supplies, and maintain profit reserves, which could then be reinvested to the
business until the business becomes sustainable.
7.0 Financial Section
This section indicates preoperational costs, the break-even point, and the financial
projections. This section necessitates the funding by Xing’s restaurant.
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7.1 Preoperational Costs
The preoperational costs include the cost of hiring new talent, cost of buying equipment,
cost of subcontracting space, cost of training employees, advertising cost, insurance cost, legal
fees, license fees, and accounting fees.
7.2 The Break-Even Point
This point is the one at which profit equals to loss (Ward, 2012). At this point, revenue
equals expenses. The proposed break-even point for Xing's restaurant is;
A break-even point shows a cost-volume-profit relationship. With the above break-even chart, it
is assumed that Xing's restaurant 180 covers, thereby having a possibility of serving 10, 080
customers for lunch and dinner in 28 days. The average selling price for a customer is £ 15, and
this translates to maximum sales of £151,200. The fixed costs for the restaurant are estimated to
be £ 35,000, while the variable costs of the restaurant are expected to be 40 % of sales, and this
translates to a maximum of £60,480. Therefore, when the cost-volume-profit relationship of
these figures is drawn, we have the above illustration.
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7.3 Financial Projections
The financial projections for Xing's restaurant for the year 2019 all through to the year
2021 are as follows;
This projection shows that the financials for the restaurant business will continue to rise
gradually and consistently until a point that the business will get at its peak in the year 2021.
This anticipated projection shows that this restaurant business will be a lucrative deal that will
continue to be a profitable year in year out.
8.0 Financial Evaluation of the Industry and Market Conditions
The restaurant and catering industry is a highly lucrative sector. However, getting into
this sector requires high initial capital investment to support the cost of preoperational
requirements. Nonetheless, upon operations, a business recoups this initial investment and
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continues to generate high profits. The market for specialty food and Chinese tastes like hot pot
is currently stable but very competitive. This notion means that Xing's restaurant must invest in
aggressive advertising and other tools of marketing communication to enhance the selling of its
products and services in large numbers, thereby beating the competition.
9.0 Assessment of the Risks
Risks are the conditions that increase the chances of getting a loss (Hoyt & Liebenberg,
2011). Possible risks to our restaurant business include loss of political support, difficult-to-sell,
time-to-market, Market acceptance, and Incompatible product fit. Other risks that could face our
business include reputation risk, strategic risk, operational risk, and compliance risk. The
management of Xing's restaurant needs to come up with an effective risk management plan for
the business to overcome these risks.
10.0 Conclusion
The business plan will be critical to this business working in the restaurant industry
since it will indicate the objectives of the business and the steps that the business will take to
achieve those objectives. Any startup organization needs to have a business plan for it to succeed
in the market by gaining sufficient market share and by outdoing the competition. Primarily, a
business plan is crucial since it outlines the objectives of a business and the steps that the
company will undertake to achieve those objectives. The main role of a business plan is to create
the framework for the organization and to secure the financing for the company. The above
business plan is for a startup in the restaurant and catering industry. The proposed name for the
startup is Xing’s restaurant. Ideally, the management of this business needs to be mindful of the
proposals made by this business plan for them to succeed in the market by gaining sufficient
market share and by outdoing the competition.
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References
Brinckmann, J., & Kim, S. M. (2015). Why we plan: The impact of nascent entrepreneurs'
cognitive characteristics and human capital on business planning. Strategic
Entrepreneurship Journal, 9(2), 153-166.
Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or storm the
castle? A meta-analysis on contextual factors impacting the business
planning–performance relationship in small firms. Journal of Business Venturing, 25(1),
24-40.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
Hawkey, J. (2017). Exit Strategy Planning: Grooming your business for sale or succession.
Routledge.
Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. Journal of
Risk and insurance, 78(4), 795-822.
Ward, K. (2012). Strategic management accounting. Routledge.