Beach-Bar Restaurant Business Plan
Effective establishment and operation of a global beach bar and restaurant business requires prior planning and exhaustive analysis of the holistic business environment. The name of the proposed business is Mallins Beach Bar and Restaurant and would be located in San Diego, California. The business will deal with various European cuisines as well as exotic alcoholic and non alcoholic drinks from across the globe. A needs assessment ascertains that the company products and services are rare in the market and would therefore be successful. The mission of the company is to attain financial stability and sustainability without impacting negatively on the environment and the wellbeing of its staff.
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The results of the regional analysis indicate that the company would benefit from the trade agreements such a NAFTA and FTAA that are supportive of the industry. California has a stable economy that is demonstrated through its gross domestic product. Reportedly, this was the highest in the US in 2007 and contributed 13 percent to the national gross domestic product. The country relies on technology, government and agriculture to sustain its economy. Financial reports however show that it is currently struggling with implications of budget deficits. The political environment is stable and supportive of growth and development of the industry. Further, the population is liberal and embraces western culture.
The country risk analyses suggest the political changes can impact on related policies and the general business environment. Legal risks can stem form non compliance and incidences of double taxation are apparent. Then, both the external and internal business environment is viable and inherent weaknesses can be effectively addressed by the company. To enhance effective performance, the company chose to enter the market through joint venture. This would enable it to address the legal requirements with ease and benefit from the established networks. With respect to management, the restaurant will have this at two levels; human resource management and supply chain management. Their operations will be under the oversight of the board of directors.
The legal and ethical challenges that the company anticipates to encounter have also been identified accordingly. With regards to financials, the company needs close to $385,000 to offset its operations. During implementation, it will make efforts to align its operations to the expectations of the clients by maintaining high quality products and services. It will use performance appraisals to frequently monitor its performance and ensure that it meets the established national and international standards.
Organization and Product/ Service Analysis
Mallins Beach Bar and Restaurant will be a California based company which will operate on a double unit, medium-size bar and restaurant. It will be located at 809 Thomas Avenue in San Diego. It will specialize in contemporary European diets and exotic alcoholic as well as non alcoholic drinks. Its menu is generally inspired by a variety of cuisine specialties and would therefore appeal to different clients. Besides the regular menu that would be typical to the company, it will also offer a three course and a three course lunch under the product name of business lunch. The bar and restaurant would be open all days of the week throughout the year.
During large holidays, it would be open for twenty four hours to cater for the many tourists that visit the shores during this period. The company will also be frequently planning for wine tasting special evenings that would be accompanied by a five course meal. This will be entirely sponsored by the distributors and would give the clients a chance to learn about our diverse products and services. This bar and restaurant will be an ideal place from which the clients can have extra treatment. In particular, they will be allowed to have business meetings, hold quiet conversations or carry out their activities on special occasions. Clients having special occasions would have customized service and a reserved place without any interruptions.
The goal and objective of the company is aligned to multifaceted success. The first goal is to attain financial sustainability. This will be met without negatively impacting on the products, services and the health of both the clients and the staff. In addition, the environment would be held in high regard and the company will ensure that products and services do not impact on it adversely. Alongside this, values related to fairness, positive attitude, generosity and understanding would be upheld by the management, vendors, staff and clients. The company believes that awareness and enhancement of the preceding factors would enable the company to give its related efforts a sense of meaning and purpose that is well beyond its fundamental financial goals.
Reports from extensive market research indicate that the needs of the entire European clients have not been effectively catered for by the hotels that are in the region. To begin with, the hotels and bars are located on single units and therefore not spacious enough to accommodate a large number of clients at any given time of the year. This limitation also prevents them from allowing clients to hold special events during specific times of the year when the tourists flood the region. Further, most hotels, restaurants and bars are always close during important days such as the New Year. Also, activities in such hotels are usually low on Mondays and as a result, most of them do not run operations or the entire day. Addressing these concerns would enable the company to remain competitive.
With regards to the products and the services of the company, research indicates that most hotel in the region mostly deal with sea food and capitalize on American menus. This has been disadvantageous to the clients that are not comfortable with the menu. In addition, customization of products and services is generally low because of the inherent costs. Pursuing this will therefore give the company an upper hand in this respect. Coupled with the ability to offer a host of exotic local and imported alcoholic and well as non alcoholic drinks, it is certain that the company would be able to penetrate the market with ease.
California is one of the American states and is governed by the Federal governments too. One of the trade alliances that the nation is party to and which would affect the industry pertains to the North American Free Trade Agreement (NAFTA). The agreement was signed by three countries; Mexico, Canada and the United States. NAFTA eliminates any forms of trade barriers between the three countries. Tariffs as well as duty were removed from all imports and exports. In light of the company, this would enable it to establish its operations with ease. NAFTA provisions also have implications on the products and services that the company would engage in.
Also, America is party to the Free Trade Area for Americans that is commonly referred to as the FTAA. This is a negotiation between 34 democratic countries that occupy the hemisphere. The provisions of this seek to reduce or eliminate trade barrier between the member countries. Just like the NAFTA, this allows for free movement of goods and products between the member countries. Undoubtedly, the alliance has significant economic implications on the industry and specifically on this company.
Economic analyses of the entire European region ascertain that the economic growth is steady. In particular, recent reports indicate that the gross domestic product increased by a significant 1.2% in the past year. The personal income of the inhabitants also improved significantly implying an increase in the quality of life. The real disposable income reportedly increased by 0.2 % (Fagan, 2003). The preceding statistics indicate that the regional economy is steady and would therefore be supportive of the company.
As aforementioned, California State is found in the United Sates and is the third largest with regards to landmass. Population wise, statistics indicate that it is the most populous state in the region.
The economy of this country can be considered to be stable. It depends on different sectors that range from construction, agriculture, mining, information and technology to manufacturing and real estate. According to the 2007 financial reports, its gross domestic product was approximately $1.812 trillion. Compared to the entire region, this was the largest in the United States and contributed a significant 13 percent to the national gross domestic product. The country has an unemployment rate of close to 12% with the following sectors being the main sources of employment; trade, government, business and professional services, health services, education services, transportation, trade and manufacturing. In 2009, it exported goods that were worth $ 144 billion. In this, computers and electronic products were the most and assumed 42% of the entire goods.
The government of California is made up of three branches, the executive, judiciary and legislature. The state allows for direct and active participation of its population in the election process through referendum, initiative, ratification and recall. The capital of the state is Sacramento. The mode of governance allows the political parties to make choices between pursuing primary or closed primary approaches with regards to party elections. The governor of the state together with state constitutional officers is allowed to serve for four terms but they may only be re elected once. Its legislature currently has forty member in senate and eighty members in Assembly. While senators are allowed to serve for four terms, assembly members are limited to two. The 2007-2008 sessions saw a total of 32 republicans and 48 democrats be elected in the assembly (Dotson, 2006). The senate on the other hand has 15 republican and 24 democrats.
The state levies a maximum variable rate of 9.3% on income tax. This translates to an estimated $40 billion on an annual basis. Its state sales tax is 8.25% that adds up to 10.75% when local sales tax is included (Fagan, 2003). The entire states real property is taxed on an annual basis and this is greatly influenced by the fair market value of the property during the purchasing period or at a time when new construction was completed. Currently, the country is being faced with financial challenges as its budget has $26.3 billion deficit. This can only be attained through budget cuts on a short term, while other viable approaches are explored.
Although the Californian culture is entirely western and derived from that of the United States, it also has historical Hispanic influences. Seemingly, its culture is also greatly influenced by the immigrant population because of the fact that it borders the Pacific Ocean. Immigrants form Latin America have particularly influenced the culture of the country as they se it as a cross road to enter the United States. From a political point of view, the inhabitants are considered to be more liberal than their counterparts in inland states. It accepts alternative lifestyles and does not limit values and attitudes to Christianity. With respect to religion, the country embraces Christianity with Muslims accounting for only 1% of the entire population.
The country has a potential for attack by terrorist groups because of its proximity to the sea. In addition, it is liable to other environmental hazards such as flooding, earthquakes and fires. The country acknowledges that terrorism is indeed a real threat especially after the 1995 attack in Oklahoma City. In response, it developed a terrorism response plan and established a relative committee that is charged with the responsibility of identifying and responding to possible terrorist attacks. Currently, the security of the country has stabilized. This is attributable to its protection programs, critical infrastructure, information sharing systems and viable training programs.
Country Risk Analysis
The fact that risk analysis would enable Mallins Bar and Restaurant to carry out its operations with ease can not be disputed. Due to previous terrorist attacks, California has put in place various stringent measures towards enhancing its security. Emergent factors pertaining to illegal immigration have also made the country to implement and enforce stringent legal requirements to address the issues.
With regards to political or legal risks, emergent research shows that California is often keen with demand or margin estimation. In case of a high take off, these are likely to be more than the estimates. These can have severe legal implications especially if the company does not address its promises regarding aspects such as social corporate responsibility. In addition, the prices of that the company sets need to be in line with the legal expectations in order to avoid harming the industry. Furthermore, it would be important for the business to stick to its model in order to avoid any legal implications. In this respect, the country has stringent requirements and expects all business to adhere to these accordingly.
From a political standpoint, any changes in governance impact on the industry in different ways. To begin with, it should be appreciated that the government is responsible for making and implementing important state laws. In most instances, these tend to be aligned to the state politics. Generally, changes in political governance affect the general business environment and specifically influence customer demands and investment. The relative unexpected shifts in taxation can also impact on the performance of this business. In this consideration therefore, any changes in governance can have direct impacts on the business.
Then, the exchange and possible repatriation of funds can attract detrimental legal implications. Although the state government is supportive of repatriation of capital whenever a business deems necessary, this changes with the political atmosphere. The company would need to be well versed with all the legal procedures before getting to business. Factors pertaining to treatment of collateral in California for foreign investment differ considerably with local and national investment. These need to be clarified for effective performance.
Assessment of the industry in California also underscores incidences of double taxation that can have diverse financial and resource implications to the company. This is unavoidable especially during registration of business as it would require paying taxes to both the federal and state government (Elstein, 2009). The company needs to understand taxation requirements in order to avoid relative legal implications that can be very severe.
The food industry in California is the third largest and has a host of factors. In San Diego alone, there are numerous hotels and restaurants and entry in the market is likely to spur intense and unhealthy competition. In addition, food prices within the industry are subject to frequent changes. This needs to be planned for in advance in order to enhance optimal performance. Also worth mentioning are the frequent changes in attitudes with respect to the quality of food that clients consume. Most of them tend to prefer foods with low calories that are equally expensive. Aligning these to the market prices can prove tricky in the long run.
Summary and Strategic Planning
External and Internal Environment
Mallins Beach Bar and Restaurant has certain strengths that would enable it to perform executively and be able to remain competitive in the market. To begin with, the quality of the service, products and premises is generally high. Both the interior and exterior of the bar and restaurant are spacious, clean and tidy. Regardless of this high quality, the prices are slightly lower than those of the competitors that are already established in the region. The customization of services is a unique attributes that other entities in the region do not offer (Steingold, 2009). Seemingly, this gives it a competitive advantage too. Then, the company would employ staffs that are well trained and experienced in global operations. This is in a bit to maintain quality services at all times.
Nonetheless, the company as weak points that it needs to address in order to maintain high performance. To begin with, the bar and restaurant are new in the area and have not yet established its activities. This can potentially affect the sales and make it difficult for it to maintain profits. Since the company is just being established, it has limited funds that can undermine effective functioning of its operations. It will probably incur immense costs in advertisement and general marketing in order to reach a wider clientele. Coupled with the recognition that its operations have not yet picked up, it is likely that this will negatively impact on its financial wellbeing.
Nevertheless, there are potential opportunities that Mallins can utilize to enhance its functioning. One of the main bar and restaurant in the region ceased is operations in the past month. Notably, this has reduced competition and the company has capitalized on this optimally by establishing its operations in the respective physical location. Further, the next building has been vacated. This allows for expansion of the operations of Mallins bar and restaurant. This is particularly important because the local administration offers financial grants for companies that regenerate unused buildings and develop them accordingly.
Despite this, the company still faces various threats that can potentially harm its operations. Based on the industry analysis, the operating costs are set to increase in the near future. This ill impact negatively on the company especially because it has not fully established its operations. From the preceding analysis, it is believed the company has an ability to perform well in the market. For this reason, it seeks to pursue the opportunity and enhance its financial wellbeing in future.
Mode of Entry
The strategy that the company will employ in entering the market is joint venture. This will include merging its operations with those of a smaller hotel that is already established in the region. The essence of this is to be able to resolve a host of anticipated logistical problems. Also worth appreciating is the recognition that this entry mode will expose the hotel to the wide ranging networks that the hotel has already established. In addition, this will aid in smoothening the legal process especially considering that the investor is not a national (Timmons & Spinelli, 2008). However, the company plans to absorb and buy the hotel once the operations become profitable.
It can not be disputed that effective management of Mallins bar and restaurants will impact positively on its holistic performance and influence its attainment of goals and objectives.
Human Resources Management
This would be responsible for executing several interrelated personnel activities such as recruitment, training, selection, supervision as well as compensation. The tasks will be undertaken by human resource managers that will be drawn from diverse backgrounds. Basically, recruitment and selection will be done through various ways and potential employees would be sourced form employment agencies, educational institutions and employee recommendations. The number of employees would increase in future inline with the expansion of the business. With regards to compensation, employees would be paid indirectly through their respective banks. The compensation will be reflective of the skills of the employees. The human resource management team would be responsible for ensuring development of skills through frequent training.
Supply Chain Management
This segment of managers would be responsible for overseeing the daily operations of the business. Departments under this would include marketing, stores and supplies, catering and finance. Marketers would be responsible for popularizing the business and sourcing for clients accordingly. The respective managers will oversee operations of both the restaurant and bar. These would b partly sourced from the hotel that the company would merge with. Then, both the human resource management and supply chain management will report to the board of directors. This will comprise of individuals from different professional areas. Their ideas would contribute significantly to the development and growth of the company.
Legal and Ethical Challenges
It is widely agreed that restaurant and bar business are generally faced with various legal as well as ethical challenges. These affect their performance in different ways and if they are addressed effectively, they can compromise their optimal functioning. With respect to ethics, there have been incidences of discrimination on the basis of nationality in the recent past. The company is likely to face this challenge because of the international nature of its operations. Viable intervention measures need to be put in place to address these concerns accordingly. In addition, there is a possibility of bribery from clients in a bit to secure accommodation or services especially during peak hours. Likewise, this is unethical and can compromise the reputation of the company in the long run (Rogoff, 2007). For this reason, measures should be put in place in advance to address inherent concerns in an effective manner.
Also, the company is likely to grapple with legal concerns pertaining to employment of the youth. In order to address the relative challenges, the company needs to strictly comply with the fair labor standards act. In this regard, teen worker safety tools can be employed in critical decision making. Aspects pertaining to minimum wages and overtime also need to be addressed well in advance and should be aligned to the provisions of the above mentioned act. Also worth mentioning is the aspect of immigration that current restaurants are struggling with. In this respect, research shows that illegal immigrants constitute approximately 10% of the workers in restaurants. To avoid adverse legal implications, the company needs to comply with provisions governing immigrant workers in California.
The company requires an estimate $385,000 funds in the next year to cater for furniture, renovations, liquor license, kitchen equipment, legal fees, food as well as restaurant supplies, marketing and personnel fees and working capital. It presumes that there will be a slow growth economy that would not be compounded by incidences of recession and the popularity of the entity will improve with time.
Break even Analysis
This is important because it would enable the company to determine monthly or annual sales. Relative knowledge is vital for covering up the costs that are incurred during the business.
Break Even Analysis of Mallins Beach Bar and Restaurant
|Break Even Analysis
|Monthly Units Break-even
|Monthly Sales Break-even
|Average per-unit revenue
|Average per-unit cost (variable)
|Estimated fixed cost (monthly)
Sales Forecast in $
|Total Unit Sales
|Total Unit Prices
|Direct Unit Costs
|Total Direct Unit Costs
|Direct Costs of Sales
|Total Direct Cost of Sales
Expenses Forecast: Marketing Expense Budget in $
|Franchisor National and International Marketing
|Daily discounts and Offers
|Total sales and Marketing
Implementation and Strategy
The main objective of Mallins bar and restaurant is to provide its clients with high quality of food in a serene environment. It will seek to appeal to diverse individuals with regards to economic capacities, nationality and culture. The main point of focus will be to improve national and international awareness of our products and services. In particular, products and services would seek to explain to our clients our identity as well as operations or activities. The growth of this business will be entirely depended on word of mouth as we will maintain high quality production at affordable rates at all times.
Control and Evaluation
Specific standards that are in line with the national and international standards would be employed in evaluating the quality of the food and beverages. The company would ensure that all products that are used in food preparation and serving are certified and of high quality. Consumer surveys would be undertaken on a weekly basis in order to keep track of the quality of the products (Fuerst & Geiger, 2003). In this regard, it should be appreciated that consumer or client perceptions are particularly important for successful customization of the food products. Moreover, performance appraisals tools would be employed in determining the quality of service on a monthly basis. This will enable the company to make timely interventions towards maintaining and enhancing the quality of service and products.
The risks and difficulties that the restaurant anticipates in future pertain to the debilitating and overly aggressive activities from its competitors. In this regard, it is worth appreciating that the industry in California has very aggressive competitors whose activities are potentially harmful. There would also be problems related to generation of visibility that would also compromise effective forecasting of the performance of the business. These would be addressed in a timely and effective manner in order to enhance optimal performance.
Dotson, W. (2006). California’s Legislature. Sacramento: California State Assembly
Elstein, D. (2009). Restoring California’s native grasses. Agricultural Research Magazine, 52 (5), 17-21.
Fagan, B. (2003). Before California: Population and inhabitants. Lanham MD: Rowman & Littlefield Publishers.
Fuerst, O. & Geiger, U. (2002). From concept to Wall Street: A complete guide to entrepreneurship and venture capital. USA: FT Press.
Rogoff, E. (2007). Bankable business plans for entrepreneurial ventures. USA: Rowhouse Publishing
Steingold, F. (2009). Legal guide for starting and running small business. USA: NOLO
Timmons, J. & Spinelli, S. (2008). New venture creation: Entrepreneurship for the 21st century. USA: McGraw Hill.
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