How to come up with a recreational business plan

Recreational facilities that locals can use to unwind after a long day at work or to mark a special occasion are becoming more and more necessary. Thus, the concept for the Hub Brew and Bistro was born. It will be a fine dining establishment with fusion cuisine and a cozy, homey atmosphere. The business plan that is presented below details the procedures that must be followed when opening the restaurant. Economic overview, market analysis, industry analysis, competition analysis, SWOT analysis, financial requirements, and a personal assessment are included. A profitable company venture will be created thanks to the essential knowledge offered.

Economic Overview

The business environment poses various micro and macro-economic factors that might affect the running of the business. The micro environment is constituted of all the aspects within the restaurant’s surroundings that will shape the way the business is run because they are out of the Hub’s control. They include the needs of the clientele, the qualifications and skills of the employees, the price of the goods and services provided by the suppliers, the presence of competitors, the input of investors and the perception of the public and the media (Oxford College of Marketing, 2014). The macro environmental factors that could affect the Hub include the demographic factors that are defined by the clients and the market, the economic environment, the possibility of natural calamities, social and cultural forces, technological advancements as well as political and legal factors (Oxford College of Marketing, 2014). The above micro and macro environments have a profound effect on the success of a business and as such, the Hub should carefully consider them if the restaurant is to be successful in the long run.

Market Analysis

The projections of the economic growth that is expected of the area indicates a massive potential for the success of the business. There are numerous infrastructural developments that are taking place in the area, including the expansion of roads as well as the construction of commercial space and residential houses. At their completion, these structures will attract middle class residents that present a lucrative business opportunity for the restaurant. Furthermore, the area lacks a restaurant that offers a fusion menu that can be enjoyed within and outside the establishment. The Hub shall cater to these needs, as well as the penchant for high quality services that is characteristic of the middle class. The ambience of the Hub shall be warm and welcoming, suitable for a relaxing meal after a long day, first dates, family get-togethers and business lunches or dinners.

Industry Analysis

The Hub Brew and Bistro shall target the consumer who seeks an executive dining experience, unique fusion food featuring aspects of different cultures and high quality services. The restaurant shall be based in a growing town that is currently being transformed form an agricultural town into a business hub, with many businesses and organizations choosing to create their headquarters in the area. In fact, the location has been experiencing an expansive growth in population, with many planned communities sprouting around it. Infrastructure developments such as the expansion of roads and the construction of residential and commercial units are being made to accommodate the influx of people. Most of the structures are top notch and they feature the latest in architectural and technological advancements, factors that are guaranteed to attract the interest from middle class families. The high income, the penchant for good food, fine dining and the desire for quality service that is characteristic of the middle class residents shall provide the Hub with a wide consumer base from which it can cultivate loyal clientele. In about three years, the town shall have developed significantly, thus providing a flourishing economic environment where businesses such as the Hub are bound to succeed.

Competitor Analysis

With the rapid development that the town is set to undergo in the coming years, it is reasonable to expect that there shall be many establishments similar to the Hub Brew and Bistro, which will open up the restaurant to stiff competition. In fact, the area is already home to high end restaurants as well as bakeries and coffee shops, which already have an edge by being the first in the area. As such, being a new entrant into the market, it might be more difficult to attract consumers from brands with which they are well familiarized. The restaurant shall have to undertake an intensive marketing campaign to popularize its brand and the exercise might cost a lot of money. Furthermore, the fusion foods that the Hub offers might repel some consumers that are wary of trying foreign foods. However, in comparison to the primary competitors in the area, the Hub Brew and Bistro has qualities that might help place the restaurant on an equal footing or perhaps even surpass the dominant eateries. First of all, the fusion menu that the restaurant boasts is unique, as it mixes attributes from Japanese, Italian, Mexican and French cuisines. Therefore, while there are other fine dining establishment that offer good food, none of them will provide some of the exceptional food items that the Hub will create. The Hub prides itself in its ability to create a memorable dining experience that shall stimulate the senses of the consumers. While the competition presents significant obstacles, the restaurant has attributes that shall ensure it success, and there are solutions that can be applied towards their dissolution.

Operations Detail

The business will be located at the city center, in the heart of the town. The piece of prime real estate will expose the restaurant to the high amount of foot traffic that shall frequent the central business district during the day. It shall be a great place to have a business or casual lunch, a drink after work and dinner. Furthermore, the delivery services that shall be offered by the Hub give it a greater outreach to the residences that are situated around the town, with the central location facilitating the quick delivery of food to the outskirts from virtually all directions. The use of riders will subvert any traffic on the access roads and ensure orders are delivered while they are still warm. The Hub’s location a few meters off the main road that leads into the city will make it easily accessible to clients. To prevent any legal or permit issues, the restaurant shall be based in premises that are specifically set aside for that purpose. Luckily, the development projects that are currently running in the area include commercial spaces set aside for recreational purposes such as shopping, movie theatres and arcades. As such, the restaurant will be able to avoid the application of a change of use.

SWOT Analysis

A SWOT analysis, which stands for Strengths, Weaknesses Opportunities, and Threats, is a study that reveals the potential challenges and prospects that a company stands to face while executing its activities. The information provided will be especially crucial as it will aid in the creation of strategies that shall increase the Hub’s chances of success (Chermack and Kasshanna, 2007, p 386). The Hub has several strengths that might ensure its longevity in the market. First, the restaurant will offer a strong product line in its menu, its excellent customer service and its warm ambience. The sum of the products and services that are not offered elsewhere in the vicinity will keep the establishment at par with the rest or possibly surpass them. Furthermore, the restaurant shall also offer consumers the chance to enjoy their meals in their offices, the comfort of their homes, or any other location of their choosing through a delivery option, running from 11 am to 9 pm. Most fine dining establishments solely cater to guests that physically visit the restaurant either as reservations or walk-ins. As such, taking the restaurants to the guests might give it a competitive advantage. The core weaknesses that the restaurant shall suffer is the lack of brand recognition, which might take a lot of marketing to accomplish that may not create as much buzz as expected. The risk of spending a significant amount of money on a venture that might eventually fail presents a great disadvantage. As for the available opportunities, the additional delivery and catering services will create a better outreach for the Hub as compared to other fine dining restaurants in the areas. There is also the possibility for growth due to the steadily increasing middle class populace within the area which shall expose the services of the Hub to potentially new lifelong clients. The threats are the competition to the hub as a result of the established restaurants as well as the possibility that several other entrepreneurs might have a similar idea and launch fine dining establishment that have an international menu. Overall, as much as the threats and the weaknesses might result in the failure of the Hub, there are a variety of strengths and opportunities that it can exploit to thrive.

Financial Requirements

The starting budget for the Hub Brew and Bistro is estimated at 2 to 4 million dollars. Most of the capital shall be raised by ourselves while the rest shall be covered by a loan that provided by the bank. The following is the budget that breaks down the ways in which the above funds shall be spent.

Description

Estimated Cost in Dollars

Source of Estimates

Restaurant Location Rental

450,000

Market Rental Rates

Renovation and Remodeling

350,000

Professional Contractor Companies

Ovens and Stove Tops

200,000

Restaurant equipment suppliers

Branded Cutlery and Crockery

175,000

Restaurant equipment suppliers

Food Preparation and Cooking Equipment

350,000

Restaurant equipment suppliers

Indoor Dining Furniture

300,000

Furniture Stores

Outdoor Dining Furniture

150,000

Furniture Stores

Walk-in Freezer

70,000

Restaurant equipment suppliers

Walk-in Refrigerator

120,000

Restaurant equipment suppliers

Bar Equipment and Furniture

170,000

Restaurant equipment suppliers

Opening Stock

250,000

Supermarkets

Table cloths, Drapes, Vases, Table Center Pieces, Light Fixtures

15,000

Interior Design Consultants

Van and Motorcycles for outside catering events and deliveries

500,000

Car Dealerships

Cleaning Equipment

5,000

Supermarkets

Working capital (fuel for delivery, utility bills, supplier fees, permits and licenses, employee salaries and benefits)

500,000

Market research

Total capital required

$3,605,000

Total capital available

$4,000,000

The following financial plan illustrates the projected sales and expected profits in the form of an income statement.

THE HUB BREW AND BISTRO

FORECASTED INCOME STATEMENT

2018-2019

Expected net sales for the year $350,000

Cost of sales $80,000

Gross profit $180,000

Operational Expenses

Employee salaries $150,000

Wages $2,000

Insurance $5,000

Advertising $10,000

Selling Expenses $1,500

Commission $20,000

OPERATING INCOME $188,500

Interest Payment $5,000

Income before taxes $183,500

Taxes (30%) $55,050

NET INCOME $128,450

Personal Evaluation

As per the assessment of my potential to become an entrepreneur, the Global Enterprising Tendency Test states that I am occasional entrepreneur. My score, a 74%, indicates that while I have the strengths that can potentially make me enterprising in certain environments, I am more likely to go on a business venture in my leisure time or in employment for financial security reasons. However, when faced with an idea that is innovative, such as the restaurant, I am sure to follow it up. As I believe in the Hub, I am likely to execute the project, although I might take more classes to develop better business skills as suggested by the site.

References

Chermack, T. J., & Kasshanna, B. K. (2007). The Use and Misuse of SWOT Analysis and Implications for HRD Professionals. Human Resource Development International, 10(4), 383-399. do:10.1080/13678860701718760

Oxford College of Marketing. (2014, November 4). The Impact of Micro and Macro Environment Factors on Marketing. Retrieved from https://blog.oxfordcollegeofmarketing.com/2014/11/04/the-impact-of-micro-and-macro-environment-factors-on-marketing/