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Business plan of fast food restaurant
1. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
Fast Food Outlet – Business Plan
This is a business plan for a fast food outlet in Islamabad that will serve Pakistani Fast Food to middle
income groups. There is a segment in the market that would cherish the service level offered by a fast
food outlet but with local food recipes. Even some of the multinational chains have started offering
localized products to cater to the taste of such a segment. However, we feel that needs of this market
remain underserved in the absence of a local brand of fast food restaurant that offers “desi” food.
MARKET SEGMENTS:
The customers in the restaurant industry in Islamabad can be classified into following segments:
Exotic: This segment consists of top executives and business people who can afford to spend Rs.
1000/- or more per meal. They eat in small groups, mostly to entertain peers from social
networks, and clients. Excellent quality and taste in an exquisite environment is required.
Personalized service is important for this segment.
Executives & professionals: This segment includes top and senior executives and business
people who spend Rs. 500/- to Rs. 800/- per meal. They eat in groups, socializing with peers
from professional networks. The variety in menu offered, taste, environment and the service
level is important to this segment.
Quick and convenient: This segment represents the population that spends Rs. 300/- to Rs.
500/- per meal. They have quick working-lunches in groups. They prefer quick served meals at
affordable quality and taste. The environment, freshness of food and the service level is
important to them too.
Bargainers: This segment consists of a population that affords to spend Rs.100/- to Rs. 200/- per
meal. They are price conscious consumers who are less keen on service quality and
environment. This group may also include students, office workers and white collar
professional. Local taste and local food-meal is of primary importance to this segment.
TARGET MARKET:
Our target market is defined as Quick & Convenient segment from F10 sector, Islamabad.
Two geographical locations were considered and compared to opening the fast food outlet. Blue Area in
Islamabad was compared with F10 sector for peak and off peak hour traffic. The data in following tables
provides capacity of each restaurant in terms of number of tables, occupancy between 1PM to 2PM (i.e.
peak hour traffic) and 4PM to 5PM (i.e. off peak hour traffic).
2. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
Blue Area Restaurants
Between 4PM to
Between 1PM to 2PM 5PM
%age of
Number of tables %age of occupancy occupancy
Savor Foods 117 97% 48%
Bar BQ Tonight 23 78% 30%
Subway 14 57% 28%
Wang Fu 26 42% 23%
Haleem Ghar 17 58% 41%
F10 Sector Restaurants
Between 4PM to
Between 1PM to 2PM 5PM
%age of
Number of tables %age of occupancy occupancy
K.F.C 19 94% 47%
Pizza Hut 24 79% 50%
Haji Resturant 8 25% 25%
Rock Bistro 21 52% 38%
Italian Oven 18 55% 33%
On the basis of information in tables and prices that these restaurants charge, we have made the
following observations:
Blue Area has higher density and generates high sales volumes but competition here is also very
high.
Competitors in Blue Area include local giants like Savor Foods, which serves Pulao at
approximately 150/- per head, and Haleem Ghar that too falls in the same price range.
There is a higher risk of mis-positioning ourselves with Savor Foods and Haleem Ghar, which
may then result in a price war with these two competing brands.
In comparison, F10 has a lower flow of clientele but the competition is also less.
In F10 sales volumes would be lower but better unit prices are obtainable, since most competing
brands are charging Rs. 300/- or above on their meals.
There is a good likelihood for positioning parallel to KFC or Pizza Hut in F10 area, which is the
desirable position of our outlet.
3. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
CUSTOMER NEEDS OF THE TARGETED MARKET:
Fast food outlets offer eateries along with space, time and an experience that customers like to pay for.
Or in other words customers not only pay for the food but also for the overall environment and
experience that a fast food outlet offers. The customer seeks to fulfill the following needs in his
experiencing the services of a fast food outlet.
Convenience in approachability to the outlet
Sense of privacy
Sense of hygiene, physically and visibly is prevalent in the structure of the outlet
Feeling of psychological comfort, accompanied with entertainment
Just In Time services
Very tidy and orderly space set up for the customer
Comfortable service infrastructure that enables a fast service to satisfy a level of customer
needs
Repeatedly reliable in meeting customer’s expectations of a good food
Safety standards are very appropriate for individuals, children and families
Affordability/Reasonable prices
Tasty, fresh, hygienic and filling meal
POSITIONING:
The ideal position for our brand is to appear within the league of international brands such as
McDonald’s, KFC and Subway but with a desi menu. The possible position statement would be
“Tasty Desi fast food , with excellent environment and quick services”.
We should be able to fulfill the customer needs associated with the fast food industry, as listed
above. These needs can be catered without creating an exact replica of typical fast food outlet
that consumers usually associate with the foreign brands.
We seek to build our differential advantage on our position in the market. However, there is a
possible risk of customers mis-positioning the brand with other local food options that are
cheaper than our offer. This is a possible marketer’s dilemma that the customer could position
the outlet as a Dhaba level eatery that charges more. Our product design and offering should
help discount any such impression.
CRITICAL SUCCESS FACTORS
CSF 1: Customer convenience and satisfaction with the products and services must be maintained at all
time.
Conveniently approachable site
4. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
Availability of parking spaces
Main cluster area of our market
Easily recognizable identity
Clean fixtures and furniture
Amply and good quantity food (especially meat)
Courtesy in service
CSF 2: Innovation in product and services is made part of the organizational culture. Customer must be
introduced with new offerings to cater to their changing tastes and preferences.
CSF 3: Recruiting, training and retaining core staff that is involved in the delivery of high quality products
and services.
CSF 4: Developing, communicating and managing operating procedures to ensure consistent quality and
reduce line wastages
Managing purchases.
Managing an economy of production
Maintaining quality and taste in food
Floor management
Daily cooking preparations
Identifying and control pilferages
STRATEGIC OBJECTIVES:
Objective 1: Make profits in the first year of operations
Objective 2: Acquire customer from the target market
Objective 3: Maintain a high customer satisfaction level
PRODUCTION PLAN:
We will have a capacity to serve more than 200,000 customers per year with seating capacity of
48 seats (12 tables)
Food will be served at a comfortable, well lit and temperature controlled environment.
As per the information provided 1,200 sq. feet of total floor area is available for less than Rs.
100,000 per month, with an advance payment of Rs. 500,000/-
The restaurant and washroom will construct at 60% of total area, while the rest will be used in
the kitchen.
Customers will place an order at the cash counter and will receive an order number after making
payment. The order will be served within 10 minutes on the table where customers are seated.
5. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
The kitchen and the service staff will be dressed up in neat and clean uniform with disposable
serving gloves.
A high level of hygiene will be maintained at all times.
STAFFING PLAN:
Following is the staffing plan for our fast food restaurant:
Staffing Plan
Designation Number Monthly salary Annual Salary Salary/person
Chef 1 60,000 720,000 60,000
Cooks 1 20,000 240,000 20,000
Kitchen service staff 3 36,000 1,296,000 12,000
Waiters/ Service staff 3 36,000 1,296,000 12,000
Cleaning staff 2 20,000 480,000 10,000
Cashiers 2 24,000 576,000 12,000
Security 1 10,000 120,000 10,000
- - -
Total 13 206,000 4,728,000 136,000
Manager 1 80,000 960,000 80,000
MARKETING PLAN:
1. Product and Service:
The product will be fulfilling in its eatable content (Belly-full)
The product will be served in a way that it will be easy and fast to consume without oiling the
hands.
The service level will be maintained to cater to customer needs discussed earlier.
The product will be unique in preparation and presentation
Packaging as per fast food outlets standard, i.e. paper and plastic for on the go consumption.
2. Price
Competitive pricing with McDonalds and KFC
Pricing will also be used to align our market positioning with multinational fast food chains
3. Promotion:
Very appealing and registering Outlet displays
6. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
Distributing flyers in the targeted areas
Promotional coupons at launch, off peak hours and holidays
4. Placement:
Outlet approachable with convenience
Parking space available
Within the main cluster area of peer fast food restaurants
Identifiable easily
5. People:
Recruiting a staff that has an appropriate interpersonal skill to deliver customer services.
Recruiting cooking staff that can feel the pulse of the taste required by customers
Cooking staff should be able to manage the kitchen and can deliver quality in food with
consistency.
6. Process:
Identify and develop procedures for all staff, as per their assigned scope of work.
Training of staff on the SOPs
Ethical codes
Hygiene codes
Update training to staff on a regular basis
Rewarding based on clearly stated performance measures
7. Physical evidence:
Nice and clean staff uniforms
Easy to manage, sleek furniture and other fixtures
Always clean, tile floors
Maintaining high hygiene levels
Temperature managed at a comfortable level in all seasons
Bright and comfortable lighting
Light background music
REAKEVEN ANALYSIS
Our fast food outlet will break even at sales of 23,858 units. This number is based on
assumptions that unit price is Rs. 300, unit cost is Rs. 180 and fixed cost is Rs. 2,863,000.
7. Business Plan for a Fast Food Outlet Authors: Babar Malik and Farooque Malik
Based on our sales forecast, the breakeven will be achieved in the first year of operations
FINANCIAL ASSUMPTIONS:
1. Revenues assumptions
There will be 12 tables with total capacity of serving 48 customers at a time.
The outlet will operate 7 days a week.
There will be 2 peak hours and 10 non-peak hours in a day.
We are assuming 100% capacity utilization for peak hours and 10-15% capacity utilization for
non-peak hours.
It will take a customer an hour to consume a meal, starting from placing an order at the cash
counter to the time when he leaves the restaurant.
Take away sales will be 25% of dinning in sales.
The unit price will increase at 10% per annum.
2. Cost of goods sold assumptions
Cost of goods sold including raw material, labor and utilities will increase at 10% per annum.
Utilities are assumed at 13% of total raw material cost.
3. General administration expenses
Rent will be paid at Rs. 100,000 per month. The rent will increase at 10% per annum
Depreciation is calculated at 10% per annum on the book value of assets, using the diminishing
balance method.
Maintenance is 3% of depreciation expense