The Business Plan for a New Food Franchise in New York

The Business Plan for a New Food Franchise in New York
This paper gives a business plan for starting up a new food franchise in any city in the United States. Particularly, the paper will focus on The Deli Meal Restaurant –a new food joint that is started in New York City. The primary source of data used in drawing up the plan comes from the interviews conducted on customers and survey of the market. In addition to that, the plan includes an extensive analysis of the market, which prompted the business owner to start up a food franchise in New York City. Included in the paper is a set of in-depth conversations with three potential customers whose ideas become the focal point of this plan. In general, this article strives to give the insights of customer demands, price sensitivity, possible objections, and preconceptions, among other factors that influence the operation of a new business. The last part of the paper is an appendix, which also includes a detailed summary of the customer interviews.
Keywords: The Deli Meal Restaurant, New York City, business plan, food franchise, potential customer interview
Executive Summary
The operations of starting a new food franchise – The Deli Meal Café -in New York City comprises of 10 parts, which this paper will examine to give a detailed outline of how one can start up a food franchise in New York City. Although most ideas in this business plan are based on an entrepreneurial point of view, reflecting the perceived need or want, the same vision will also reflect the market opportunity.

The primary source of the data used in the paper comes from detailed with three potential customers (Grace, Maggie, and Nick), all of which are residents of New York City. The first section is an analysis of the environmental factors including the evaluations of both the market demands and competitors, industry and economic factors; regulatory, legal, and political assessment; cultural/social issues; and technological analysis. The paper will also give the strategic plan of the Café’s competitive advantage, the overall attractiveness of the market, and an evaluation of the business strategy of the Café. The latter will include the objectives; the response model of customers; strengths and weaknesses of the business plan; and value proposition.
Also included in the businessplan are the target markets, segmentation, and segmentation strategy and the market mix. In the case of the latter, the paper will review customer-product solution; price-customer cost; and customer promotion communication. In addition to that, it will evaluate the management team, with the sole focus on the members’ experience and their past success. In analyzing the business’s financial budget, the paper will cover the method of determining the cost of starting the business; how the expenditures will help the management attain the company’s objectives; and the financial statements (a 2-year income statement and pro forma, cash flow statement, a 1-year statement for the first 2 years). Moreover, the paper will project sales forecast for the first two years in both average and volume price received.
The author will also review the performance of the business objectives in line with the stipulated timeline; include the responsibility of the management and metrics for measuring the results. Towards the end of the firm are the appendices, which include the sales data, analysis of the competitors, consumer response model, financial data, customer retention, secondary sources of data, as well as attractiveness matrix and Competitive advantage indices and matrix, respectively. Lastly, the paper gives a conclusion of the plan, in which it will give a reiteration and summary of the central ideas of the paper.
Environmental Factors Analysis
Analysis of Market Demands and Competitors
New York City has several markets for local food, with the top ones being the Moore Street, La Marqueta, Essex Street, and Arthur Avenue. The latter specializes in selling Italian foods, garden needs, fresh produce, dry goods, and bakery items. It is located in the Bronx in a region dubbed the new, and provides a range of treats such as more and pasta. Essex Street Market is the destination for those in need of personalized services or a diverse variety of products and sundries, including artisan cheeses and bread, fresh produce, fish, pastries, and organic meats. The market also several restaurants that people can visit for the delicacies of their choice.
Initially referred to as the Retail Market of the Park Avenue, La Marqueta is the hub of culinary creativity tradition. Here, the City Council partners the NYCEDC to spearhead the operations to expand this vibrant market. Recently, they converted and transformed the underutilized market space to give more room for the additional retail platform and fully-equipped facilities and equipment for the kitchen that plays an integral role in the growth of food businesses in the city.
Moore Street Market is a Brooklyn’s 70-year indoor market that has served East Williamsburg and its neighborhoods for the same number of years. Initially, Moore Street Market operated under the management of the Economic Development Corporation of Brooklyn, but it currently thrives under the administration of the NYCEDC. Besides selling a range of products from various vendors, the Market also host various events over the year, such as cooking classes, holiday festivals, and numerous seminars for small firms CITATION NYC16 l 1033 (NYCEDC, 2016).
The Interviews
Although this analysis focuses the food markets which only points out the availability of food in the New York City, it does not outline the demand for restaurants. However, the following interview of three potential customers will enable the author to make an informed observation of the market needs.
First Interviewee
The Deli Meal Restaurant:
Hello! I am Jean Derek from The Deli Meal Restaurant How are you?
Interviewee I:
I am fine. Thank you!
The Deli Meal Restaurant:
What is your name? How long have you lived in the Bronx?
Interviewee I:
I am Grace Ivana Pirlo. I was born, raised, and spent much of my life here. The Bronx is my home.
The Deli Meal Restaurant:
That is impressive as this is a beautiful place, and I love it too. Tell me, how frequent do you visit restaurants?
Interviewee I:
I am what one would call a regular visitor, and I have been to many restaurants in town. I like good food, and we go for dates in them with my fiancée too. Sometimes we only visit restaurants to have a meal or takeaways. I have also attended seminars in some of them.
The Deli Meal Restaurant:
I am impressed to know that this has been your town since your childhood and that you like and visit restaurants. Speaking of which, do you have a favorite one?
Interviewee I:
I have visited several joints around the Bronx, and they offer unique experiences, which make them attractive in different ways. However, if I must choose then my best rating would go to Silhouette Restaurant & Lounge. This restaurant is beautiful and decorated with state-of-art furniture and cools lighting, which explains why we have used it for two dates with my fiancée. Most importantly, it provides a range of delicious meals at an affordable price. The place’s customer service is only a second to a few restaurants around the United States.
The Deli Meal Restaurant:
Thank you for the explanation. The Bronx has several food franchises, and the New York City is a hub of them. Do you think that a new food joint can succeed in this town? Kindly, explain your response.
Interviewee I:
Absolutely, and there is always room for one more. The Bronx has many restaurants, but the market is large and can sustain a few more joints. Besides, the new entrant would even outdo some of the existing joints if it is highly competitive. The restaurants in the Bronx do not provide all the meals in the world and most of them specialize in providing specific dishes, so any joint selling a variety of dishes would have a high chance of becoming a success. In particular, most of the restaurants in the town specialize in Italian cuisine, meaning that a franchise providing other dishes is likely to challenge them.
The Deli Meal Restaurant:
Your assessment of the situation is excellent, and I appreciate it. I also think that it describes the profile of The Deli Meal Restaurant – the new entrant that will launch in less than one month from now. It will provide Italian dishes because the market is accustomed to them, but it will focus on offering a variety of foods and drinks so everyone can have any meal or drink of their choice. Are there similar restaurants in the Bronx?
Interviewee I:
Some restaurants use that approach, but I believe that the people would still welcome a new restaurant.
The Deli Meal Restaurant:
That is a kind response. Would you become our esteemed customer when the restaurant opens?
Interviewee I:
Visiting The Deli Meal Café will feature in my diary, and I would like it if you tell me the exact date of the opening so I can become one of the first customers, just as I am the first interviewee. I know my fiancée will also like the idea.
The Deli Meal Restaurant:
We will are looking to service you and your boyfriend, among other people you may invite to the Deli Meal Restaurant. I am happy for you, Grace, and thank you for your time.
The Second Interviewee
The Deli Meal Restaurant:
Hello! I am Jean Derek from The Deli Meal Restaurant How are you?
Interviewee II:
I am doing great, Derek. Thank you for asking!
The Deli Meal Restaurant:
What is your name? How long have you lived in the Bronx?
Interviewee II:
My name is Maggie Lohan Johnson. I moved to the Bronx 4 years ago when got married to my husband, Harris Johnson, but I visited on several occasions before that.
The Deli Meal Restaurant:
That is impressive, and I believe that the Bronx is a beautiful place. Tell me, how frequent do you visit restaurants?
Interviewee II:
I go to a few restaurants for lunch, especially those close to my workplace. We also visit some of them for family outs and dates occasionally.
The Deli Meal Restaurant:
I think the Bronx is now your hometown. Do you have any favorite restaurant?
Interviewee II:
The Bronx has a range of beautiful food premises that captivate their clients in more than way. Nonetheless, I still think that Crosstown Diner is a notch higher all the restaurants I have visited in this town. This restaurant is beautiful and has high-end decorations. I like its meals, the homemade chicken chili being my best.
The Deli Meal Restaurant:
Thank you for the explanation. The Bronx has several food franchises, and the New York City is a hub of them. Do you think that a new food joint can succeed in this town? Kindly, explain your response.
Interviewee II:
The Bronx has many restaurants, but I believe it still needs more. Most of the food joints are concentrated in particular places, with most of them close to the food markets. My belief is that there is a market for food joints here too and that many of them restaurants around lacking a variety of foods. If a new premise that can fill that gap comes in then, the people will go for it.
The Deli Meal Restaurant:
Your assessment of the situation is excellent, and I appreciate it. I also think that it is the same goal that The Deli Meal Restaurant has. It will launch in less than one month from now. We understand that most clients from the Bronx like Italian dishes so we will provide them, alongside a variety of other foods and drinks so everyone can have any meal or drink of their choice. Are there similar restaurants in the Bronx?
Interviewee II:
Yes, a few restaurants engage in providing a variety of foods, and Crosstown Diner is one of them. Although a new entrant (The Deli Meal Restaurant) is likely to face competition, it will still thrive if it captivates the customers.
The Deli Meal Restaurant:
That is a kind response. Would you become our esteemed customer when the restaurant opens?
Interviewee II:
My Participation in this interview should become my ticket to visiting the Deli Meal Restaurant when it opens. I will be there to see what you bring to the table, new meals, quality services, beautiful furniture and scenery, wine, and music, among other things. I am excited already.
The Deli Meal Restaurant:
We will be obliged to serve you and give a memorable experience. Thank you for your time, Maggie.
Third Interviewee
The Deli Meal Restaurant:
Hello! I am Jean Derek from The Deli Meal Restaurant How are you?
Interviewee III:
I am okay, Derek. Thank you for asking.
The Deli Meal Restaurant:
What is your name? How long have you lived in the Bronx?
Interviewee III:
My name is Nick Bruno, and I have lived in this town for four months. I moved here to work, and I am looking forward to living here for many years.
The Deli Meal Restaurant:
Four months are not much, but you must have learned something about restaurants in that time, right? Have you used any of the food joints in town?
Interviewee III:
I am a regular user of restaurants as I spend most of my day working in town, and I live alone, so I do not do much cooking at home.
The Deli Meal Restaurant:
I am impressed to know that the Bronx is new your new home and that you like and visit restaurants. Speaking of which, do you have a favorite one?
Interviewee III:
Pizza Express is my favorite restaurant, and I love it for both pizza and other delicacies it provides.
The Deli Meal Restaurant:
Thank you for the explanation. The Bronx has several food franchises, and the New York City is a hub of them. Do you think that a new food joint can succeed in this town? Kindly, explain your response.
Interviewee III:
I have not lived long enough to the town, but I believe that the people would like a new restaurant, especially one that provides a variety of foods. Many of the existing ones specialize in Italian dishes.
The Deli Meal Restaurant:
Your assessment of the situation is excellent, and I appreciate it. I also think that The Deli Meal Restaurant should develop a profile that befits that description. It will provide Italian dishes because the market is accustomed to them, but it will focus on offering a variety of foods and drinks so everyone can have any meal or drink of their choice. Are there similar restaurants in the Bronx?
Interviewee III:
Not all restaurants focus on selling Italian dishes, but there is still room for more.
The Deli Meal Restaurant:
That is a kind response. Would you become our esteemed customer when the restaurant opens?
Interviewee III:
Visiting The Deli Meal Restaurant will be a no brainer because I have participated in the interview about its launch. If it has delicious foods and drinks, then it could be my new favorite restaurant.
The Deli Meal Restaurant:
That idea is impressive, and The Deli Meal Restaurant would like to serve as many times as you visit. Invite other people to visit the place too. It was a pleasure interviewing you and thank you for agreeing to participate in the interview.
An intensive review of the above interviewees reveals that The Deli Meal Restaurant will thrive in the Bronx. Just as the three respondents stated, the people of this town will welcome a new food joint, meaning that the Bronx has a ready market for the restaurant when it opens. However, it will have to fend off the competition from the other premises already established in town. Restaurants such as F&J Pine Tavern, Havana Café, and Johnny’s Reef are the leading forces to reckon with in the Bronx, and The Deli Meal Restaurant will have to oust them to become the best premise in the town. Other restaurants that are likely to pose a similar threat are John & Joe’s Pizzeria, La Brisas Restaurant, and Crosstown Dine CITATION Tri16 l 1033 (Trip, 2016).
Economic and Industry Evaluation
With the largest distribution center for food in the world, a large market base and an expanding chain of food incubators as well as programs for funding, space, and training; the New York City’s food retail, distribution, and manufacturing industry is a crucial feature of the economy of the New York City. With the latest (September 2016) Restaurant Performance Index surpassing the expectations (101.0 against 100.6), restaurants make a significant contribution to the New York City’s economy, and its growth is likely to improve the economic development of the city CITATION Nat16 l 1033 (National Restaurant Association, 2016).
Legal, Regulatory, and Political Analysis
Although I will operate as a sole proprietorship, I will still consider acquiring a legal form to protect myself from personal liabilities. For that reason, The Deli Meal Restaurant will operate as a limited liability company until it grows into a corporation. Restaurants are different from other businesses that specialize in the provision of services, such as consulting or professional offices, in many ways. For example, they have many customers visiting them many times a day and a significant number of employees engaging in many activities physical activities, which increases the likeliness of damages and injuries at the workplace. Since a person could be injured or property damaged on the premise, I would want that the business, and not myself, becomes responsible for such a liability. For that reason, I will have to use the following sets of legal procedures to protect both myself and the business.
Permits and Licenses
The Department of Health of the New York City requires that all establishments providing food services should acquire and display a business permit from a recognized local health authority. The appropriate people to provide such services are either health officers or health commissioners from the large city of county. Just as the law requires, I will send the permit application at least three weeks (21 days) before the opening of The Deli Meal Restaurant. The validation of the license is two years, meaning that the business will have to send renewal application in every two years to stay operational and avoid fines from the legal authorities.
Although the other city- and state-issued permits are also necessary, they will have to wait till the Restaurant opens as they only depend on the kind of services the Café will be providing. The New York State has an extensive online platform called the OPAL (Online Permit Assistance and Licensing) that has a set of questions about the details (operations) of the restaurant. Some of the items available on the OPAL include; how many employees will the business have? Will the restaurant sell beers or any other alcoholic drink? Depending on how I answer these questions, the OPAL will provide me with the relevant information about the necessary licenses and permits that I will have to apply for the business.
Besides the license for food service establishment, some of the licenses and grants I am likely to acquire for the firm include, the certificate of authority to collect tax from sales, license for restaurants selling wines, registration for alcohol dealers, and license for the sale of liquor in the premise. In New York, the licensing for liquor is the responsibility of the Division of State Liquor Authority, which also controls the sale of alcoholic beverages. It has an online website where those need more information about liquor licensing ca visit. I will have to visit to get relevant information about licenses for restaurant wine, club liquor, and eating place beer. Visiting the Division of State Liquor Authority’s website, coupled with seeking assistance outside the legal systems, is crucial to understanding the complicated nature of the procedure for acquiring liquor licensing.
Supposedly, The Deli Meal Restaurant will be dealing with a huge number of customers on a daily basis; the employees will have problems controlling large crowds. Therefore, I will have to obtain a permit or a license from both the police and fire departments to help the employees deal with clients in the future. Moreover, I will also have to get a license or permit from a local department of building concerning the appropriate number of exits the restaurant should have as well as other emergency issues. The Restaurant Association of New York State holds that a restaurant should have appropriate permits and signs, including the right places for display. Some of the permits and signs it should have included the letter grade of the department of health, regulations for commercial recycling, state and federal labor notices, choking poster, wash hands signs, and exit signs.
Safety and Health
Restaurants must observe the regulations about health and safety of food consumption because they deal with people eating food. In New York, the Department of Health provides a range of regulations for the establishment of food services. Some of the matters covered in them include:
The issues of employee cleanliness, such as handwashing
The issues of employee health, such as barring the employee from working if he/she have a particular illness
Thawing and reheating food
Washing of vegetables and fruits
Sanitizing and cleaning utensils
Constructing utensils and other equipment
Plumbing, sewage, and water supply
Storage and disposal of garbage
Ventilation
Construction of ceilings, walls, and floors
The Department of Health also has a set of guidelines on how one can ensure that he/she meets the regulatory requirements for the above codes of conduct.
Besides abiding by the regulations of food service establishments, the restaurant will also experience routine visits from the local health department to monitor its operations. The local inspectors can target a range of things, with the health inspections involving almost all the sectors of the restaurant. A review of the Department of Health’s regulations reveal that the inspection exercise may cover prepared and raw food, refrigeration systems, waste disposal, and cooking equipment, among other factors. Moreover, the Department of Health also requires that the restaurant has to display the latest inspection grade. In some cases, the local health officers publish the same results on the state’s, city’s or county’s official website. Besides state and city regulations about the safety and health of the restaurant employees and food served, The Deli Meal Restaurant will also have to abide by the federal OSHA (Health Administration and Occupational Safety). It provides rules about face and eye protection, the surfaces for walking when working, and hand protection.
Insurance
Operating a restaurant relates to particular risks such as employees or getting accidentally falling on the floor, someone getting injured by broken glass of hot liquid, or a customer getting ill from eating the food served at the restaurant. Other generic risks facing the business include theft and fire, among other factors that can cause personal injury or property damage. Therefore, I have to buy insurance cover the restaurant against such occurrences. It is advisable to hire the services of an insurance agency with adept knowledge in formulating policies for restaurants. I will also ensure all the properties of The Deli Meal Restaurant, including the utensil equipment are insured, and acquire a comprehensive policy of general liability to cover all the injuries that the people can encounter at the premise. In particular, it will include both the employees and some customers such as those who become seriously ill from eating at the restaurant. The Deli Meal Restaurant will also acquire proper vehicle insurance to cater for the occasional outside catering.
Franchising
Since The Deli Meal Restaurant will be a franchise, it is likely to face more restriction than the independent restaurants. For example, it will operate under a franchise contract, which not only favors the franchisor but also give him the rights to the following factors:
Deciding the location for the other competing restaurants
Blocking the sales of the franchise to the selected prospective buyer
Determining the geographic location for resolving the disputes
Requiring the franchise the buy all the services and goods from the franchisor
Besides the restrictions that come with the franchise contract, I am likely to incur extra financial costs to establish the business. For example, I will have to give a significant portion of the restaurant’s profits to the franchisor in exchange for getting the plan of the preexisting business, seeking any help when operating the new restaurant, or getting some benefits from group marketing. Apart from the hefty sum of the franchise fee, the new business will also have to make the following payments:
A portion of the restaurant’s profits as royalty fee
Above-market costs for supplies, goods, and equipment bought from the franchisor
Training costs for then new business owner and employees
Fund contributions for group advertising
Finance charges on the purchases
The Deli Meal Restaurant is a food franchise meaning that it will have to face the franchising mentioned above restrictions. However, it is a branch of my other food joints, so the new Deli Meal Restaurant will not have to abide by harsh restrictions of franchising. For example, it will not have to give away part of its profits as it only has to direct the to the group’s account for the overall financial standing.
Cultural/Social Analysis
The Bronx has a large population of Italians and those who love Italian cuisine. For that reason, The Deli Meal Restaurant will prepare and sell Italian dishes. However, the town has other residents who do not belong to the Italian culture, and not all those who visit the city may fancy the Italian cuisine. In fact, even the Italians in Bronx and lovers of their foods often crave other dishes. For that reason, The Deli Meal Restaurant will provide a range of dishes that will make it a one-stop destination for anyone who needs good food in the Bronx.
Technological Analysis
Restaurant Technology plays an integral role in the overall performance of any premises uses them. For that reason, The Deli Meal Restaurant will incorporate a range of technologies to improve the guest experience. For example, it will create an online website where clients can place orders, inquire information about the restaurant’s operations. It will also incorporate mobile payment methods such as Samsung Pay, Level Up, and Apple Pay, as well as issue digital receipts. The servers will also use handheld tablets to handle the guest needs.
Strategic Plan
Competitive Advantage
It is inevitable that the other restaurants will compete with The Deli Meal Restaurant for customers and market share, among other factors that reshape the operations and performance of any business entity. For that reason, the restaurant will utilize its resources to gain a competitive advantage over the food joints in the Bronx. Some of the factors that will give the restaurant the edge of the others include the provision of a diverse set of foods and drinks, state-of-art technologies that improve the guest experience, highly-skilled managers and employees, and unbeatable prices of foods. Since almost all the restaurants in the Bronx do not provide outside catering, The Deli Meal Restaurant would also consider it to give customers a different experience.
Overall Market Attractiveness
The people of Bronx are accustomed to having Italian cuisine in almost every restaurant they visit. For that reason, it is imperative that The Deli Meal Restaurant provides similar meals to have the local customers visit the place. However, attracting customers will have to go beyond just using the locals’ favorite dishes. In particular, the premise should also concentrate on its public aestheticism to entice the customers to visit it. For example, it will use high-end structural setup, well-furnished furniture, and beautiful lighting to attract customers. In addition to that, The Deli Meal Restaurant will also provide set up the perfect structure for outside catering to enable customers has meals outside the promise.
The Company’s Business Plan
Objectives
The Deli Meal Restaurant’s business operations will involve the following targets. It has the following objectives:
Becoming one of the best restaurants in the Bronx
Providing a broad range of delicious dishes at affordable prices
Expanding its operations beyond the Bronx
Improving its business operations and sales on a seasonal basis
Customer Response Model
The Deli Meal Restaurant reckons that the success of any business depends on its relationship with the customers as they play an integral in almost all the operations of the business. Since the restaurant understand that tapping information from customers helps the management make informed decisions, it will improvise a comprehensive customer response model to get in touch with the clients. The Deli Meal Restaurant will have an official website through which customers can use to message it any time of the day. Other company contacts include an email address and a phone number. It will also have several mailboxes that customers will use to post suggestions and complaints about the services, meals or any other aspect of their experience at the premise. In exchange, The Deli Meal Restaurant will respond to them as soon as possible to the satisfaction of the customers.
Business Strengths
Despite being a new business, The Deli Meal Restaurant has a range of strengths which will enable it to attract customers, have a competitive advantage over the other restaurants, expand its ventures, improve its sales, and manage other activities. Some of The Deli Meal Restaurant’s strengths include:
Provision of a diverse set of foods and drinks,
Use of state-of-art technologies that improve guest experience,
A team highly-skilled managers and employees
Unbeatable prices of foods
Provision of outside catering
Business Weaknesses
Just like any other company, The Deli Meal Restaurant also has a set of weaknesses that, if not handled, will hamper its overall performance. Some of them include:
Starting a new business in a location comes with several challenges such as lack of adequate market knowledge
Finding suppliers might also prove a challenge
Market segmentation
Although the New York City has a large customer base (market), The Deli Meal Restaurant will focus on the Bronx as the town has a ready local market. Since I had interviewed the three potential customers from the same place, the restaurant is likely to find more customers from the Bronx, especially if the interviewees announce its launch to others. With time, The Deli Meal Restaurant can move other locations within the city or even outside it.
The marketing mix
Understanding the marketing mix of The Deli Meal Restaurant requires one to focus on the 4Ps that will encompass its overall operations. They include promotion, place, product, and price. In the case of the latter, The Deli Meal Restaurant will strive to offer unbeatable prices for its goods and services. With this approach, it lures customers as well as stays competitive in the market. The product, in this context, refers to the goods the restaurant will sell, such as foods and drinks. On the other hand, the place is the point of exchange (sale). Here, the place is The Deli Meal Restaurant as it is the point where customers pay money for meals and drinks served to them. The last P in the marketing mix is promotion, which covers the business efforts to advertise itself to the customers CITATION ECo10 l 1033 (Constantinides, 2010).
Management Team
The Deli Meal Restaurant will operate under the leadership of three managers – Thorne Stevens, Gary Harvey, and Tori Jameson. They are alumni of McDonald’s, Crosstown Dinner, and John & Joe Pizzeria. Having worked at the McDonalds as an employee and manager for 21 years, Thorne’s expertise in running a restaurant could only become second to a few leaders in the entire America’s food industry. Harvey and Tori have served Crosstown Dinner, and John & Joe Pizzeria at the management level for eight years and 11 years, respectively. My belief is that they have the experience and prowess in handling operations of the new Franchise.
Financial budget
The overall budget allocated for all the activities, equipment, bills, and other costs incurred in starting up the business is $200,000. Since The Deli Meal Restaurant is a new franchise in a new town, it needs to pay much attention towards advertisement. For that reason, the management will spend $12,000 on a campaign for magazine adverts to cover the costs of acquiring the suggested magazine, the cost of each ad, and the timetable for the placements of the ad. The restaurant will buy well-furnished furniture, which cost a hefty sum of money. For that reason, the management will allocate $33,000 for it. Designing, architectural constructions, and decorations of both interior and external features of the restaurant will cost about $52,000. Unless The Deli Meal Restaurant acquires the relevant licenses and permits, it cannot operate so that it will allocate $7.500 for them. $26,000 will cover the remuneration costs, with about $34,000 catering for any other expenses. Finally, the balance will handle emergency cases such as underestimation or any other unexpected costs.
Below is a table of how the management will utilize the money in establishing the restaurant.
Activity Estimated Cost
Magazine Advertising $12,000
Furniture $33,000
Building, Designing, and decorations $52,000
Licenses and Permits $7.500
Personnel $26,000
Other Costs $34,000
Sales Forecast
Method of Determination
If everything goes to plan so that all the expenses fall within the allocated funds, the establishment of The Deli Meal Restaurant will cost about $164,500. Assuming that other unexpected expenses arise, the costs could go up to about $180,000. The business expects to make profits of about $40,000 to $50,000 within the first year of business, which case it will earn $204,500 to $230,000 in sales. My belief is that the restaurant will not have a significant market share due to lack of sufficient information about it, competition, and the reluctance of customers to buy from a new business. For that reason, it will not make many sales. Expectedly, The Deli Meal Restaurant will make more sales than the first year, and it will also spend less money on similar expenses. For example, it will spend $3,000 on magazine advert; $10,000 on furniture; $20,000 on building, designing and decorations; $2,500 on licenses and permits; $28,000 on personnel; and $35,000 on other costs. In this case, the business will spend $98,500. Since it expects to make $60,000 to $70,000 in profits, it will earn about $158,500 to $168,500.
Expenditure and Business Objectives
Not only does expenses help the management establish the business, but also attain its goals. In the cases of the latter, they help that the management to cater carry out the operations that enable the business to earn profits as well as handle all the other errands of the company. For example, advertising, decorating, buying furniture, remunerating personnel, among other expenses, will make The Deli Meal Restaurant operational, during which it will make revenues required for running the business. It is through this approach that the expenditures aid the management in achieving the objectives of the business.
Financial Statement
YEAR 1
REVENUES
Food $21,000
Drinks $17,000
Hospitality $5,500
Services $6,500
TOTAL$50,000
EXPENSES
Magazine Advertising $12,000
Furniture $33,000
Building, Designing and decorations $52,000
Licenses and Permits $7.500
Personnel$26,000
Other Expenses $34,000
TOTAL $164,500
YEAR 2
REVENUE
Food $25,000
Drinks $19,000
Hospitality $10,000
Services $16,000
TOTAL$70,000
EXPENSES
Magazine Advertising $3,000
Furniture $10,000
Building, Designing and decorations $20,000
Licenses and Permits $2,500
Personnel$28,000
Other Expenses $35,000
TOTAL$98,500
Pro Forma
Year 1
Expenditures = $12,000 + $33,000 + $52,000 + $26,000 + $34,000
= $164,500
Revenues = $21,000 + $17,000 + $5,500 + $6,500
= $50,000
Sales = Expenditures + Revenues
= $164,500 + $50,000
= $214,500
Year 2
Expenditures = $3,000 + $10,000 + $20,000 + $2,500 + $28,000 + $35,000
= $98,500
Revenues = $25,000 + $10,000 + $16,000 + $19,000
= $70,000
Sales = Expenditures + Revenues
= $98,500 + $70,000
= $168,500
Performance Timeline
Just as the above financial budget shows, Deli Meal Restaurant has a two-year timeline that the management will use to measure its performance. The Restaurant is considered to have performed only if it earns a profit of $40,000 to $50,000 in the first year and $60,000 to $70,000 in the second year. For that reason, profits will become the metrics used to evaluate its performance. Deli Meal Restaurant has the responsibility to meet the market demands as well as achieve its objectives.
Appendices
Sales Data
Sales Y1: $214,500 ($40,000 to $50,000 profits)
Sales Y2: $168,500 ($60,000 to $70,000 profits)
Competitor Analysis
F&J Pine Tavern, Havana Café, and Johnny’s Reef are the leading forces to reckon with in the Bronx, and The Deli Meal Restaurant will have to oust them to become the best premise in the town. Other restaurants that are likely to pose similar threat are John & Joe’s Pizzeria, La Brisas Restaurant, and Crosstown Dine
Competitive Advantage
Some of the factors that will give Deli Meal Restaurant the edge over other competitors include:
Provision of a diverse set of foods and drinks,
Use of state-of-art technologies that improve guest experience,
A team highly-skilled managers and employees
Unbeatable prices of foods
Provision of outside catering
Response Model
The Deli Meal Restaurant will have an official website through which customers can use to message it any time of the day. Other company contacts include an email address and a phone number. It will also have several mailboxes that customers will use to post suggestions and complaints about the services, meals or any other aspect of their experience at the premise. In exchange, The Deli Meal Restaurant will respond to them as soon as possible to the satisfaction of the customers.
Financial Data
The Deli Meal Restaurant plans to start the business with a budget of $200,000. It projects a profit of $40,000 to $50,000 in the first year and $60,000 to $70,000 in the second.
Profit Planning
Part of the profit will be used to improve the growth of the business while others will be deposited to its account.
Customer Retention
The Deli Meal Restaurant will strive to meet all the needs to of the customers, respond to their complaints, and entice them through offers and discounts.
Secondary Data
The paper used a scholarly data and reputable websites
Summary of the Interview
Interviewee I
Grace believes that there is room for a new entrant, but it should provide diversity.
Interviewee II
Maggie believes that the Bronx has a large customer base, which a new business would enjoy.
Interviewee III
Nick, just like Grace, feels that the new entrant must provide a range of foods.
Conclusion
To many people, starting up a business is as simple as having the ready cash to do it. However, that notion is not a reflection of the reality that money alone does not guarantee the success of the business. Investments require preparations, which mean the business owners must focus on more than one thing at the same time. Outlined in this paper was a detailed review of how Deli Meal Restaurant can be established and run in Bronx, New York City. Just as this business plan outlined, starting up a business must include interviews of the potential customers, a study of the market, and review of the existing businesses, especially those that are likely to compete for the new business for customers and market share, among other factors that are likely to affect its operations. While this plan focused on Deli Meal Restaurant, it is a blueprint to many people who plans to start up a new enterprise.
References
BIBLIOGRAPHY l 1033 Constantinides, E. (2010). The Marketing Mix Revisited: Towards the 21st Century Marketing. Journal of Marketing Management, 407-438.
National Restaurant Association. (2016). Restaurant Performance Index. Retrieved from National Restaurant Association: http://www.restaurant.org/Downloads/PDFs/News-Research/index/RPI-Sep2016.pdf
NYCEDC. (2016). New York City is home to a thriving food manufacturing, distribution and retail industry. Retrieved from NYCEDC: http://www.nycedc.com/industry/food-manufacturing-retail
Trip. (2016). Bronx Restaurants. Retrieved from Trip: https://www.trip.com/bronx-ny/restaurants