Restaurant - Shuddha Swaad, organic food restaurant

Shuddha Swaad
Executive summary
1.1 Objectives
1.2 Mission
2.0 Company Summary
3.0 Services
4.0 Market Analysis Summary
5.0 Strategy and Implementation Summary
6.0 Management Summary
7.0 Financial Plan

Executive Summary
Shuddha Swaad is a new medium-sized restaurant located in a Mumbai Suburbs.
Shuddha Swaad's emphasis will be on organic and Indian ethnic food. An emphasis
on organic ingredients is based on Shuddha Swaad's dedication to sustainable
development. Additionally, the restaurant employs its staff from the villages and
trains them.

Services
Shuddha Swaad offers a trendy, fun place to have great food in a social
environment. The restaurant offers a large repertoire of ethnic ingredients and
recipes from across the states. Ethnic recipes will be used to provide the customers
with a diverse, unusual menu. The emphasis is on re-introducing the local healthy
options to the city life. Being organic, is just another value addition to it.

Customers
With the growth trend towards ‘specialty restaurant’ Shuddha Swaad believes that it
has a strong market. Its main target audience will be rich hippies who naturally
desire organic foods as well as ethnic cuisine, estimated to be at 10,00,000 in
numbers. The second group that will be targeted is young nuclear families with
double income, which are growing at an annual rate of 12% with 450,000 potential
customers. The last group which is particularly interested in the menu's healthy
offerings is dieting women which number 350,000.

Management
Shuddha Swaad has assembled a strong management team. Anitha Desai will be the
general manager. Anitha has extensive management experience of organizations
ranging from six to 45 people. Priyank Jain will be responsible for all of the finance
and accounting functions. Priyank has seven years experience as a CPA. JLastly,
Shuddha Swaad has chefs Annapoorna Devi and Durgaprasad Rao who will be
responsible for the back-end production of the venture. Collectively they have over
37 years of experience.

The market and financial analyses indicate that with a start-up expenditure of
$141,000, Shuddha Swaad can generate $350,000 in sales by year one, $500,000
in sales by the end of year two and produce net profits of 7.5% on sales by the end
of year three. Profitability will be reached by year two.
Objectives
1. Sales of $350K the first year, more than half a million the second.
2. Personnel costs less than $300K the first year, less than $400K the second
year.
3. Profitable in year two, better than 7.5% profits on sales by year three.

Mission
Shuddha Swaad is a trendy and healthy place to eat, combining an intriguing
atmosphere with excellent, interesting food that is also very good for the people who
eat there. A rewarding place for employees, which is reflected in their service
delivery.

Company Summary
Shuddha Swaad is a single-unit, medium-sized restaurant. We focus on organic and
creative food. The restaurant will be located in Mumbai. Most important to us is our
financial financial success, but we believe this will be achieved by offering high-quality
service and extremely clean, non-greasy food with interesting twists.

Company Ownership
The restaurant will start out as a simple sole proprietorship, owned by its founders.

Start-up Summary
The founders of the company are Rajesh Chavan and partner Harshad Mane.
Harshad focuses on the financial issues and Rajesh on the personnel issues. Rajesh
earned his business major degree from the IIPM. We have found the location and secured
the lease for $2,000 per month. We will be able to set up shop in time to begin turning back
a profit by the end of month eleven and be profitable in the second year. The place is
already equipped as a restaurant so we plan to come up with a total of `.40,000 in capital,
plus a `.100,000 SBI guaranteed loan, to start up the company.
Start-up
Requirements
Start-up Expenses
Legal `1,000
Stationery etc. `1,000
Other `1,000
Total Start-up Expensesrs. `3,000

Start-up Assets Needed

Cash Balance on Starting Date `88,000
Other Current Assets `50,000
Total Current Assets `138000
Long-term Assets `0
Total Assets `138,000
Total Requirements `141,000
Funding
Investment
Investor 1 `25,0000
Investor 2 `15,0000
Total Investment `40,000
Current Liabilities
Accounts Payable `1,000
Current Borrowing `0
Other Current Liabilities `0
Current Liabilities `1,000
Long-term Liabilities `100,000
Total Liabilities `101,000
Loss at Start-up (`3,000)
Total Capital `37,000
Total Capital and Liabilities `138,0000

Services
The Menu
The menu is going to be extremely simple but changing every day. We will keep a
small group of constants on the menu and then feature a chef's recommendation
that we plan to have 85% of meals ordering. This will help us to reduce waste and
plan ingredients and purchasing.

Organic Ingredients
The organic ingredient element will allow us to price to the extremely wealthy
Internet entrepreneurs who are looking to spend an exorbitant amount of money to
have peace of mind that their money is still coming back to themselves. We will be
extremely ecologically conscious as well, and spread this across our literature.
Ethnic Ingredients and Recipes

Our chef will have great latitude in designing and producing menu offerings from
many different Indian cultures. We will endeavor to procure all the traditional,
authentic ingredients necessary to hold true to these varied and interesting cultural
recipes.

Market Segmentation

The Rich Trend setters:

Organic is becoming a way of life for this target segment. Rich lads, who naturally
desire organic foods as well as ethnic cuisine, estimated to be at 10,00,000 in
numbers. They are an easy target to attract for the trials. To hold them and make them
repeat customers is the key.

Nuclear families:
Working couples are usually more interested in trying out places which are trendy
and healthy at the same time. They have double income and it is particularly easy to
make them spend money again - they spend the most on drinks, appetizers and tips.
Diet conscious women segment:
Last group which is particularly interested in the menu's healthy offerings is dieting
women which number 350,000. The organic food menu will always have a line of
extremely delicious very low-fat meals.

Market Analysis
Strategy and Implementation Summary
Our strategy is simple, we intend to succeed by giving people a combination of
great,healthy, interesting food, and an environment that attracts "trendy" people
like a magnet. Implementation isn't simple, but that's in the doing of it, not in the
plan.

Competitive Edge
Our competitive edge is the menu, the chef, the environment, and the tie-in to
what's healthy and trendy.

Sales Strategy
As the table shows, we intend to deliver sales of about $350K in the first year, and
to double that by the third year of the plan.

Sales Forecast 2008 2009 2010

Unit Sales
Meals 22822 35000 45000
Drinks 11415 17500 22500
Other 240 500 1000
Total Unit Sales 34,477
53000 68500

Unit Price 2008 2009 2010

Meals 60 70 70
Drinks 20 20 20
Others 30 30 30

Sales
Meals 342330 525000 675000
Drinks 22830 5000 45000
Others 2400 5000 45000
Total Sales 367560 565000 730000
 Direct unit 2008 2009 2010
cost
Meals 20 20 20
Drinks 10.50 10.50 10.50
Others 10 10 10

Direct cost of 2008 2009 2010

sales
Meals 45644 70000 90000
Drinks 5708 6750 11250
Others 240 500 1000
Subtotal 51952 79250 102250
direct cost of
sales

Management Summary
We has great experience managing personnel and we are quite confident of his
ability to find the best staff possible. Our chef, Annapoorna and Durgaprasad, is
already on board and has a published cookbook that will add prestige to the
restaurant immediately. We will be looking to find a young, ultra-hip staff to make
sure we add the edge that makes Shuddha Swaad so trendy.

Personnel Plan
As the personnel plan shows, we expect to invest in a good team, fairly
compensated. We think the planned staff is in good proportion to the size of the
restaurant and projected revenues.

Personal plan 2008 2009 2010

Manager 60000 65000 70000
Hostess 42000 45000 50000
Chef 54000 60000 65000
Cleaning 30000 35000 40000
Waiter 72000 100000 130000
Other 24000 52000 55000
Total people 6 10 12
Total payroll 282000 357000 410000

Financial Plan
We expect to raise rs.30,000 of our own capital, and to borrow $100,000 guaranteed
by the SBA as a 10-year loan. This provides the bulk of the start-up financing
required.

Break-even Analysis
Our break-even analysis is based on the average of the first-year numbers for total
sales by meal served, total cost of sales, and all operating expenses. These are
presented as per-unit revenue, per-unit cost, and fixed costs. We realize that this is
not really the same as fixed cost, but these conservative assumptions make for a
better estimate of real risk.

Break-even Analysis
Monthly unit break even 14028
Monthly revenue break even 146453
Assumptions
Average per unit revenue 10.44
Average per unit variable cost 8.34
Estimated monthly fixed cost 29459

Projected Profit and Loss

As the profit and loss table shows, we expect to become barely profitable in the
second year of business, and to make an acceptable profit in the third year.

Pro forma profit 2008 2009 2010

and loss
Sales 367560 565000 730000
Direct cost of 51592 79250 102250
sales
other 0 0 0
Total sales cost 51592 79250 102250
Gross margin% 85.96 85.97 85.99
Expenses
Payroll 282000 357000 410000
Sales & 27000 35000 72122
marketing and
other expenses
Depreciation 1000 1050 1103
Utilities 1200 1250 1323
Other 0 0 0

Total operating 353500 448690 545047

expenses
PBIT 37532 37050 81703
Interest 10000 9500 8250
expenses
Taxes incurred 0 6890 18669
 Net profit/sales -12.93% 3.66% 7.50%

Projected Cash Flow

The cash flow projection shows that starting cost and provisions for ongoing
expenses are adequate to meet our needs until the business itself generates its own
cash flow sufficient to support operations.

Projected cash 2008 2009 2010

flow
Cash received
Cash received
from operation
Cash sales 367560 565000 730000
Cash from 0 0 0
receivables
Subtotal from 367560 565000 730000
operation
Additional cash
received
Sales tax, VAT/ 0 0 0
HST/ GST
New current 0 0 0
borrowing
New other 0 0 0
liabilities
New long term 0 0 0
liabilities
Sales of other 0 0 0
current asset
New investment 0 0 0
received
Subtotal cash 367560 565000 730000
received
Additional cash
spent
Sales TAX/ VAT/ 0 0 0
HST/ GST paid
out
Principal 0 0 0
payment of
current
borrowing
Long term 0 10000 15000
liabilities
Subtotal cash 404797 548357 681137
spent

Net cash flow 372370 156430 488630

Cash balance 507530 674050 1162687

Projected 2008 2009 2010

balance sheet
Assets
Current asset
cash 50763 67405 116268
Other current 50000 50000 50000
asset
Long term asset 0 0 0
Accumulated 1000 1000 1000
depreciation
Total long term 1000 1000 1000
asset
Liabilities &
capital
Current liabilities 1000 2050 3153
Account payable 10294 15217 23194
Current 0 0 0
borrowing
Other current 0 0 0
liabilities
Subtotal current 10294 105217 98194
liabilities
Paid in capital 40000 40000 40000
Retained earning 3000 50532 29862
Earnings 47532 20560 54780
Total liabilities & 99763 115355 163115
capital

Net worth 10532 10139 64922