Http Www.indiadevelopmentgateway.org Files Sample Business Plan March 07

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SampleBusinessPlan:

Restaurant-Shuddha

Swaad,organicfoodrestaurant

ShuddhaSwaad

Executivesummary

1.1Objectives1.2Mission2.0CompanySummary3.0Services4.0Market

AnalysisSummary5.0StrategyandImplementationSummary6.0ManagementSummary7.0Financial

Plan



ExecutiveSummary

ShuddhaSwaad

isanewmedium-sizedrestaurantlocatedinaMumbaiSuburbs.ShuddhaSwaad's

emphasiswillbeonorganicandIndianethnicfood.Anemphasisonorganic

ingredientsisbasedonShuddhaSwaad'sdedicationtosustainabledevelopment.Additionally,therestaurantemploysitsstafffromthevillagesandtrainsthem.

Services

Shuddha



Swaadoffersatrendy,funplaceto

havegreatfoodinasocialenvironment.Therestaurantoffersalarge

repertoireofethnicingredientsandrecipesfromacrossthestates.Ethnicrecipeswill

beusedtoprovidethecustomerswithadiverse,unusualmenu.Theemphasisisonre-introducingthelocalhealthyoptionstothecitylife.Being

organic,isjust



anothervalueadditiontoit.

Customers

Withthegrowthtrendtowardsspecialtyrestaurant ShuddhaSwaad

believesthatithasastrongmarket.Itsmaintargetaudiencewillbe

richhippieswhonaturallydesireorganicfoodsaswellasethniccuisine,estimatedtobeat10,00,000innumbers.Thesecondgroupthatwillbe

targetedisyoung



nuclearfamilieswithdoubleincome,whichare

growingatanannualrateof12%with450,000potentialcustomers.The

lastgroupwhichisparticularlyinterestedinthemenu'shealthyofferingsisdieting

womenwhichnumber350,000.

Management

ShuddhaSwaadhasassembledastrongmanagementteam.AnithaDesaiwillbethegeneralmanager.Anitha

hasextensivemanagement



experienceoforganizationsrangingfromsixto

45people.PriyankJainwillberesponsibleforallofthefinance

andaccountingfunctions.PriyankhassevenyearsexperienceasaCPA.JLastly,Shuddha

SwaadhaschefsAnnapoornaDeviandDurgaprasadRaowhowillberesponsiblefortheback-endproductionoftheventure.Collectivelytheyhaveover37years

ofexperience.





Themarketandfinancialanalysesindicate

thatwithastart-upexpenditureof$141,000,ShuddhaSwaadcangenerate$350,000

insalesbyyearone,$500,000insalesbytheendofyear

twoandproducenetprofitsof7.5%onsalesbytheendofyearthree.Profitabilitywillbereachedbyyeartwo.

Highlights



ClicktoEnlarge

1.1Objectives

1.Salesof$350Kthefirstyear,morethanhalfamillion

thesecond.2.Personnelcostslessthan$300Kthefirstyear,lessthan

$400Kthesecondyear.3.Profitableinyeartwo,betterthan7.5%profitsonsalesbyyearthree.1.2MissionShuddhaSwaadisatrendy

andhealthyplace



toeat,combininganintriguingatmospherewith

excellent,interestingfoodthatisalsoverygoodforthepeoplewho

eatthere.Arewardingplaceforemployees,whichisreflectedintheirservice

delivery.

2.0CompanySummary[ShuddhaSwaadisasingle-unit,medium-sizedrestaurant.Wefocusonorganicandcreativefood.Therestaurantwillbe

locatedinMumbai.



Mostimportanttousisour



financialsuccess,butwebelievethis

willbeachievedbyofferinghigh-qualityserviceandextremelyclean,non-greasyfood

withinterestingtwists.

2.1CompanyOwnership[Therestaurantwillstart

outasasimplesoleproprietorship,ownedbyitsfounders.

2.2Start-upSummaryThefoundersofthecompanyareAnithaDesaiandher

companionPriyankJain.



Priyankfocusesonthefinancialissuesand

Anithaonthepersonnelissues.Priyankearnedhisbusinessmajordegreefrom

theS.P.Jaininstituteofmanagement.

Wehavefoundthelocationand

securedtheleasefor$2,000permonth.Wewillbeabletosetupshopintimetobeginturningbackaprofitbythe

endofmonth



elevenandbeprofitableinthesecond

year.Theplaceisalreadyequippedasarestaurantsoweplan

tocomeupwithatotalof$40,000incapital,plusa$100,000

SBA-guaranteedloan,tostartupthecompany.

Start-up

RequirementsStart-upExpensesLegal$1,000Stationeryetc.$1,000TotalStart-upExpenses$3,000

Other$1,000



Start-upAssetsNeededCashBalanceonStartingDate

$88,000

OtherCurrentAssets$50,000

TotalCurrentAssets

$138,000



Long-termAssets$0TotalAssets$138,000

TotalRequirements$141,000

FundingInvestmentInvestor1$25,000

Investor2$15,000

TotalInvestment$40,000

CurrentLiabilitiesAccounts

Payable$1,000CurrentBorrowing$0CurrentLiabilities$1,000

OtherCurrentLiabilities$0

Long-termLiabilities$100,000

TotalLiabilities$101,000

Lossat



Start-up($3,000)TotalCapital$37,000TotalCapital

andLiabilities$138,000



Start-up

3.0Services

[TheMenu

Themenuisgoingtobeextremely

simplebutchangingeveryday.Wewillkeepasmallgroupofconstants

onthemenuandthenfeatureachef'srecommendationthatweplantohave85%ofmealsordering.Thiswillhelpustoreducewaste

andplaningredients



andpurchasing.

OrganicIngredients

Theorganicingredientelementwillallowustopricetothe

extremelywealthyInternetentrepreneurswhoarelookingtospendanexorbitantamountof

moneytohavepeaceofmindthattheirmoneyisstillcomingbacktothemselves.Wewillbeextremelyecologicallyconsciousaswell,andspread

thisacrossour



literature.

EthnicIngredientsandRecipes

Ourchefwillhavegreatlatitudeindesigningandproducing

menuofferingsfrommanydifferentIndiancultures.Wewillendeavortoprocureall

thetraditional,authenticingredientsnecessarytoholdtruetothesevariedandinterestingculturalrecipes.



4.1MarketSegmentation[backtotop]

TheRichTrendsetters:

Organicisbecomingawayof

lifeforthistargetsegment.Richlads,whonaturallydesireorganicfoodsas

wellasethniccuisine,estimatedtobeat10,00,000innumbers.Theyareaneasytargettoattractforthetrials.Toholdthemand

makethemrepeat



customersisthekey.

Nuclear

families:

Workingcouplesareusuallymoreinterestedintryingout

placeswhicharetrendyandhealthyatthesametime.Theyhavedouble

incomeanditisparticularlyeasytomakethemspendmoneyagain-theyspendthemostondrinks,appetizersandtips.

Dietconscious

womensegment:



Lastgroupwhichisparticularlyinterested

inthemenu'shealthyofferingsisdietingwomenwhichnumber350,000.The

organicfoodmenuwillalwayshavealineofextremelydeliciousverylow-fat

meals.

MarketAnalysis

.0StrategyandImplementationSummary

Ourstrategyissimple,weintendtosucceedbygivingpeople

acombinationof



great,healthy,interestingfood,andanenvironmentthat

attracts"trendy"peoplelikeamagnet.Implementationisn'tsimple,butthat'sin

thedoingofit,notintheplan.

5.1CompetitiveEdge

[Ourcompetitiveedgeisthemenu,thechef,theenvironment,andthetie-intowhat'shealthyandtrendy.

5.2SalesStrategy



Asthetableshows,weintend

todeliversalesofabout$350Kinthefirstyear,andto

doublethatbythethirdyearoftheplan.

SalesMonthly

ClicktoEnlarge

SalesForecastUnitSales200720082009

Meals22,82235,00045,000Drinks11,41517,50022,500

TotalUnitSales



34,47753,00068,500

Other240

5001,000

UnitPrices200720082009

Meals

$6.00$7.00$7.00Drinks$2.00$2.00$2.00Other$3.00$3.00$3.00

Sales

Meals$342,330$525,000$675,000Drinks$22,830$35,000$45,000TotalSales$367,560$565,000$730,000

Other$2,400$5,000$10,000



DirectUnitCosts200720082009

Meals$2.00$2.00$2.00Drinks$0.50$0.50$0.50Other$1.00

$1.00$1.00

DirectCostofSales200720082009

Meals$45,644$70,000$90,000Drinks$5,708$8,750$11,250

Other$240$500$1,000SubtotalDirectCostofSales$51,592$79,250$102,250

6.0

ManagementSummaryAnitha



hasgreatexperiencemanagingpersonnelandwe

arequiteconfidentofhisabilitytofindthebeststaffpossible.

Ourchef,AnnapoornaandDurgaprasad,isalreadyonboardandhasapublished

cookbookthatwilladdprestigetotherestaurantimmediately.Wewillbelookingtofindayoung,ultra-hipstafftomakesureweaddthe

edgethatmakes



ShuddhaSwaadsotrendy.

6.1

PersonnelPlanAsthepersonnelplanshows,weexpecttoinvestin

agoodteam,fairlycompensated.Wethinktheplannedstaffisingood

proportiontothesizeoftherestaurantandprojectedrevenues.

PersonnelPlan200120022003

Manager$60,000$65,000$70,000Hostess$42,000

$45,000$50,000Chef



$54,000$60,000$65,000Cleaning$30,000$35,000$40,000

Waiters$72,000$100,000$130,000



Other$24,000$52,000$55,000TotalPeople

81012TotalPayroll$282,000$357,000$410,000

7.0Financial

PlanWeexpecttoraise$30,000ofourowncapital,andtoborrow

$100,000guaranteedbytheSBAasa10-yearloan.Thisprovidesthebulkofthestart-upfinancingrequired.

7.1Break-evenAnalysisOurbreak-even

analysisisbased



ontheaverageofthefirst-yearnumbers

fortotalsalesbymealserved,totalcostofsales,andall

operatingexpenses.Thesearepresentedasper-unitrevenue,per-unitcost,andfixedcosts.

Werealizethatthisisnotreallythesameasfixedcost,buttheseconservativeassumptionsmakeforabetterestimateofrealrisk.

Break-evenAnalysis





Break-evenAnalysis:

MonthlyUnits

Break-even14,028MonthlyRevenueBreak-even$146,453

Assumptions:AveragePer-UnitRevenue$10.44AveragePer-Unit

VariableCost$8.34

EstimatedMonthlyFixedCost$29,459

7.2

ProjectedProfitandLossAstheprofitandlosstableshows,weexpecttobecomebarelyprofitableinthesecondyearofbusiness,andto

makeanacceptable



profitinthethirdyear.

ProFormaProfitandLoss200720082009

Sales$367,560

$565,000$730,000DirectCostofSales$51,592$79,250$102,250Other$0$0$0

------------------------------------TotalCostofSales$51,592$79,250$102,250GrossMargin$315,969$485,750$627,750GrossMargin%85.96%85.97%85.99%Expenses:Payroll$282,000$357,000$410,000Sales

andMarketingand



$27,000$35,830$72,122OtherExpensesDepreciation$1,000

$1,050$1,103Utilities$1,200$1,260$1,323PayrollTaxes$42,300$53,550$61,500Other

$0$0$0------------------------------------



TotalOperatingExpenses$353,500$448,690$546,047

ProfitBeforeInterestand($37,532)$37,060$81,703TaxesInterestExpense$10,000$9,500

$8,250TaxesIncurred$0$6,890$18,669NetProfit($47,532)$20,670$54,784

NetProfit/Sales-12.93%3.66%7.50%

ProfitMonthly

7.3ProjectedCashFlowThecashflowprojectionshowsthatstartingcostand

provisionsforongoing



expensesareadequatetomeetourneeds

untilthebusinessitselfgeneratesitsowncashflowsufficienttosupport

operations.

ProFormaCashFlow200120022003

Cash

ReceivedCashfromOperations:

CashSales$367,560$565,000$730,000

CashfromReceivables$0$0$0



SubtotalCashfrom

$367,560

$565,000$730,000

Operations

AdditionalCashReceived

SalesTax,VAT,$0$0$0HST/GSTReceivedNewCurrentBorrowing$0$0

$0NewOtherLiabilities$0$0$0(interest-free)NewLong-termLiabilities$0$0$0SalesofOtherCurrent$0$0$0AssetsSalesofLong-term

Assets$0$0



$0SubtotalCashReceived$367,560$565,000$730,000

NewInvestmentReceived$0$0$0

Expenditures2001

20022003ExpendituresfromOperations:

CashSpending$8,979$13,273$20,231

PaymentofAccounts$395,818$525,084$645,906Payable

SubtotalSpenton

$404,797$538,357$666,137

Operations

AdditionalCash

Spent



SalesTax,VAT,HST/GSTPaidOut$0

$0$0PrincipalRepaymentofCurrentBorrowing$0$0$0OtherLiabilities

PrincipalRepayment$0$0$0



Long-termLiabilitiesPrincipalRepayment$0$10,000

$15,000PurchaseOtherCurrentAssets$0$0$0PurchaseLong-termAssets$0

$0$0SubtotalCashSpent$404,797$548,357$681,137

Dividends$0$0

$0

NetCashFlow($37,237)$16,643$48,863CashBalance$50,763$67,405$116,268

Cash

7.4ProjectedBalanceSheetThe

tableshowsprojected



balancesheetforthreeyears.

ProFormaBalanceSheet

Assets

CurrentAssets2007

20082009

Cash$50,763$67,405$116,268



OtherCurrentAssets$50,000$50,000$50,000

TotalCurrentAssets$100,763$117,405$166,268Long-termAssets$0$0$0Accumulated

Depreciation$1,000$2,050$3,153TotalAssets$99,763$115,355$163,116LiabilitiesandCapitalAccounts

Payable$10,294$15,217$23,194CurrentBorrowing$0$0$0OtherCurrentLiabilities$0$0$0SubtotalCurrentLiabilities$10,294$15,217$23,194

Long-termAssets

Total



Long-termAssets($1,000)($2,050)($3,153)

CurrentLiabilities200720082009

Long-termLiabilities$100,000$90,000$75,000

TotalLiabilities$110,294$105,217$98,194Paid-inCapitalRetainedEarnings$40,000($3,000)

$40,000($50,532)$40,000($29,862)TotalCapitalTotalLiabilitiesandCapital($10,532)$99,763$10,139$115,355$64,922$163,116

Earnings($47,532)$20,670$54,784

Net

Worth($10,532)$10,139



$64,922

7.5BusinessRatios[

Businessratiosfortheyearsofthisplanareshownbelow.Industry

ProfileratiosbasedontheStandardIndustrialClassification(SIC)code5813,EatingPlaces,

areshownforcomparison.

RatioAnalysis200720082009IndustryProfile



SalesGrowth0.00%53.72%29.20%7.60%

PercentofTotalAssets

AccountsReceivable0.00%0.00%

0.00%4.50%Inventory0.00%0.00%0.00%3.60%OtherCurrent50.12%43.34%30.65%35.60%

AssetsTotalCurrentAssets101.00%101.78%101.93%43.70%Long-termAssets-1.00%-1.78%-1.93%56.30%TotalAssets100.00%100.00%100.00%100.00%CurrentLiabilities10.32%13.19%14.22%

32.70%Long-termLiabilities



100.24%78.02%45.98%28.50%TotalLiabilities110.56%

91.21%60.20%61.20%NetWorth-10.56%8.79%39.80%38.80%

Percent

ofSales

Sales100.00%100.00%100.00%100.00%GrossMargin85.96%85.97%

85.99%60.50%Selling,General&Administrative98.90%82.32%78.45%39.80%ExpensesAdvertisingExpenses0.65%1.77%6.16%3.20%ProfitBeforeInterestandTaxes-10.21%6.56%11.19%

0.70%



MainRatios

Current9.797.72

7.170.98Quick9.797.727.170.65



TotalDebttoTotalAssets110.56%

91.21%60.20%61.20%Pre-taxReturnonNetWorth451.33%271.84%113.14%1.70%

Pre-taxReturnonAssets-47.64%23.89%45.03%4.30%

AdditionalRatios2001

20022003

NetProfitMargin-12.93%3.66%7.50%n.aReturnonEquity0.00%203.88%84.38%n.a

ActivityRatios

Accounts

Receivable0.000.00



0.00n.aTurnoverCollectionDays00

0n.aInventoryTurnover0.000.000.00n.aAccountsPayable39.3534.83

28.19n.aTurnoverPaymentDays5911n.aTotalAssetTurnover3.68

4.904.48n.a

DebtRatios

DebttoNetWorth0.0010.381.51n.aCurrentLiab.toLiab.0.090.140.24n.a

Liquidity



Ratios

NetWorkingCapital$90,469

$102,189$143,075n.aInterestCoverage-3.753.909.90n.a

Additional

Ratios

AssetstoSales0.270.200.22n.a



CurrentDebt/Total10%13%14%n.a

AssetsAcidTest9.797.727.17n.aSales/NetWorth0.0055.7311.24

n.a

DividendPayout0.000.000.00n.a



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