Strategic business plan
Abstract
The study formulates a comprehensive analysis of the strategic business plan that All 4 Seasons company needs to execute to penetrate in the hospitality industry. A well-developed business plan will result in business success in the competitive hospitality industry. The critical elements of starting a business plan are evaluated to ensure the business penetrates the market. Established businesses in the economy prevent new entrants into the market as the business practice preventive mechanisms that make new business difficult to operate. As large businesses enjoy economies of scale, they lower the price of goods and services that makes it difficult for small businesses to operate. Also, they purchase raw materials and goods at higher prices which small businesses cannot afford. The business plan discusses how to start a small restaurant in New York and its surrounding states. Financial estimates are analyzed to determine the adequate capital required to start and run the business without witnessing short-term and long-term financial obligations. Projected income statement and a market statement is examined to ascertain its feasibility in ensuring the business succeeds. Finally, marketing strategies are also evaluated to ensure the business penetrates to new geographical areas.
TABLE OF CONTENTS
1.0 All 4 Seasons Restaurant 3
4.1 Estimated Future Turnover 5
4.2 Forecasted Values Comprehensive Income Statement 5
7.2 Differentiation of the Business Products. 7
7.4 An Estimated Balance Sheet for the First Two Years. 8
7.6 Branding of the products. 10
1.0 All 4 Seasons Restaurant
The restaurant will strive to confirm the needs of the American people as it provides hospitality service. It will produce side dishes, for instance, fried potato wedges, rice, roast potato wedges, and Ugali that is served with various accompaniments of the customer choice. Some of the accompaniments include beef steak, roast fish, pork chops, and related seafood products. Besides, the clients will have a free soft drink after purchasing the meal from the All 4 Seasons Restaurant. The restaurant will provide other extra activities, for example, quad bike riding, cycling, archery, swimming, and playing of the pool table. The kids’ park will be free and clients are invited to make good use of the facility. The restaurant will also offer a variety of blended fruit juices, for example, smoothies, vegetable juice. Finally, it will also sell alcoholic beverages to increase its business portfolio.
2.0 Sources of Funds
The business will raise starting and operating capital using both equity and debt financing. Personal properties, for instance, furniture, and the private car will be converted into business assets that will facilitate the running of the business. Quad bikes and bikes will be bought on hire purchase terms as the business will pay a down payment of 20% of the cost price while the balance will be paid using the revenues generated from riding activities. Besides, the business will also request a bank loan of $200, 000 that will be used to acquire raw materials and inventory that will be prepared for sale. The management team will have to negotiate the interest rates that will be favorable to the business especially this dynamic business environment whereby the world economy is declining. Borrowed capital will be used to purchase kitchen equipment and cutlery, marketing of the company location and products, financing the working capital, and meeting the daily financial needs of the business.
2.1 Mission Statement
All 4 Seasons Restaurant’s mission is to improve the growth and development of healthy juice and dishes, a desirable lifestyle that positively exceeds healthy requirements.
2.2 Vision Statement
To be leading healthy lifestyle businesses in the hospitality industry.
3.0 Company Administration
The Syllabus covers adequate content in small business management, for instance, cost control, purchase of raw materials at an affordable price, calculation of the break-even point where the business starts recording profits (Assael, 2018). The profits will start exceeding the variable and fixed costs in the break-even point as the business will start registering increased revenues. Experienced production, operation, marketing, and research and development teams will be selected to provide skills in utilizing scarce resources while maximizing the output. As a team, their synergy will replicate increased profits and increasing the market share in a competitive business environment.
4.0 Sales Estimates
All 4 Seasons Restaurant expects a significant increase in revenues in the next four years as the business increases its market share and expands to new market destinations globally. More resources will be diverted to the marketing and research teams to ensure product design, quality, and quantity align with the client expectations. Confirming customers’ expectations will result in increased business referrals as well as building positive goodwill that will positively impact the business (Assael, 2018). Forecasted sales will enable the business to meet its short-term and long-term financial obligations as it competes favorably in the hospitality industry.
4.1 Estimated Future Turnover
All 4 seasons Restaurant anticipates an increasing rate of revenues in the next 2 years as shown in the comprehensive income statement.
4.2 Forecasted Values Comprehensive Income Statement
| Year | 1 | 2 |
| Turnover | $900, 079 | $1,391,423 |
| Operating expenses | $412,123 | $641,456 |
| Gross profit | $487,956 | $749,967 |
| (Taxes and depreciation) | $81, 456 | $101, 431 |
| Net profit | $406, 500 | $648,536 |
5.0 All 4 Season Products
The company will diversify its business portfolio to tap more customers in the market. Major products that the company will sell include cocktails, blended fruit juice, vegetable juice, beverages, seafood, pork chops, beef Steak, and other jointly consumed products. The menu would be evenly distributed in terms of choices as each of the clients will have an opportunity to choose their favorite dish, juice, cocktail, and beverage drinks that will be available.
6.0 Market research
The availability of the market increases more production of goods and services consequently resulting in high profits. The marketing and research team should determine how they will satisfy the existing need of their customers (Khan, 2014). As the business organization designs its successful strategies, customers’ recommendations and feedback should be given priority. Organization strategies should conform to the clients’ expectations as the customers will appreciate the value of their resources. All 4 seasons restaurant should gather adequate information of its competitors concerning business performance in terms of market share, profitability, pricing, distribution channels, means of payment and henceforth to strategize on how to attract customers
(Khan, 2014). Customer satisfaction is the major reason for any business to realize its objectives and goals. Customer satisfaction can be facilitated by conducting adequate research on market segmentation and market diversification as explained below.
6.1 Market Segmentation
Market Segmentation is a defining market tool that is used to classify customers in terms of their needs and priority in the hospitality industry, therefore, demonstrating an essential aspect of marketing. All 4 Season Restaurant should subdivide the market locations into small groups and start collecting adequate data on how their need can be satisfied (Khan, 2014). The research and marketing teams can examine and evaluate the customers’ desires and needs as the team prepares its products for sale or production. All 4 seasons should produce smoothies, cocktails, and other products according to the needs of customers. The company should provide whole fruit cuts juices in the appropriate mixing ratio to maintain loyal customers and attract potential customers.
6.2 Market diversification
Market diversification is the process of a business penetrating new business markets to tap the new market, developing new products and services, and increasing the existing market to new geographical areas (Khan, 2014). Newmarket lines of the company’s product are ascertained as the business can cater to the needs of its potential customers in different geographical Ares. Market diversification will not only increase the company’s profitability but also increase the market share of the company products
(Khan, 2014). The business should also maintain an accurate record of its clients that it will use when conducting personal selling and advertisements.
7.0 Strategies to Succeed
The business should conduct a value chain analysis of its production levels to locate costs incurred to create products and services (Pennette & Keyser, 2015). Proper analysis of the value chains will assist the All 4 Seasons business to minimize operational and production costs thus increasing efficiency and effectiveness of the operation. The most essential elements in Value chain analysis include customer focus, product differentiation, and cost leadership.
7.1 Cost Leadership
All 4 Seasons Restaurant should develop cost centers whereby all costs attributed to direct expenses, direct raw materials, direct labor, and business overhead costs can be estimated. This cost monitoring and analysis will enable the business to curb unnecessary costs that are not attributed to the final product (Chenhall and Moers, 2015). Implementation of a large scale production strategy will increase the company’s marginal contribution while reducing the fixed cost. As more units are produced, the business will have fixed costs reduces as more units are distributed over (Chenhall and Moers, 2015). All 4 Seasons Restaurant should use the opportunity of its expertise in cost analysis to set up selling prices that are affordable to its clients hence dictating the market prices of its products in the hospitality industry.
7.2 Differentiation of the Business Products
All 4 Season Restaurant should execute a product differentiation strategy that distinguishes its products from those of its competitors. Product differentiation makes the product to be unique and specific to a particular business organization. In the hospitality industry, many companies are offering the same products. All 4 Season business organizations will implement different product designs, unique business Logos, and packaging of its products.
7.3 Customer Focus
Customer focus strategy defines the specific requirements of customers and potential customers to a particular group of customers or market niche (Pennette & Keyser, 2015). All 4 Seasons should divide its market into segments and analyze the need of the customers in each section (Khan, 2015). For instance, some people prefer vegetable juice, while others prefer smoothies, milkshake, and other related products. The company should analyze which products are mostly preferred domestically and international markets. A well-executed focus strategy where the substitutes are inferior and the competitors are weak results in regaining the market share while driving out the competitors and preventing new business entrants into an industry. This results in increased sales and profitability hence maintaining a competitive advantage against its competitors.
7.4 An Estimated Balance Sheet for the First Two Years
| Year | 1 | 2 |
| Quad bikes | $ 600, 654 | $784,451 |
| Furniture | $247,764 | $267,976 |
| Cash | $100,000 | $130,000 |
| Debtors | $30,000 | $45,987 |
| Bank loan | $1,200,456 | $900,349 |
| Net profit | $ 406, 500 | $648, 536 |
| Total | $2,555,374 | $2, 670,105 |
The balance sheet is a statement of financial position that shows the business performance of the All 4 Seasons. It shows whether the business is a going concern and can operate for many years. Various types of capital are analyzed to determine if there are adequate returns on investment.
7.5 Cost Cutting
All 4 Seasons Restaurant aims to meet its short term and long term financial obligations as it strives to realize its vision. Cost regulation results in the optimum utilization of scarce economic resources used in the production of juices and beverages (Chenhall and Moers, 2015). All 4 Season Restaurant needs to integrate modern technology that enables the company to be capital intensive instead of labor-intensive. It should install more machines and equipment used in blending, sorting, and packing the juice products. The company also needs to negotiate with vendors who will supply the products at an affordable price (Chenhall and Moers, 2015). The procurement department should advertise its tendering process of acquiring raw materials. This will allow the company to contract suppliers who avail of quality products at an affordable price.
Due to increased distribution and transportation costs. The restaurant needs to franchise more businesses to produce and sell the products using its name, thus minimizing the distribution cost. The company needs to outsource some of its operational activities, domestically and internationally. These will help the company concentrate on significant events that are essential in generating more revenues and profits. Some of the company’s activities it can outsource distribution function, information-gathering function, research and design function, and marketing and promotion function. The company should also monitor its overhead costs to curb the unnecessary costs that do not contribute to the creation of goods and services. Cash flow statement, comprehensive income statement, balance sheet statement should be audited to ensure the reports are true and fair of its activities (Chenhall and Moers, 2015)
7.6 Branding of the products
Product distinction and unique triggers a company to perform branding. Branding is a marketing strategy that distinguishes a company’s products from those of the competitors. For example, formulating a unique symbol, logo, design, and name that identifies the product to All 4 Season Restaurant. Ares that needs branding in the company includes a variety of stores, customer service, goodwill, product promotion, advertising, and the Logo of the company. The restaurant will conduct aggressive advertisements on social media, newspapers, brochures, flyers, websites, and henceforth. The company needs to adhere to its principles and produce juices that meet customer expectations.
8.0 References
Assael, B. (2018). Running the restaurant. Oxford Scholarship Online. https://doi.org/10.1093/oso/9780198817604.003.0003
Chenhall, R.H., and Moers, F. (2015). The role of innovation in the evolution of management accounting and its integration into management control. Accounting, Organizations and Society, 47, pp.1-13.
Khan, M.T., (2014). The concept of the marketing mix and its elements (a conceptual review paper). International journal of information, business, and management, 6(2), p.95.
Pennette, J., & Keyser, E. (2015). Starting & running a restaurant.