Entrepreneurship Management

Project Report on

Submitted To: Submitted By:

Prof. Shinu Abhi Clevin

Carvalho,

GROUP NO: 7

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Vamsi Kanth,

Vivek Kumar Chaturvedi.

Executive Summary

“A well-run restaurant is like a winning baseball team. It makes the most of every crew member's talent and takes advantage of every split-second opportunity to speed up service. “

This is what we have tried to leverage through our business plan “Oceania”. “Oceania” is a restaurant for

fun-seeking as well as sophisticated diners looking for good food in a fascinating atmosphere; where they

are given a chance to experience the wonderful underwater and jungle themed restaurants which they had

missed out so far. Today it is seen that with most of the people are interested to spend their leisure time

going out to different places which gives them new look and experience. After a feasibility study of cross

section of people, in Karnataka, Tamil Nadu, Andhra Pradesh, Bangalore and Chennai in the age group

between 20 to 50 years, the most preferred menus have been selected for start – up phase of the

restaurant. The menus offered would be:

On the Water's services are all delivered in their extraordinary atmosphere which includes a

comprehensive art and culture collection from US and India.

The menu contains traditional favorites such as

Other menu items are kebobs, chutneys, flat breads and desserts. Everything is fresh, homemade,

and prepared daily.

And addition to the menu other services including the wine and beverages and sprits

The differentiating factor of “Oceania” would be it’s extensively for young adults, keeping in mind the fact

that their experience is different from that of others because of which they may not feel existed with other

restaurants.

Though “Oceania” had been called a restaurant, it would be more than a just restaurant, it would be a

single stop solution for younger and adult generations where they acquire new experience and also engage

in hobbies for leading a more fulfilling and enriching life. There would be well attractive space birthday

parties celebrations, and other occasions and many more of such events to keep people engaged. The

positioning of the restaurant would be a not a restaurant but an amazing place, where one spends one’s

time constructively, experiencing new things.

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The industry when analyzed using Porter’s Five Force model, showed that it is quite attractive, as there is

no player in the market at present which provides a similar offering. “Oceania” faces indirect competition

from players like local restaurant players and pubs

Initially the restaurant would start at one location Bangalore – which would be acting as separate profit

centers and managing their operations independently. The menus offered would remain same throughout

and regional preference would be taken into consideration for the traditional menu. The menus are priced

differently for weekdays, weekend. The revenue generation would be based on certain charges for each

item.

“Oceania” would be breaking even in the third year of operations. An initial startup capital of Rs. 4 cores

would be required for starting the 2 units. The growth plans are to expand based on the movement and

demand of the market.

“Oceania” is a novel idea and the major reason for its success would be its innovative serving model. The

impression and experience that the people would enjoy with “Oceania” would lead it forward in the future

and this would be a major platform for them to enjoy their passion and lead a more happy life.

There is need for this offering in the market and we are passionate about this idea, so “Oceania” is a

means to match the need with our passion.

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Background Information

Concept

We have experience it ourselves more need for new restaurants when we spoke to our friends and

relatives about the themed restaurants and their leisure time hobbies. This inspired us to come up with an

arrangement that would make them happy at fascinating atmosphere and keep them engaged in our

absence, thus leading to origin of “Oceania”

The concept of “Oceania” originates from the fact that, in this age of advanced technology and

unorganized restaurants, a majority of our younger’s and adults feels left behind and looking for something

new fascinating atmosphere restaurants. Also, people need something to make them feel new every time to

themselves with and at present there is no such offering in the market. “Oceania” aims to become that the

place for the youngsters where they can enjoy their passion.

“Oceania” is different because of the exclusivity for elderly people and the variety of items offered under a

single roof. “Oceania” would be a restaurant meant especially for younger people where menu contains

traditional favorites, other menu items are kebobs, chutneys, flat breads and desserts. Everything is fresh,

homemade, and prepared daily. In addition to the menu other services including the wine, beverages, and

sprits. Though “Oceania” has been called a restaurant, it would be more than a just restaurant, it would be

a single stop solution for younger and adult generations where they acquire new experience and also

engage in hobbies for leading a more fulfilling and enriching life. There would be well attractive space

birthday parties celebrations, and other occasions and many more of such events to keep people engaged.

The positioning of the restaurant would be a not a restaurant but an amazing place, where one spends

one’s time constructively, experiencing new things.

Drivers

60% of the population of India is between 20 to 50 years. These people spend their leisure time by hanging

around restaurants, pubs and shopping centers. At the same time, they are mostly bored going to the same

places every time. For these people it becomes even more difficult spending their time as they do not like to

see the same places every time.

Few of the major driving factors that lead to the conceptualization of “Oceania” are as follow:

Increasingly demand for restaurants in our day to day life.

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Younger generations are looking for something new to have fun.

No well organized and wonderful themed restaurants in the market

Due to the above mentioned factors it could be concluded that youngsters need to engage themselves in

for fun and joy to lead a happier life and hence “Oceania” is the solution.

Business Proposition

Services Offered

One thing that is always consistent with on restaurant is their impeccable service. All server staff hired has

extensive experience and all go through three weeks of training, ensuring benchmarked customer service.

On the Water's services are all delivered in their extraordinary atmosphere which includes a comprehensive

art and culture collection from US and India. This provides an authentic surrounding that at times seems to

distract everyone as they analyze the wealth of artifacts on display.

The menu contains traditional favorites. These favorites are differentiated through the use of the freshest

organic ingredients. Most people are not aware of how much better the items taste when they are prepared

with the freshest ingredients and made with love. Other menu items are kebobs, chutneys, flat breads and

desserts. Everything is fresh, homemade, and prepared daily.

The menus are of daily (Weekdays), weekends basis.

The medium for serving would be both in US and increase India traditions. It can be assumed that most

adults would not be comfortable with only nontraditional food as the medium of serving and therefore

traditional food would be a more preferred medium. This would primarily the market coverage and also

helps in scalability.

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Customer Profile

On the restaurant will be targeting locals and tourists who are active restaurant seekers. There will be a

special focus on young adults with 15K - 60K of income looking for good food and a great time. In addition

to the young adults with money to spend, On the Water will also be targeting adults and tourists. The

general demographics are males and females ages 20-50 with some or all of a college education.

Historically, if there is a dip in the general economy, the restaurant industry is usually effected far less that

the overall economy. To some degree this is because of people's perception that food, regardless whether

it is from the grocery or restaurants is a fundamental necessity of life and spend accordingly.

Pricing Strategy

The price for each of the item mentioned are enlisted below. All the figures shown below are monthly

charges and are in Indian rupees.

Positioning

The restaurants will be positioned as merely a service provider but as a way of fun and joy. The tagline of

“Experience the reality……” would be used to create

reality and new experience to customers. It is like a new world to youngsters or adults.

The unique selling propositions of the offering are as follow:

A underwater restaurant with affordable price menu (Underwater Restaurant)

Experience the jungle atmosphere in the city (Jungle Restaurant)

Feel as a king from the extraordinary services

All food items under single roof

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Promotion of the Service

The initial response towards the project is greatly dependent on the marketing strategies adopted.

Branding:

To build a brand image for itself, the restaurant has chosen the brand elements like the logo, the

tagline that goes well with its value proposition.

The advertisements should focus on new world, reality, fun and joy in restaurants, with the target

audience.

Communication strategy:

The communication objective is to initially develop awareness about the USP in the market as this is a new

concept and then concentrate on influencing the customers to experience the reality. Three elements have

been considered as part of the marketing communication mix.

Marketing channels:

Various marketing channels have been considered like newspapers, TV channels and radio. Tie – ups with

five stars hotels and big corporate institutions to get the corporate look.

External customers:

Those customers who experienced the reality would definitely spread the experience about the reality and

services provided at “Oceania”. It is believed that word of mouth would reach create more loyalty and

publicity than any other branding. Word of mouth would be the main form of our communication to the

potential customers.

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Infrastructure Requirements for Execution

In the initial stage the plan is to start two restaurants in Bangalore –

The major infrastructure requirement for starting the venture is the space for setting up the restaurant.

Apart from the space requirements, other requirements include furniture, High quality glass, and cooking

furniture as well. The premises would be taken either on rental or lease and all other requirements would

be purchased. Approximately an area of 1lakh square feet is being considered for underwater restaurant

and approximately an area of 70000 to 80000 square feet is being considered for Jungle restaurant.

Internet connections would also be required for which connections will be subscribed to and monthly

charges would be paid. The approximate details of quantities required have been specified in the financials

section.

Organization Structure

The business model is based on the idea of each of these two units would acts as separate profit centers

and manage their operations independently. The menu would remain same but the item charges would

differ for each restaurant.

Each unit shall have a Manager who will manage the day to day operations of the units and would be

reporting on thrice a week basis to us. The unit will have

As the demand grows, the number of employees will increase according to manage the workload. Thus the

organization chart, which is quite flat structure initially, is shown.

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Industry and Market Analysis

The concept of “Oceania” originates from the fact that, in this age of advanced technology and

unorganized restaurants, a majority of our younger’s and adults feels left behind and looking for something

new fascinating atmosphere restaurants. Also, people need something to make them feel new every time to

themselves with and at present there is no such offering in the market. “Oceania” aims to become that the

place for the youngsters where they can enjoy their passion.

Few of the major driving factors that lead to the conceptualization of “Oceania” are as follow:

Increasingly demand for restaurants in our day to day life.

Younger generations are looking for something new to have fun.

No well organized and wonderful themed restaurants in the market

Due to the above mentioned factors it could be concluded that youngsters need to engage themselves in

for fun and joy to lead a happier life and hence “Oceania” is the solution.

Players in the market

“Oceania” faces numerous challenges from number of restaurants, star hotels and other independent

services. The major competitors would be big value chain restaurants like Ohris Restaurants, Khairali

restaurants, Hyderabad House, independent services likes KFC, Mc Donald’s, Pizza Hunt, Dominos, local

players and other star hotels like Taj residency, Leela Palace, Holiday Inn, Oberoi etc. All these

competitors positioned themselves as a place to have food which is called restaurant. And none of these

food chains are in themed based.

But “Oceania” will definitely enjoy the competitive advantage in positioning itself saying

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“Experience the reality……” which would prove the

reality and new experience to customers under water and jungle themed restaurants. It would be more than

a just restaurant, it would be a single stop solution for younger and adult generations where they acquire

new experience and also engage in hobbies for leading a more fulfilling and enriching life. There would be

well attractive space birthday parties celebrations, and other occasions and many more of such events to

keep people engaged. The positioning of the restaurant would be a not a restaurant but an amazing place,

where one spends one’s time constructively, experiencing new things.

Aspirations of the Oceania

Vision & Mission

On The restaurant is a business that envelopes fine dining of unique Mediterranean taste and an excellent

bar and grill atmosphere. The mission is not only to have great tasting food, but have efficient and friendly

service. Our di ning environment is not only welcoming and sophisticated; it is unique in design, with walls

on almost all sides that are constantly wet with running water and a lush jungle ceiling that will hang

from above. We concentrate on customer satisfaction and quality food that is always fresh and specially

selected. We will not judge a customer on class or dress. We want the On The Water grill to be place

people can enjoy a good meal and meet new friends at our tropical Mediterranean Honey bar located inside

the restaurant.

Background of Entrepreneurs

The team comprises of two budding entrepreneurs who are currently pursuing their PGDM (MBA) from

IFIM B- School, Bangalore and both of them are specializing in Marketing and General Management.

Among both entrepreneurs, one has one and half years of corporate experience in Marketing and also

specialized in Accounting Package from BDPS. And other one has experience in Event Management

Marketing and actively participated in Personality Development Programs. Also both of them have proved

the leadership skills in organizing seminars at IFIM campus and worked as Team Leaders for various

projects. Moreover one of them has good experience in Marketing Research and worked with AC Nielson

Org Marg Pvt Ltd which would be of added benefit for understanding the needs of customers in better way.

Company Summary

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“Oceania” creates and serves a wild atmosphere for dining and eloquent Mediterranean feasts for people

who love the restaurant and bar scene, as well as a good time spent out on the town. Its customers are

creative, fun-seeking, and sophisticated diners who wish to be best served by the restaurant they choose.

Company Ownership

“Oceania” is a partnership business owned in majority by its partners. The business employs the

manager, Support Staff and Employees.

Financial Plan

The following topics and tables outline our financial plan. We plan to turn a significant profit, but we will

structure the business so as to maintain a healthy cash flow.

Important Assumptions

The financial plan depends upon important assumptions, most of which are shown in the following table.

The key underlying assumptions are:

We assume a slow-growth economy, without major recession.

We assume that there are no unforeseen changes in the expectancy in the popularity of our

restaurant.

We assume access to investments and financing are sufficient to maintain and fulfill our financial

plan as shown in the tables.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

Start-up Summary

Our start-up expenses come to Rs. 4 Cores which is mostly expensed equipment, rent, and legal and

consulting costs associated with opening our restaurants. We also require 60 lakhs of start-up assets,

which includes 50 lakhs cash and 10 lakhs of long-term assets. The start-up costs are to be financed some

by direct owner investment, as well as with the help of a major investor.

Start-up Expenses

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Start-up Expenses Legal 50,000.00Stationery etc. 100,000.00Menus 30,000.00Consultants 100,000.00Insurance 500,000.00Rent 7,000,000.00Capital Cost 25,000,000.00Other 1,000,000.00Total Start-up Expenses 33,780,000.00 Start-up Assets Cash Required 5,000,000.00Start-up Inventory 1,000,000.00Total Assets 6,000,000.00Total Requirements 39,780,000.00

Strategy and Implementation Summary

The following sections outline the strategy and implementation summary for “Oceania”.

Sales Strategy

The important elements of the sales forecast are shown in the following table. The sales of food, drinks

take a while to grow but will grow in second year.

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Sales Forecast

Unit Sales

Year 1 Year 2 Year 3

Meals 25,000 35,000 50,000

Drinks 20,000 25,000 40,000

Total Unit Sales 45,000 60,000 90,000

Unit Prices

Meals 400 400 430

Drinks 50 50 60

Sales

Meals 10000000 14000000 21500000

Drinks 1000000 1250000 2400000

Total Sales 11000000 15250000 23900000

Direct Unit Costs

Meals 150 150 150

Drinks 25 25 25

Direct Cost of Sales

Covercharge

Meals 3750000 5250000 7500000

Drinks 500000 625000 1000000

Subtotal Direct Cost of Sales 4250000 5875000 8500000

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Management Summary

Our management philosophy is based on responsibility and mutual respect. People who work at “Oceania”

want to work there because we have an environment that encourages creativity and achievement. The

team includes a maximum of eight to twelve employees, under a president/manager of one.

Personnel Plan

The personnel plan reflects what we would like to keep as a steady positioning throughout the years. Our

total headcount will increase from 54 to 66 come year3 because that's the beginning of our "good" season.

However, we plan to keep the head count at 60 because of the space and dynamics of the restaurant. It

appears we don't need more than 66 employees to run the business until the fourth and fifth year, if and

when we are successful enough to expand. Detailed monthly projections are included in the appendix.

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Payroll Plan Year 1 Year 2 Year 3

No of

StaffSalary PM PA No of

Staff Salary PM PA No of Staff PP PM PA

Manager 2 15,000 30,000 360,000 2 15,000 30,000 360,000 2 15,000 30,000 360,000Hostess 10 3,000 30,000 360,000 12 3,000 36,000 432,000 12 3,000 36,000 432,000

Waiters/Waitresses 14 5,000 70,000 840,000 16 5,000 80,000 960,000 18 5,000 90,000 1,080,000Bartenders 4 4,500 18,000 216,000 4 4,500 18,000 216,000 6 4,500 27,000 324,000

Support Staff 6 3,500 21,000 252,000 8 3,500 28,000 336,000 8 3,500 28,000 336,000Cocktail Waitresses 10 5,000 50,000 600,000 10 5,000 50,000 600,000 10 5,000 50,000 600,000

Chefs 8 8,000 64,000 768,000 10 8,000 80,000 960,000 10 8,000 80,000 960,000Total People 54 62 66

Total Payroll 44,000 283,000 3,396,000 44,000 322,000 3,864,000 44,000 341,000 4,092,000

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3 (Three) years Profit and Loss Statement

The figures relating to the associated costs are for 2 units and have been estimated for 3 years. The

investments (in Rs) on a yearly basis for one unit:

Pro Forma Profit and Loss Year 1 Year 2 Year 3

Sales 11,000,000 15,250,000 23,900,000Direct Cost of Sales 4,250,000 5,875,000 8,500,000Other Total Cost of Sales 4,250,000 5,875,000 8,500,000 Gross Margin 6,750,000 9,375,000 15,400,000Gross Margin % 61% 61% 64%

ExpensesPayroll 3,396,000 3,864,000 4,092,000Sales and Marketing and Other Expenses 300,000 200,000 200,000

Depreciation Insurance Rent 700,000 700,000 700,000Utilities Leased Equipment Payroll Taxes 237,720 270,480 286,440Other Total Operating Expenses 4,633,720 5,034,480 5,278,440 Profit Before Interest and Taxes 2,116,280 4,340,520 10,121,560EBITDA 2,116,280 4,340,520 10,121,560Interest Expense Taxes Incurred 200,000 200,000 200,000 Net Profit 1,916,280 4,140,520 9,921,560Net Profit/Sales 17% 27% 42%

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Conclusion

We consider that the idea is different from the other offerings in the market because no other restaurants of

this kind exist in the market. So “Oceania” will definitely enjoy the competitive advantage from the day one

itself and also can be excepted to perform competitively in future.

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Annexure

The excepted sample view of Under Water Restaurant

The excepted sample view of Jungle Restaurant

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