table of contents (formal design) painter...  · web viewtable of contents. executive summary2....

37
Business Plan Prepared By Sheena Rowan For EBAC 52 Professor Marv Painter December 10, 2012 0

Upload: vanmien

Post on 02-Feb-2018

217 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Business PlanPrepared By

Sheena Rowan

For

EBAC 52

Professor Marv Painter

December 10, 2012

0

Page 2: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

TABLE OF CONTENTS

APPENDIX A – SAMPLE EVENING MENU

1

Page 3: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

EXECUTIVE SUMMARY

Nostalgia Bistro will be located at the Temperance Street Triangle, 702 14th Street East, in the historic Nutana area of Saskatoon. Nostalgia has a seating capacity of 44 people and will offer its patrons from surrounding neighborhoods a very different and unique dining alternative in a warm, inviting atmosphere. The bistro will offer a sense of place to its customers, providing enjoyable fresh and home-made comfort foods for the lunch and coffee crowd, and a sophisticated fine dining experience, with a European flair, for the evening crowd.

The Broadway and Nutana area is a vibrant and animated arts, entertainment and business area, recognized as a unique people place, rich in cultural diversity and vitality. Our coffee and lunch customers will consist of residents drawn from at least 4 surrounding neighborhoods, and will also include professionals from nearby elementary schools, a post-secondary institution, and teaching hospital, as well as professionals from the Broadway area. The fine dining experience offered to evening customers will draw its clientele from all over the city, not limited to one area in particular. We know that when it comes to fine dining, location is not necessarily a priority, but the quality of the experience is.

The bistro will be open 7 days per week, closed statutory holidays. Hours are as follows:

Lunch Hours: Monday thru Sunday from 11 a.m. – 2 p.m.

Evening Hours: Monday thru Sunday from 5:30 – Close

Evening Dining is by reservation only. Three seating times are available: 5:30, 7:30 and 9:30 p.m.

Entertainment is provided Thursday – Saturday evenings by local acoustic musicians

2

Page 4: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

1.0 INTRODUCTION

The term “nostalgia” describes a sentimental longing for the past, typically for a period or place with happy, personal associations and memories. The management and staff of Nostalgia Bistro will strive to provide its customers with an 11 out of 10 fine dining experience.

We will offer a casual café during the day, with a street-side patio during summer. Our attentive bistro staff will provide day time patrons a welcoming atmosphere and a good selection of delicious and nutritious lunch items, such as homemade soups and artisan breads, muffins and pastries, along with a great selection of herbal teas and premium free trade coffee. Our lunch hours are Monday thru Sunday, 11 a.m. – 2 p.m.

In the evenings, Nostalgia becomes a full-service fine dining restaurant, with an ambient atmosphere offering a globally inspired menu in a space that features exposed brick, artwork by local artists, hardwood floors, beautiful warm fireplace and soothing lighting. Relaxing musical interlude is provided Wednesday through Saturday evenings by local acoustic artists. Our menus are augmented with a variety of wines, liquors and deserts to further enhance the experience. Evening reservations are segmented and we offer 3 reservation time slots: 5:30 p.m., 7:30 p.m. and 9:30 p.m., Monday thru Sunday evenings. Tables are set with good china, cloth tablecloths and napkins. Servers are attentive without being intrusive.

1.1 INDUSTRY & COMPETITIVE OVERVIEW

Saskatoon’s restaurant industry is extremely vibrant and innovative, and therefore the market is very competive. Saskatoon has one of the highest restaurants per capita in Canada, made up of a variety of ethnic offerings. There is a restaurant to suit everyone’s palate and budget. Saskatchewan’s growing population and wealth, according to a 2011 RBC report, are continuing to allow the province to again lead the country in gross domestic product (4.3%). Retail sales also continue to grow. Saskatchewan’s economic forecast looks very good and very promising. The unemployment rates in Saskatchewan have been declining and a 2010 report by KPMG rated Saskatoon as second in the competitive business market. Adding to our economy are countries that are finding Saskatchewan a very attractive place to invest in.

Saskatoon current population is near 250,000 people, with more than half of that population over the age of 35. The Nutana area alone has approximately 7,000 residents and is a mix of single-family detached homes and apartment-style condos with a middle to upper-income bracket.

We have a lot of competition. Currently, there are 20 some food & beverage or deli style venues in the immediate area, located directly on Broadway Avenue. Three of these might be considered fine dining – including Calories, Wesceria, and Bliss – offering special items such as locally grown or organic products. All three are small privately owned businesses targetting a lunch crowd and some evening dining. Our most

3

Page 5: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

direct competition is located elsewhere – Rembrandt’s and Carvers in Downtown Hotels, and further out, Mr. Rizos and the Victorian.

1.2 MISSION STATEMENT

Our Product ~ Our Promise“We will consistently provide a memorable presentation of culinary aromas and

creations. The artistry of our offerings is but a prelude to an “unforgettable” dining experience.”

1.3 GOALS & OBJECTIVE

Nostalgia Bistro’s goal is to offer to its clientele a sense of place, providing enjoyable fresh and home-made comfort foods for the lunch and coffee crowd, and a sophisticated fine dining experience, with a European flair, for the evening crowd. We will consistently serve high quality products and value added attentive hospitality to our patrons in a warm and elegant setting.

Our objective is to secure customer loyalty and increase the frequency of their visits. We will strive to ensure that our customers believe any detour is worthwhile to visit and experience Nostalgia Bistro.

4

Page 6: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Operations Plan

5

Page 7: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

2.0 The Operations Plan

The objective of this Operations Plan is to provide a clear description of how our business will operate and to offer some cost projections for the next five years.

2.1 Our Organizational StructureCorporate ownership offers us a number of advantages, including limited financial risk, easy transferability of ownership and increased availability of capital. We have chosen to incorporate for all of these reasons. Shareholders include my husband and I, who have contributed $75,000 of our savings. The sale of shares by the corporation could be an attractive method of raising needed capital down the road should we decide to expand or possibly relocate.

2.2 The RestaurantThe property itself has 8 parking stalls available behind the building. Once some minor décor renovations have been completed, and new kitchen equipment and furnishings installed, Nostalgia will seat 44 guests comfortably and will offer its patrons from surrounding neighborhoods and throughout the city, a very different and unique dining alternative in a warm, inviting atmosphere.

This intriguing building at the corner of Temperance and Landsdowne yields 2200 square feet. It is wheelchair accessible and has two large customer washrooms that will also accommodate wheelchairs. The kitchen area is about 600 square feet (nearly 30%). Each bathroom is approximately 40 square feet, and the restaurant seating area is just over 1500 square feet, allowing seating for at least 44 people and lots of room for servers and

6

Owner/Executive Chef

SousChef

Kitchen Staff

Owner/General Manager

Front End Supervisor

Front End Staff

Page 8: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

hostesses to work around. An additional 16-20 people can be accommodated on the outside patio, during the summer months.

Leasehold improvements to the property will include some renovations in the kitchen area in order to accommodate the equipment and allow a smooth flow of production operation. Some tiling, painting, and the installation of a new HVAC hood will also be needed. The staff bathroom is located just off of the kitchen and does not require any renovation.

7

Page 9: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

The dining area will require new paint and flooring, a bar and hostess station, and deli counter/reception desk. Some new lighting will also be added as well as a sound system. The majority of the kitchen equipment has been purchased gently used at a cost saving of nearly 40%. The kitchen equipment will include items such as refrigerators, shelving, sinks, dishwashers, worktables, ice machine, dishes, utensils, pots, etc. Coffee equipment will be leased.

Furniture includes tables and chairs for indoor seating of 44 guests and outdoor patio furnishings. Miscellaneous items include cash register, sound system and office equipment. Initial set-up costs therefore will be in the range of $86,000.00. The dining room and kitchen have been designed to accommodate possible future plans such as Sunday Brunch, catering services and possibly community cooking lessons.

2.3 An Average Business DayNostalgia Bistro will offer a combination of table and counter service during the day, deli style. Ideally, we will serve approximately 60 customers per day between 11 a.m. and 2 p.m. Average check will be about $10.00 per person. The lunch menu will consist of quality coffees and teas, homemade soups and artisan breads, and a small selection of pastries, scones and muffins.

The kitchen manager and front end supervisor arrive at 10:00 a.m. Inventories are reviewed, soups are started/turned on, sandwiches/fillings are prepared, fresh bakery are baked and the restaurant is set up for the arrival of customers. At 10:30 a.m., part time server staff arrives to assist with any lunch prep. Doors open at 11 a.m. for business. All staff remain until 3 p.m. to clean up from the lunch hour business (closing procedures) and to prepare vegetables, soups, salads, for evening courses and next day lunches. The front end supervisor looks after the cashouts and closing.

8

Page 10: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

2.4 An Average Business EveningEvening dining begins at 5:30 p.m. Three seatings are offered throughout the evening with the last seating available at 9:30 p.m. Reservations are required but we will do our very best to accommodate walk in traffic when necessary.

The kitchen supervisor and front end supervisor arrive one hour before opening in order to prepare the restaurant set-up and review evening reservations. Remaining kitchen and serving staff will arrive at 5:30 p.m. Sunday thru Tuesday evenings, serving staff and the front end supervisor will look after any required bar service. A bartender will be scheduled for Wednesday through Saturday evenings as these evenings are much busier and bar sales tend to be higher later in the week. Schedules may be adjusted as necessary. Serving staff will be dismissed as reservations level out through the evening. The kitchen supervisor and staff will begin clean up following the last order and begin food prep for next day. Remaining serving staff will begin clean up following the last reservation and prepare the front end for the next business day. The front end supervisor will do the final cashout and lock up the building.

2.5 SuppliersOur suppliers include the following companies:

Sysco Hardy’s Food Sales Saputo/Dairyland Independent Choice Distributors Pacific Fish

We will also purchase some of our products on occasion from wholesale groups such as Costco, Superstore, etc. and local farmers and producer’s such as the Berry Barn, and Pineview Farms.Other non- food suppliers related to the operations will include EcoLab, Canadian Linen, and Imperio Plumbing and Heating.

2.6 Working Capital

CashWe have made an initial investment into the operations of Nostalgia Bistro of $75,000. We have also secured a line of credit with our financial institutions in the amount of $25,000. This will allow us a buffer should we need any emergency funds during the start-up through first year. We intend on retaining dividends for the first few years, as plans are in place down the road, once our name has been established to expand our services into catering. The building is leased so there is good possibility it may be put on the market, at which time we may consider purchasing the building or relocating our business to another area. .

9

Page 11: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

InventoriesDepending upon the food being ordered, most orders will be placed twice a week. We offer our patrons fresh dishes – not frozen. For example, produce and dairy will need to be ordered every few days, seafood and meat products will need to be ordered every few days to insure freshness. Processed groceries and beverage items will be ordered weekly, in some cases bi-weekly.

Accounts Receivable and Accounts PayableBecause our sales are immediate, accounts receivable are not applicable to our business. Our vendor accounts will be paid net 20 if not on a weekly basis. Cash generated by our business will be used to cover accounts payable.

Cost of Goods

Chef J. D. and his staff are committed to sourcing the finest ingredients and products. All pastries, breads, stocks and sauces are prepared by Nostalgia. Nostalgia will work to a 33% food costs. Some of our food costs are higher than others due to the quality of our ingredients and special order items. The average check for fine dining will be approximately $50.00 per person. This is based on a meal and a glass of wine or beverage, and desert. We would like to turn the tables at least twice on fine dining evenings, but people generally like to linger so we think anticipating to serve 50 -60 customers per evening may be a more reasonable assumption for the first year. Our fine dining offerings will lean towards a higher end price. We will be positioned in the mid to high-end range. Food costs will be just over a third of the price of each plate for a margin of about 65%. For example:

Cost of Food (including overhead) 35%Example: Filet Mignon

Beef Filet AAA 8 oz. $6.00Potato/Salad/Condiments 2.50

Cost of Meal $8.50 = Menu Price $29.75

Revenues are projected to increase steadily over the next 5 years, as per the Canadian Restaurant and FoodServices Association by about 4.1% annually. By Year 5 our expected annual sales will total $1,342,049.

10

Page 12: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Capital Budget

Capital BudgetLeasehold Improvements 35,000Equipment 30,000Furniture and Fixtures 22,000Total Capital Budget 87,000

11

Page 13: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Human Resources

12

Page 14: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

3.0 Human Resources

3.1 Management

Red Seal and Certified Chef de Cuisine and co-owner, J. D. Rowan has over 30 years of fine-dining and food and beverage experience. Under the direction of the Executive Chef, Nostalgia kitchen staff will delight guests with homemade soups and deli products during the day and superbly prepared creations, served unpretentiously in a relaxed “artsy” surrounding for an evening out. The Executive Chef will be in charge of ordering inventory, menu preparation and scheduling for the kitchen staff, in collaboration with the Kitchen Supervisor. The General Manager will oversee the front of the house operations, maintain the management information system, provide business management, and assist the front end supervisor with hiring and scheduling.

3.2 The Staff

Working alongside the Executive Chef and the General Manager, will be have one full-time kitchen supervisor, one full-time cook, one full-time front of the house supervisor, 4 part-time serving staff, 1 part-time bartender, 2 part-time kitchen staff (dishwasher/prep cook). Shifts will vary depending on hours of operation. Kitchen and serving staff will be expected to have training in HACCAP, FoodSafe.

Staff will be hired based on experience, attitude, and appearance. They must portray a very warm and attentive manner and be knowledgeable of the items on our menu. Casual attire is acceptable for the daytime shift, however, evening serving staff will be asked to dress professionally, likely in black trousers, white shirts. Other standards for both day and evening servers include:

No visible tattoos

No visible facial piercings

Clean shaven or neatly trimmed beards on male staff

Clean, trimmed finger nails (free from nail polish for food prep workers)

No excessive jewelry

Neat and clean clothing

A handbook is being created that will explain employee benefits, incentive programs, expectations and standards, to each new staff member. Nostalgia Bistro will pay its part-time staff slightly higher than the industry standard of 10.50 an hour. We will also offer incentives to staff for exceptional service, attendance, creativity and motivation. Some of those incentives will include gift certificates, iTunes cards, and movie tickets. We will empower and encourage our staff to offer suggestions as to how we might run our business better. Our staff and the service they provide are as important to our business as the quality of our menu.

13

Page 15: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

3.4 Schedule

Scheduling will be done on a weekly basis in order for management to stay abreast of sales projections as well as needs of the staff. Schedules will be posted in a designated area of the restaurant and will also be emailed to staff so that they have access to the schedule from their own homes, leaving less possibility for missed shifts. We know that the schedule must be flexible to allow for illness, days off requests, etc. so we anticipate making changes often. Only the managers are able to adjust the schedules. Changes are not to be made between staff members.

Our labour costs for year one will run at approximately 30%. The industry average is between 25 & 30%. We may have too many staff considered for the first year, but this can be easily adjusted once we have experienced a few runs at our sales.

14

Page 16: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Marketing Plan

15

Page 17: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

4.0 Marketing Plan

4.1 Competitive Analysis

Nostalgia Bistro has much competition for the lunch business in the immediate area. Currently, there are 20 some food & beverage or deli style venues located directly on Broadway Avenue.

A few of these venues also offer evening dining. Three that may also be considered fine dining – include Calories, Wesceria, and Bliss. These restaurants offer special items such as locally grown or organic products. All three are small privately owned businesses targetting both a lunch crowd and some evening diners.

Our most direct fine dining competition is located elsewhere – Rembrandt’s and Carvers in downtown hotels, and further out, Mr. Rizos and the Victorian.

VENUE Location Style

Calories Broadway Ave Lunch & Specialty

Bliss Broadway Ave Lunch & Specialty

Wesceria Broadway Ave Lunch & Specialty

VENUE Location Style

Rembrandt’s Senator Hotel Fine Dining

Carvers Sheraton Hotel Fine Dining

Victorian Ave C. Fine Dining

Mr. Rizos Idylwyld Dr. Fine Dining

4.2 Place

An important factor in the restaurant experience is the ambience. ‘Ambience’ refers to the mood, character, quality, tone, atmosphere, etc. of an environment. The ambience of a restaurant can even change throughout the evening. We know that the role of ambience in our restaurant is a very important factor for our fine dining customers. Ambience is not just about the menu, décor, the music and the lighting. It is also about the presentation of the food, the quality of the service, and the location of the restaurant. Our target market consists of two segments that complement one another nicely. During the lunch hour we will target, RUH and U of S Staff, elementary school staff, and local residents. The Nutana area alone has about 7,000 residents and is a mix of single-family detached

16

Page 18: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

homes and apartment-style condos with a middle to upper-income bracket. We will also draw from the 8th Street and Broadway business areas. Saskatoon has a growing population. Currently, that population is about 237,000 people. Saskatoon’s median age is 35.9, and half of Saskatoon’s population is this age and over. Evening dining is targetted at this particular age group and will include professionals, professional working couples and empty nesters. This age group earns approximately 80,000 per year and upwards, and is looking for a quiet and relaxing place to dine. Empty nesters eat out more and spend more when they eat out. They typically spend 65% more on dining out than couples living with children. They are generally more concerned about the quality of food and the elegance of the atmosphere than they are about the price of the meal.

4.3 Advertising and Promotion

It is our intention to spend approximately $5,000 the first year on advertising. In the years to follow we expect to spend in the area of $2.500 as most of our advertising will by that time be word of mouth.

Our advertising plan includes:

A Launch Party – we will invite local celebrities and colleagues to attend a “pilot” night, sampling some of our menu items, wine-sampling, etc. This will allow our servers and kitchen staff to have a trial run before opening night.

A menu drop to local residents and businesses Social Media - Creation of a website – including a Facebook page and a twitter

account. The younger end of our target market is tech savvy and social media is an inexpensive way to reach this group.

Dining incentives such as “tell a friend” programs, and frequent diner cards. Advertisements in local and community newspapers prior to special holidays. Radio “airtime” a few times throughout the year. Word of Mouth – will be our main advertising and promotion

4. 4 The Products

17

Page 19: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Nostalgia’s fine dining menu offers its customers a globally inspired menu in a beautiful welcoming environment and inviting atmosphere. Our attentive bistro will offer day time patrons a very nice selection of delicious and nutritious lunch items, such as homemade soups and artisan breads, muffins and pastries, along with a great selection of herbal teas and premium free trade coffee. The menu will be augmented with a variety of wines, liquors and deserts to further enhance the experience.

An important factor in the restaurant experience is the ambiance. ‘Ambience’ refers to the mood, character, quality, tone, atmosphere, etc. of an environment. The ambiance of a restaurant can even change throughout the evening. We know that the role of ambience in our restaurant is a very important factor for our fine dining customers. Ambience is not just about the menu, décor, the music and the lighting. It is also about the presentation of the food, the quality of the service, and the location of the restaurant.

The evening menu will consist of a few signature items, available at all times. Seasonal items will be included on the menu. Menu items will change every three months. Less popular items will be removed from the menu. Our value proposition – consistent quality food and service. See Appendix A for a sample of our menu.

Please see Appendix A for a sample menu

18

Page 20: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

4.5 Pricing Strategy

Our fine dining offerings will lean towards a higher end price. Each dish on our menu is priced to maximize our sales and profitability, and at the same time is reflective of our quality service. Nostalgia will achieve a gross profit margin of between 62 & 65%. Some of the items are less labour intensive to create, some are more. For example:

For example, when evaluating Food Costs of specialty items such as seafood:

Food Cost Selling Price Food Cost %Gross Profit

Halibut 2.75 12.79 21.50% 10.04King Crab Legs 7.5 20.75 36.40% 13.29Salmon 6.42 18.99 35.60% 11.57

Even though the crab legs have a greater food cost, you will see that they also have a greater profit.

We hope to serve between 60 & 70 customers per day between 11 a.m. and 2 p.m. The majority of this customer base will be served during the lunch hours. Average check will be about $10.00-12.00 per person.

The average check for fine dining will be approximately $50.00 per person. This is based on a meal, beverage and a dessert.

Revenues are projected to increase steadily over the next 5 years, as per the Canadian Restaurant and FoodServices Association, by 4.1% annually. Yearly sales are available in the Finance Plan.

The restaurant has 10 tables and at max capacity can serve 44 people. Fine Dining Servers can handle 4 tables each. Ideally, we would like to turn the tables during all 3 reservations, but this would mean 132 customers per evening which is not likely except perhaps on special holiday evenings such as Christmas or New Years. Our busiest times will be Wednesday through Saturday evenings, where we may possibly turn the table twice for approximately 88 customers. We have averaged out the week at 44 customers during the day and 44 customers during the evening, allowing for quieter nights earlier in the week, and busier nights towards the weekends.

19

Page 21: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

4.6 Positioning

Nostalgia Bistro offers a sense of place to its customers, providing enjoyable fresh and home-made comfort foods for the lunch and coffee crowd, and a sophisticated fine dining experience, with a European flair, for the evening crowd.

20

Page 22: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

Finance Plan

21

Page 23: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

5.0 Finance Plan

5.1 SalesNostalgia’s sales are projected to be $954,800 in the first year of operations, scaling up to 1.3 million in the fifth year, based on an inflation rate of 2.5%. Canada’s economy is strong and according to the Canadian Food……the sales in the restaurant industry are expected to increase at 4.1% annually.Lunch time sales will generate revenue of 184,000 in 2013. Supper sales will generate $770,000 in 2013. This projection is based on 44 customers per day for lunch and 44 customers in the evening. It also based on a customer growth rate of 10% the second year, and 5% each of the following years. Nostalgia’s lunch specials can expect to generate approximately $10-12 sales per customer. Evening dining chits will total approximately $50 per person. This would include a meal, desert and one alcoholic beverage. Earlier in the week we expect that our sales may be slightly lower for evening dining. However, we are very confident that these numbers will double for evenings mid-late week. During Christmas time and other special occasions such as New Year’s Eve, Valentine’s Day, we expect an even larger increase in the fine dining numbers. Our break-even is 60 customers per day in total, 30 for lunch, and 30 for supper.

Lunch 2013 2014 2015 2016 2017

#Customers 44 48 51 53 56

#Days Open 350 350 350 350 350

Avg Purch 12.00 12.30 12.61 12.92 13.25

Sub Total Sales

$184,800.00 $208,372 $224,250 $241,349 $259,751

Supper

#Customers 44 48 51 53 56#Days Open 350 350 350 350 350

Avg Purch 50.00 51.25 52.53 53.84 55.19

Sub-Total Sales

$770,000 $868,175 $934,373 $1,005,619 $1,082,298

Total Sales $954,800 $1,076,537 $1,158,623 $1,249,968 $1,342,049

22

Page 24: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

5.2 InventoriesMany of our inventories will be used up on a daily basis due to the nature of our business. However, some processed items and non-perishable items will be in inventory for approximately 10 days. Nostalgia has a 67% profit margin which is average for the industry.

5.3 Capital As explained in the Operations Plan, we as the owners of Nostalgia Bistro are investing $75,000 of our savings into the restaurant and will finance a line of credit in the amount of $25,000 for any incidentals we may need in the first year of operations. We do not anticipate needing to use this line of credit as revenues will be recognized immediately due to the nature of the business and will be used to cover operating expenses.

5.4 Summary of Operating Expenses

Operating Expenses

2013 2014 2015 2016 2017

Lease 39,600 40,590 41,605 42,645 43,711Utilities 22,000 22,550 23,114 23,692 24,284Wages 287,195 309,116 32,7032 346,447 367,507Employee Benefits

34,499 376,14 40,111 42,831 45,796

Marketing Exp 5,000 2,500 2,500 2,500 2,500Janitorial 8,000 8,200 8,405 8,615 8,831Honorariums- Musicians

15,000 15,375 15,759 16,153 16,557

POS System 2,500 2,563 2,627 2,692 2,760Licenses 2,000 2,050 2,101 2,154 2,208Repair &Maintenance

2,500 2,563 2,627 2,692 2,760

Other Variable Costs

19,096 21,531 23,172 24,939 26,841

Capital Cost Allowances

2,800 5,186 4,755 4,420 3,851

Debt Interest 1,750 1,623 1,488 1,343 1,188Total Operating Expenses

$441,940 $471,460 $495,296 $521,123 $548,792

23

Page 25: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

5.5 Management System

Nostalgia Bistro will purchase a Point of Sale system that will assist the manager in ordering inventory, scheduling, keeping track of sales, and pinpointing discrepancies to avoid losses. The POS systems will allow the bistro to accept Visa, MasterCard, Interac Direct Payment, American Express and other major credit cards, providing us with one comprehensive point-of-sale solution to meet all of our business needs and speed up transaction processing time.

5.6 Customer Break Even AnalysisNostalgia must serve 60 customers per day in order to breakeven. We are confident we can do much better than this.

Base Case Cust/ Day 88 96 102 106 112Breakeven Cust/Day 60 60 60 60 60

1 2 3 4 50

20

40

60

80

100

120

Base Case cust/dayBreakeven Cust/day

24

Page 26: Table of Contents (Formal design) Painter...  · Web viewTABLE OF CONTENTS. Executive summary2. ... 702 14th Street East, in the historic Nutana area of Saskatoon. ... Example: Filet

6.0 ConclusionOur most critical variables will be the number of customers we can serve per day, along with the cost of goods and the cost of labour. Our margins on these variables are very tight and we will need to work hard at our marketing and quality of services in order to compete with others in the industry. We are confident that we can do this, and do have contingencies in place should we run into some difficulties. Plans for contingencies include offering catering services and possibly some take-out services.

All other ratios indicate that Nostalgia Bistro can be a viable and profitable business.

For those who seek an exciting, delicious, elegant and memorable dining experience – Nostalgia Bistro is that place. The Bistro will take great pleasure in welcoming customers to our innovative new venue featuring the finest in globally inspired dishes prepared to the highest of standards. We will invite customers to relax and enjoy our attentive service and elegant atmosphere. We are looking forward to the privilege of sharing our unique approach to the wonderful experience of dining with our new clientele.

25