Sarhad Paar Restaurant

Business Idea Report

Submitted To: Mr.Yasir Qureshi

Submitted By: Aroosa Safdar 11-4304

Hanana Shazad 11-4304

Ehsan Abid 11-4677

Ahmad Hasnain 11-4052

Date of Submission: November 13, 2012

Sarhad Paar 2012

Contents

EXECUTIVE SUMMARY................................................................................................................................. 3INTRODUCTION........................................................................................................................................... 4

RESTAURANT BUSINESS...........................................................................................................................................4INDIAN FOOD RESTAURANT......................................................................................................................................4PERCEPTION OF INDIAN FOOD..................................................................................................................................4MARKET RESEARCH................................................................................................................................................4LOCATION............................................................................................................................................................5MISSION STATEMENT.............................................................................................................................................5STARTING BUSINESS...............................................................................................................................................5INITIAL INVESTMENT...............................................................................................................................................5MANAGEMENT......................................................................................................................................................5WORKFORCE.....................................................................................................................................................5OPERATIONS.........................................................................................................................................................6RESTAURANT ATMOSPHERE.............................................................................................................................6

MENU LIST................................................................................................................................................... 7

SARHAD PAAR SPECIAL............................................................................................................................................7CHAT PATA CORNER...............................................................................................................................................7VEGETARIAN DELIGHTS...........................................................................................................................................7CHAWAL (RICE).....................................................................................................................................................7CHICKEN DISHES....................................................................................................................................................8SIDE ORDERS........................................................................................................................................................8DRINKS................................................................................................................................................................8

MARKETING PLAN & SALES STRATEGY........................................................................................................ 8

TARGET MARKET...................................................................................................................................................8MARKETING MIX: 4P’S...........................................................................................................................................8SWOT ANALYSIS...................................................................................................................................................9

FINANCING................................................................................................................................................ 11

EXPENSES........................................................................................................................................................11REVENUE STREAM...........................................................................................................................................11NET INCOME...................................................................................................................................................11FISHBONE CHART OF REVENUE STREAM:.......................................................................................................12

FINANCIAL STATEMENTS........................................................................................................................... 12

BALANCE SHEET AS AT 1 JANUARY 2013.................................................................................................................13INCOME STATEMENT FOR THE YEAR ENDING 31 DECEMBER 2013................................................................................14INCOME STATEMENT FOR THE YEAR ENDING 31 DECEMBER 2014................................................................................15INCOME STATEMENT FOR THE YEAR ENDING 31 DECEMBER 2015................................................................................16

CONCLUSION............................................................................................................................................. 16

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EXECUTIVE SUMMARY

Lahore is one of the famous cities specially recognized for its tastes and chillies. People are

always seeking new varieties of food so to cater such need there is a strong opportunity to

introduce new set of dishes for providing a complete new taste to enjoy.

Sarhad Paar is introducing a new taste of Indian food. Our main purpose is to introduce

and develop some new tastes among the generation comprising of items with low calories and

intimate delight. We are offering a list of items which are easily affordable for students as

well as for people belonging to different classes. The unique point is that our dishes are not

common in our cities and these are mainly famous in India.

Our main specialty is the low price with quality product that brings the customers to our place

for relaxing and entertaining themselves in their leisure time. Some of our unique dishes are

Dosa, Idli, mughlai chicken and Bhail puri.

Our management team is comprised of two expert chefs along with two helpers. There will be

ten waiters to serve the customers. Comfortable chairs and tables will be provided to make a

pleasant visit for our customers.

The marketing would be done through brochures and attractive banners. We will allocate 5%-

10% of our sales to marketing. Besides this, we will also promote our dishes through

magazines. Special offers will be given on special occasions.

Finance will be equally provided through the four partners and remaining will be financed

through bank loan for the total capital cost of setting up the new restaurant. The major cost of

Initial investment will be the cost of approval for hotel business from local government,

rent/security of the building, the renovation cost, cost of kitchen utensils and equipment and

furnishing cost of the restaurant

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Sarhad Paar 2012

INTRODUCTION

Restaurant BusinessWhile thinking of opening a business in Lahore, the first option that came in our mind was of opening a restaurant. Lahore is one of the famous cities specially recognized for its tastes and chilies. People are always seeking new varieties in tastes and dishes so to cater such need there is a strong opportunity to introduce new set of dishes for providing a complete new taste to enjoy.

Indian Food restaurantWe decided to open an Indian food restaurant because there are no Indian restaurants in the existing market. So there would be no competitors. Through a survey we have concluded that there is a demand in the market for Indian foods. As many people from the media are attracted towards the Indian dishes like pav bhaji etc. specially women’s who are fond of cooking and they watch Indian dramas are very much attracted towards those Indian delicious dishes. Visitors from India would also be attracted from our Indian restaurant. Recently, India & Pakistan is going to be in agreement for import and export & also allowing visas on very relaxed policies. So in near future the traffic of the people from India to Pakistan is going to be increased and in this scenario the Indian visitors would like to have Indian food in Pakistan. Food in our restaurant would be totally HALAL.

Perception of Indian FoodWe were of the idea that there might be a negative perception of Indian food here in Pakistan. The only reason behind it is that it’s an INDIAN food restaurant. Traditional rivalry between Pakistan and India does not mean that we have to associate this hatred with every single matter. In India there are many Pakistani restaurants for people who are there from Pakistan so why opening an Indian restaurant here in Pakistan is not favourable. Similarly in Pakistan there are Chinese restaurants, Thai restaurants operating successfully then why not a restaurant offering Indian dishes. So we are optimistic about the success of this idea.

Market ResearchThis novel idea of opening an Indian restaurant needed a research before this business idea is implemented.

Research objective: Our objective was to find out whether the local pubic would like and welcome the new tastes and varieties of food from India.

Developing the research plan:In developing the plan, we conducted a survey through questionnaire. It also included online questionnaires on social networking websites. The sample population was the public around faisal town. The questionnaire is attached at the end of the report.

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Decision making: The collected data was analyzed on the basis of which we decided that local public would like the introduction of new tastes of food in the city of Lahore. It was decided that this business idea would be profitable.

LocationWe have decided to open our restaurant in Faisal Town Lahore. After surveys we concluded that it’s good to start our first branch from this location and then with the passage of time we will open branches in other areas of Lahore too.

Mission Statement“We want to provide the highest quality and variety of Indian food in town with best

customer service”

Starting BusinessThe first step towards starting a business was to take permission of opening this restaurant from city district govt. Lahore. We paid 90000 to get this approval and we have to pay this approval charges every year.

Initial InvestmentSarhad Paar is currently a creative idea of its four members. It is a partnership among four people. Aroosa Safdar, Hanana Shazad, Ehsan Abid & Ahmad Hasnain. Each of us will invest 5 lac and we will take a loan of 1 million from bank. Our total initial investment would be 3 million. This initial investment would be utilized in business approval charges, advance of acquiring a building on rent (double story), vehicle for home delivery, a generator, kitchen utensils and fixture & fittings.

ManagementSarhad Paar is a restaurant managed by four partners. These partners represent sales and marketing, management, finance, administration and operational areas. Comfortable chairs and tables will be provided to make the visit pleasant for our customers. Because of our expert chefs and quick service of waiters, customers will not have to wait for long to get their order.

We will not add additional overhead until absolutely necessary. This will mean that the initial staff support team will have to work extra. By doing this, we will keep our overhead as low as possible, allowing us to adequately staff our outlets. This will also allow us and future business partners to earn investments as quickly as possible and enjoy a higher return.

WORKFORCEOur workforce will comprise of two groups

Kitchen staff Serving staff

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In our kitchen staff we will hire two expert chefs along with two helpers each. There will be ten waiters to serve the customers. We will develop a complete standard for hygiene and quality so that our objective of providing quality food can be maintained.

For serving staff, we will hire 10 waiters. Other staff members include 2 sweepers and 1 security guard. Initially we are starting on a small scale in order to excel our skills and capacity for catering a big chunk of customers.

OperationsHours of Operation The restaurant will be open for lunch and dinner 7 days a week. Service will begin at 12:00 PM and end at 1:00 AM.

System & ControlA big emphasis is being placed on extensive research into the quality and integrity of our products. They will constantly be tested for our own high standards of freshness and purity. Food costs and inventory control will be handled by our computer system and checked daily by management.

Food Production The kitchen will be designed for high standards of sanitary efficiency and cleaned daily.

Delivery Food for delivery may be similar to take-out (prepared to order) or it may be prepared earlier and stocked.

RESTAURANT ATMOSPHEREWALLS:

We will design our atmosphere in more artistic way by using a theme of famous Indian building like Taj Mahal. We will design our wall in wavy shape with spot lights in every depression.

DOORS AND WINDOWS:

Our doors and windows will be of glass and Indian heritage building images will be pasted on them that will give a whole effect of Indian atmosphere.

COUNTER AND DÉCOR:

We will arrange our reception in front of the entrance with two receptionists. We will be using round glass tables with comfortable chairs.

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CHIT CHAT AREA:

Along with the normal restaurant area we will also provide a chit chat area, where any group of friends and associates can sit together to discuss or enjoy etc. This area contains big round table with sofas so that bunch of friends can sit in a more casual way if they want.

SERVICE

We will provide a quick service along with quality and standard. Our waiters and attendants will be trained and they would be at least matriculation qualified so that they deal the customers in an educated and polite behaviour.

Beside dine in services we will also provide free home delivery within 7-8 kilometres. In this way our customers can enjoy our food without stepping out of their home. Moreover, it will be very helpful for housewives as they can order the food for any guest or friend with more convenience. After 8 kilometres we will charge a nominal amount.

Menu List

Sarhad Paar special Chat Pata CornerDosa Pav BhajiPalak Paneer DabeliPaneer Tikay Vada PavIdli Dosa Chat PuriAllo ke parathe with butter Bhel PuriMughlai Chicken Dahi Puri

Vegetarian Delights Chawal (Rice)Rajma Mumbai biryaniMutter paneer Rajma ChawalRamatori Sabzi PohaLauki ke kofte SambharDal MakhaniAllo TikiDaal Puri

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Chicken dishes Side OrdersButter chicken ChapatiTandoori Chicken Naan Chicken Saagwala ParathaChicken tikka masala Bhatura

Satu ki rotiAmratsai Kulcha

DrinksMineral waterCokeSprite

Marketing Plan & Sales Strategy

Target MarketSarhad Paar is providing food for all consumers but the target market for us is primarily upper-lower class, middle class and visitors from India and other countries. As our food prices are very reasonable so the upper-lower class is also our target market. We are not targeting the elite class because majority of the population belongs to upper-lower and middle class and they can only afford reasonable prices.

Marketing Mix: 4P’s1. PRODUCT

We will introduce food that are not available at any place in Lahore i.e. idli, dosa. So our food variety would be unique as there are currently no Indian restaurants.

2. PRICING

We will be charging moderate prices as our target market is not the elite class. We are targeting upper lower and middle class.

Our pricing strategy is designed slightly above the cost prices at the start. This difference of the prices would be the price for hygienic and quality food.

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3. PROMOTION

In this era where information moves from place to another in micro seconds, where globalization has created a thirst for information in people, you need to be in your customers mind to survive in the market. A careful selection of the promotion tool has become necessary to survive in the market. Each and every brand is striving hard to be on their customers mind. Promotion is done in two ways. First is above the line (Print media, website) and second is below the line (opening discounts, customer loyalty schemes etc). As for our restaurant, we have selected following tools for the promotion of our food point.

Print Media

The most effective tool for the advertisement of our restaurant is the print media. In print media we are using Newspaper ad and Brochures.

Website

We will also use website for advertising. We will establish link of our restaurant on the website. As the target market is upper lower and middle class and these class uses internet hugely for the information so this promotion tool is also efficient for the promotion of our restaurant. This website will be maintained after the completion of the project.

Social Networking websites.

We will also create a page on social networking websites-face book.

4. PLACE/DISTRIBUTION

The food will be available through dine-in and take away at Faisal Town. We will also provide home delivery service.

SWOT AnalysisSTRENGTHS

Attraction for tourists: Our dining place will be a great attraction for tourists also as it has a different variety of foods and for Indians it will be the first priority as it will provide them food of their taste.

Customer Service: In many service oriented industries such as the restaurants, the primary consideration that causes consumers to return or not return to a business revolve around how they perceive they were treated, and how much time was dedicated to them or to their situation. So our focus will be quick and efficient service and present an atmosphere of competence.

Pricing: Pricing is affordable by masses. A survey shows that average consumer spending on food per day is PKR 300-PKR 800. So the prices are set accordingly that is affordable by the targeted classes

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Weaknesses

Brand development: Establishing a new brand and making it successful is a challenge to us and it is a weakness because developing a new brand which is working on a totally different and novel idea is challenging.

Competition: The indirect competition is another major weakness of ours to climb up the ladder. We will not be facing much direct competition as there are no such restaurants providing Indian variety of foods.

OPPORTUNITY

Competitors: There are no competitors in the existing market as there are no restaurants providing Indian food. So this will help our business to gain market share.

New Taste: Lahore is one of the famous cities specially recognized for its tastes and chillies. People are always attracted towards new varieties of food so to meet such need there is a strong opportunity to introduce new set of dishes for providing a complete new taste to enjoy.

Due to increase in population and larger trend of working women, demand of readymade foods has been increased. Moreover, we will not have to spend a lot of time in introducing new taste to our customers because Lahoris are already spice lovers. They welcome new taste and variety in this segment and our unique menu will fulfil their need.

THREAT

Increasing number of opening new food restaurant and established brand name of international brands, i.e. McDonald, KFC, Pizza Hut etc are indirectly a threat for Sarhad Paar.

LAW AND ORDER SITUATION: The law and order situation in the country is lowering the trend of spending much time in public places e.g.; dining out etc. so increasing security threats may result in less no of customers and eventually less no of sales.

RESISTANCE FROM RELIGIOUS PARTIES: As the restaurant is introducing and promoting variety of foods from Indian culture so there is a probability that it may face resistance from religious groups and they may even spread negative word of mouth about it.

Financing

Each partner will finance 0.5 million initially and rest 1 million will be financed as bank loan

which will be amortized over 10 years time period with 18 % interest rate.

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EXPENSESExpenses will include finance cost, rent of building, business approval charges, marketing, utility bills, wages and cost of material. The payroll of kitchen staff and serving staff will be increasing with the as per market growth rate annually. 5% of the revenue will be spent on the advertisement of the restaurant. About 2-3% of the revenues will be expensed as utility bills.

REVENUE STREAMOur revenue will be generated from six different classifications of products, and we will

provide the products on very affordable prices with very reasonable mark up. Projected Net

revenues for the first three years are based on the assumptions.

NET INCOMENet income will be 10-20% over the period of ten years.

2013 2014 201502468

1012141618

13.6414.902 15.22

14.0415.444

15.8650000000001

0.40.542000000000002

0.645000000000003

Costs (000) Revenue (000) GP (000)

2013 2014 2015

400000

542000

645200

Gross ProfitGross Profit

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2013

2014

2015

13.33%

18.06%

21.50%

Returnt On InvestmentReturnt On Investment

FISHBONE CHART OF REVENUE STREAM:

Financial Statements

Balance Sheet At the start of business Income Statement of the year 2013 Income statement of the year 2014 Income statement of the year 2015

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TOTAL REVENUE

Sarhad Paar special

Number of visitors

Price of each item

Chat Pata

Number of visitors

Price of each item

Vegetarian delights

Price of each item

Number of visitors

Cold Drinks

Number of visitors

Price of each item

Chawal (Rice)

No. of Visiters

Price of each item

Chicken Dishes

No. of visiters

price of each item

Sarhad Paar 2012

Sarhad Paar

Balance Sheet as at 1 January 2013 Non-current Assets

Furniture 150000

Fixture & fittings 500000

Kitchen Utensils 350000

Generator 550000

Current Assets

Cash 50000

Bank 1400000 1450000

Total Assets 3000000

Current Liabilities

Bank Loan 1000000

Capital

Capital Investment 2000000

Total Capital 3000000

Sarhad Paar

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Income Statement for the year ending 31 December 2013Sales 14040000

Less (Direct Cost)

Food Cost 10800000 (10800000)

Gross Profit 3240000

Less Expense

Wages 1200000

Utility Bills 720000

Marketing & Advertisement 50000

Finance Cost 180000

Rent of building 600000

Business approval charges 90000 (2840000)

Net profit 400000

Return on Investment = 400000/3000000*100

= 13.33%

Sarhad Paar

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Less (Direct Cost)

Food Cost 11772000 (11772000)


Less Expense

Wages 1400000



Finance Cost 180000



Net profit 542000


= 18.07%

Sarhad Paar

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Less (Direct Cost)

Food Cost 11880000 (11880000)


Less Expense

Wages 1500000



Finance Cost 180000



Net profit 645200


= 21.5%

CONCLUSION

The marketing, production, SWOT and financial analysis come up to the feasibility of starting a new restaurant. The introduction of new tastes and varieties at affordable prices will be the successful idea to be operated in Lahore.

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Questionnaire

Business idea of opening a restaurant with Indian varieties of food.

1. How often do you dine out with friends and family?a. Once a weekb. Once a month c. Very Rare

2. How likely are you to try any new item of food when dining out?a. Frequentlyb. Rarely

3. Are you ever attracted towards Indian food items?a. Yes b. No

4. Would you try any Indian food varieties if available when dining out?a. Yesb. No

5. Do have any issue trying Indian varieties of food?a. Yesb. No

6. Do you think there is any relation of religion with Indian dishes in restaurants?a. Yesb. No

7. Do you think general public will appreciate the idea of providing Indian varieties of food?a. Yesb. No

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Documents

Sarhad Paar Restaurant