Business plan for friendship restaurant

BUSINESS PLAN Contents Page No

1. Executive Summary2 2. The Business 2.1. Introduction.3 2.2. Business mission ....3 2.3. Objectives short term...3 2.4. Objectives long term4 2.5. Key personnel 4 3. Markets competition ..5 3.1. Selected market segments..5 3.2. Market segments-growth and size...5 3.3. Customer benefits6 3.4. Competitors..6 3.5. Competitive Strategies 7 4. Selling.9 5. Production plan....9 5.1Locaton..9 5.1. Key supplier.....10 5.2. Quality Control....10 5.3. Staffing...11 5.4. Wages..11 6. Financial data and forecasts...11 6.1. 6.2. Cash flow, profit and loss accounts and balance sheets.11 Financing requirements-loan Over draft....19

7. Conclusion....20

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant

1. Executive summary
Friendship Restaurant will be run as a partnership between (Seyoum Zeru, Mohammedawel Nurhsien, Hayelom Kdanu). The 30-seat restaurant will offer a vegetarian menu and a non-vegetarian menu at lunchtimes and in the evenings. At lunchtime, menu will be provided offering snacks, vegetarian dishes, salads and non-vegetarian dishes. For local business people, shop workers, shoppers and students. The service at lunchtime will be quick, allowing for a high volume of customers. In the evening the vegetarian menu will still be offered but a menu including popular dishes such as steak, chicken and fish will be well presented and served with a selection of unusual sauce and dressings. The market aimed in the evenings will be professional people between the ages of 18and 30 years. All the food used in Friendship restaurant will be additive free and natural based. The lunchtime service will enable customers with a limited lunch break to enjoy their meal within the time they have, the restaurant being only a short walk or drive from where they work or shop. Car parking facilities will also be available. A full section of bar drinks and wine list will also be offered. The forecast average spend at lunchtime is Br 30; no more than a pub lunch but providing an alternative to the noisy crowded and limited menus of pubs. The forecast spend in the evening is Br. 50 including soft drink, which is well within the range of the young age group. Also provided in the evenings will be some live jazz and blues music such as piano or saxophone to provide fairly sophisticated background music and atmosphere. In the first year we forecast a loss of Br around 4000; this mainly use to initial startup expenses and high advertising expenses in order to attract customers at an early stage. In years two and three we predict a healthy profit due to a 10 percent increase in sale each year and reduced loan interest in these periods. Due to the healthy case position at the end of year 3 we would expect to be able to repay the outstanding balance on the loan at the end of year 4. The overall objectives of the business are firstly to achieve and exceed sales forecasts to enable us to be operating at capacity, so that we can extend our opening hours to include morning coffee and afternoon teas. We would also aim to be able to employ several full- time members of staff and build up a team so that the partners can be clear of routine tasks and concentrate on day-to-day problem, meeting customers, mounting promotions and supervise the general running of the restaurant in order to build up the business further. After five year we would hope to set up a similar operation in another area.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant The business will require an initial loan of Br 20,000 repayable over 5 year to covert the premises, equip the restaurant and pay initial administration, An overdraft facility of Br 3,500 will also be required according to cash flow forecasts to finance working capital. Achieving forecasted sales in the first year, we would be able to repay the overdraft by the end of the year, and also pay the interest on the loan, enabling us to start repaying the loan in the second year of trading. And also we are considering each partner has Br 10,000. That will be total of Br 30, 000 for reserve and running of business.

2. THE BUSINESS
2.1 Introduction A Business plan for friendship restaurant partners: - Seyoum zeru - Mohammedawel nuruhusien - Hayelom kidanu We have lived in the Mekelle area all our lives and through our own experiences and interest in the subject realized that there are no restaurants for young people that provide lively, fairly sophisticated atmosphere at prices young people can afford on the AYDER area, i.e., a meal with soft drink for Br. 30 or under. We also discovered, after conducting some preliminary market research, that there seemed to be a lack of somewhere; where people working or shopping in the area could go for a quick lunch or snack spending only a couple of Birr on dishes other than filled rolls or sandwiches or the usual fried bar snacks. 2.2Business Mission To start up and run friendship restaurant in the AYDER area providing a menu based towards healthy eating offering cheap lunches for local business people, shoppers, university students, workers and a varied interesting menu in a young lively sophisticated atmosphere for young professional people from morning to the evenings. 3.3Short-term Objectives - To find and convert suitable freehold premises to a 30-seat restaurant with adequate kitchen, bar dining, storage and car parking facilities. - To build up a regular clientele, achieve forecasted sales, advertising& promotion and by the product itself. i.e., Friendly efficient service and well cooked and presented food, resulting in a meal that reasonable by being good value for money.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant 4.4Long-term Objectives To be able to employ full-time members of staff to build up a reliable and hard-working team in the restaurant, enabling the partners to concentrate on the dayto-day problems, to meet customers and suppliers, mounting promotion and supervising the general running of the restaurant in order to build and expand the business further. After five years we would hope to purchase second site in a different area and set up similar operations and by continuing hard working to expand to standard hotel tourism. 5.5 Key Personnel Ato bezabih mesele Age 24

Alevel qualification in Food and Nutrition, Bsc Degree in Hotel, Catering and Tourism Management from a highly reputed university. Practical experience A gained from a variety of establishments including pubs, pub restaurants and fast food restaurants. Tibletse girmay Age21

Catering experience from a variety of catering outlets ranging from institutional catering to pubs, wine bars and restaurants. She has a good working experience of local suppliers, professional advisors and book-keeping experience Aynalem teame Age 27

Financial advisor. Has run own successful business consultancy for 2 years and has valuable experience in finance, VAT and book-keeping. Mesfin halefom Age 32

BSc. In hotels management, has 3 years experience in general running of high class restaurants and bar.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant

3. Markets and competition

3.1 Selected Market segments Segments aimed at lunchtime: Shoppers-Predominantly housewives aged 30-60 years, socioeconomic group-middle income living within a 10-kilometers radius of Ayder. Local business peoples, office workers and employees working locally. All age groups, local shop workers-any age group, university students, young professional people ---- full employment, for example bank clerks, office clerks, trainee management, living and working in the area or commuting to Mekelle to work. Most have high disposable income to spend on eating and drinking out. 3.2 Market segments-growth and size According to the Survey for spare time Intelligence on eating out: Restaurant eating has fallen off among those over 45 years old and conversely risen among the young. The young have now become almost as important a group of restaurant users as their elders. Reasonable price, nice atmosphere and especially being in the mood for a particular type of food are all important among younger adults. Population figures for the Region and Mekelle and its surrounding estimate predict that bucks will remain growing. The total population of 15-19 year olds in Ayder and its surrounding (10 kilometers radius of Ayder) is supposed to be 31,498 We conducted a market research survey on 195 young people between the ages of 18 and 30 whom where resident in Mekelle. Out of 195 people asked, 77.4 percent said they thought there was a need for a budget priced restaurant in the area. 30 percent of this age range regularly eats vegetarian food. The largest percentage, 57.4 percent, spend between Br 20-Br 25 a head on a meal out in a restaurant. The most popular type of restaurant was Steak Houses, closely followed by wine bar bistros. 31 present eat out once a month while 30 percent eat out more regularly (once a week). The most popular socioeconomic grouping for people questioned was middle income-skilled workers; those with highest disposable income for the lunchtime market we questioned 160 shoppers resident in the area, shopping at--- shopping centers in Ayder area and surrounding villages and towns. percent of those questioned were housewives and 85 percent said they feel there was a need for a restaurant providing quick snacks and lunches both vegetarian and non-vegetarian. 61 percent of those questioned ate vegetarian food at some time. 68 percent said they were concerned about additives in the foods they ate. The most popular range for lunches out was between Br20 and Br. 25 (31 percent). We also question 72 companies in the area, 75 percent said employees at lunch out at sometime, the most popular venue being pubs. 66 percent said they would use a budgetpriced restaurant offering snacks and set lunches.
Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant

3.3 customer benefits Lunchtime 1. We can offer a snack lunch or a set meal which is an alternative to the usual filled rolls and fried pub lunches. 2. We will also be catering for the ever increasing (see section 3.2) vegetarian and health consumers market by providing food that are natural based and additive free. 3. Our average spend at lunchtime is forecasted to be Br 20, which is not more expensive than the average pub lunch and considerably cheaper than most wine bar lunches. 4. The service provided will be quick and efficient to accommodate the average businessmans lunch break and for a shoppers snack. Evening 1. We will offer the usual popular meat and fish dishes served with varied and unusual sauces, dressings and garnishes. 2. We will provide a fairly extensive vegetarian menu for the health conscious and for those who wish to be a little more adventurous. 3. Our average spend in the evenings is forecasted to be Br.50 including wine, which is considerably cheaper than the majority of restaurants in the area and consequently is good value for money. 4. The atmosphere in the evenings will be lively and sophisticated and this will be--by the use of live jazz and blues music and by friendly cheerful service. 3.4 competitors Primary competitors These are restaurants that offer a similar product or service; Examples are some locally located at ayder area restaurants, the major difference being the lack of vegetarian dishes provided on their menu. Instead they offer a wide selection of salads. The price, atmosphere and markets they serve are similar to those we are aiming for. The nearest outlets of this type are located in Mekelle. The strengths of these restaurants are that they are well established, large, and usually some of them in prime sites. Secondary competitors Steak house: e.g.selam restaurant, Daero restaurant, and other Bucher houses. - strength and Weakness Strengths Consistent quality of food and service with in a known price bracket operate on a tried and tested formula. Branding very notable customers (source survey 1999) men aged 2564, mainly higher income, group and business entertaining and families.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant

Weakness No variation on menu or service, limited menu standardize decor, atmosphere unappealing to youth market. Wine bar/bistro Strengths Often have interesting alternative dishes on the menu designer decor and a wide range of wines. Generally have a young appeal in the evening offering an informal atmosphere. Weakness Widely varying standard of food and service, often expensive for what is offered as food is used to create extra revenue above the sale of wines. Wines are often fairly expensive, limited menu to country of origin, mainly meat based fairly in Ayder area and generally unsuitable at lunchtime. Many young people eat there for the late opening hours only. 3.5Competitive Strategies i) Price Based on market research we have concluded that there is a gap in the market for a budget priced restaurant. Price is based in a general 30-50 percent food cost. Priced as follows; Sandwich Snacks Vegetable Donuts Coffee& tea Wine Average Br3.50 Br8.00 Br3.00 Br2.50 Br 2.00 Br 16 Br 35

However; it is usual in catering to vary the food cost from one item to another. Soup, starter, desert and coffee =30% of food cost Main course and more expensive items = 50% of food cost Wine and alcohol= 50% of material cost Therefore price is double the cost. Dinner Item Sandwich Snacks Vegetable Donauts Coffee &Tea Price Br. 3.50 8.00 3.00 2.50 2.00 Material Cost Br. % 1.05 30 4.00 50 1.20 40 1.00 40 0.4 20 Gross profit Br. % 2.45 70 4.00 50 1.80 60 1.50 60 1.60 80

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant Wine Total Dinner Item 16.00 35.00 Price Br. 10.00 5.00 15.00 8.00 15.65 50 44.7 8.00 19.5 50 55.3

Lunch dish/ Dinner Beverage Total ii) Promotion

Material Cost Br. % 3.00 30 2.50 50 5.50 36.6

Gross profit Br. % 7.00 70 2.50 50 9.50 63.4

Operating party To include local opinion formers, i.e. Councilors , local member of parliament as well as the main political customers , also members of the press, senior marketing and sales people , advertising agents , travel and state agents , bank manager and leaders of industry ,for public relations purposes we would also invite our neighbors. Fliers and Posters -In local shops, offices and industry. Press release -In local news papers Value added promotions That is, free glass of wine with a meal during slack periods; one meal in ten free for special groups or complementary birth day cakes for celebration parties. Special promotions Seasonal menu changes and special dishes, Themes to mark dates such as St valentines day Christmas , New year, Eastern, Sunday, and other holidays. Themes based on particular types of food. Advertising In regional and country magazines, radios, TV, news papers and in local papers Leaflet drops Hand bills distributed doors-to-doors by local news agents with the normal delivers. iii) Place AYDER area and the surrounding villages and towns comprise a pocket of wealth in Mekelle. The population is made up of: a) The elderly and retired. b) Middle aged people socioeconomic groups: lower income, middle income, higher income. c) Students of AYDER campus.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant

The Menu We will offer a range interesting snacks, both vegetarian and non-vegetarian. The lunch and dinner will be divided in to vegetarian and meat section. Popular dishes will be included but will be served with a range of different and unusual sauces, accompaniments and garnishes. We also hope to offer a varied section of salads and homemade vegetables. As many as possible of our dishes will be home made using natural additive free ingredients, for example kikl, kitfo, Tihlo, whole meat flour, brown rice, whole meal pasta, vegetable fats. All lunch time we will offer a set price lunch with a choice of vegetable, meals and sweet, as few people require a three-course lunch these days. Offered also will be salads and snacks such as packet potatoes with wholesome fillings. All bar drinks will be available and selection of wines offering a choice of Ethiopian, French, Germany and Italian wines. We would also like to provide a selection of homemade fruit based wines and Tej. Atmosphere Lunchtime Busy atmosphere with fast service and high volume of customers can be enhanced by the use of fast tempo, classical music playing softly in the background. Evenings Slightly more relaxed atmosphere but still live with live jazz blues piano music or saxophone music a background also providing a centerpiece attraction.

4. Selling
In- house sales a) The food-our most powerful sales weapon will be itself, attractively presented displayed, it should help itself, e.g. .., salad bar, self-service, able or counter. b) The menu-which will be attractive, clear, easy to read and understanding and honestly priced with no hidden extras, c) Service staff-should have friendly, welcoming, helpful attitude they can boost sales by assign the right questions at the right times. d) Extras aperitifs, starters extra vegetables, wines, coffees, liquors, brands, cigars, are all potential sales and need to be actively of me sold. e) Changes and novelties; new dishes, new ideas, new table decorations. Point of sale literature to draw attention to changes, e.g., table cards, bulletin boards by the entrance, poster in the window.

5. Production plan
5.1 Location i)Suitability for market Easy to get to with passing traffic and shops and business close by preferably away from residential areas because of parking and noise constraints.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

30-05-2012

Business plan for friendship restaurant ii) Size The four main areas of space needed are; Seating of customers Food preparation Storage other-delivery, gust WCs /water closets/, rubbish, office space For a 30-seat restaurant Area Dining Food preparation Storage Cleaning/wash-up Guest cloaks Staff WC 5.2. Key suppliers i) Butcher - Kahsay Tsegay is good quality Provider of Goats and Sheeps. ii) Daily goods-local daily Fruit and vegetables-local greengrocer iii) Dry good cleaning materials Zewdu household shop. iV)Equipment - Various suppliers 5.3. Quality Control a) Checking cost and testing i. To give a standard recipe to work to ii. So customers are given a constant product iii. So food costs can be checked exactly iv. Different ingredients and different qualities can be tested v. To enable us to specify accurately the raw materials to be purchased. vi. To test one yield of each batch of ingredients vii. To help divide the portion sizes for each item viii. To establish the waste on items in preparation and cooking % of total 50 20 10 7.5 7.5 5 Sg-ft 450 180 90 67.5 67.5 45 Total 900 Sq.ft

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant B. Checking of deliveries Check for - quality - Portions - Size, e.g., eggs, steaks - Damaged goods. 5.4. Staffing This business will be run by the qualified employers. And we are involved as managing, supervising and taking follow up at the evening from Monday-Friday.and half day on the Saturday and full day on Sunday working for one week. 5.5. Wages Br. 2.00 per hour, for 4-hour shift lunch time and 5-hour shift evening 6.30 11.30 p.m. plus tips.

6. Financial data and forecasts

6.1. Cash-flow for first year - assumptions 1. Sales forecasts based on a 30 seat restaurant in AYDER area. First month estimated to be high due to opening advertising movement, opening party and initial interest. Second month will be lower as traditional February is a quiet month in catering. Peak time is in 12th month (December) due to Christmas. 2. Drawings @Br.50 per weak each, national insurance is included in the wages figure. 3. Food and drink purchases @ 40% of sales. 4. Rent is based on our fathers mort-gage repayment on free hold premises @15% interest on Br.100, 000 150,000. 5. Rates estimates to be Br 3,000.p.a 6. Wages @ Br.2.00 per hour. 4- Hour lunch shift, 5- Hour dinner shift Based on employing part- time will have kitchen help for the first 6 months on Friday and Saturday evenings and one week night, also Sunday lunch. =3 nights = 15 hours 1 lunch = 4 hours 19 hours @ br.2.00 = Br.3 8.00 per week = Br. 152.00 per month

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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30-05-2012

Business plan for friendship restaurant After 6 months we would hope to employ a restaurant helper as well, both kitchen and restaurant staff would be employed for Friday and Saturday nights and Sunday lunch, only cutting one week - night help. 2 nights 10 hrs*2 = 20hours 1 lunch = 4hrs*2 = 8 hours 28 hors @Br.2 per hour Br.56 per week Br.224 per month 7. Loan interest on a Br.20,000 5-year-term loan @ 14% interest = Br.2,800. 8. Loan repayment delayed until second year. 9. Overdraft interest worked out on the highest over draft figure for the quarter @ 15% interest Monthly cash flow statement for year of trading including VAT excl. income tax Month 1 Receipts least sales Total receipts Payment VAT (payment) Accountants fee Repair costs Petrol/motor expanses Drawings Food & Drink purchase @40% of 4830 4830 2 3 4 509 6 509 6 5 562 8 562 8 6 616 0 616 0 132 1 7 690 2 690 2 8 737 8 737 8 9 785 4 785 4 173 2 10 806 4 806 4 11 812 0 812 0 12 849 8 849 8 193 3 5916 75586 Total

2968 408 8 2968 408 8 930

100 400 1932

100

100

100 400 203 8

100 400 225 1

200 100 400 246 4

100 400 276 0

100 400 295 1

100 400 314 1

100 400 322 5

100 400 324 8

100 400 339 9

200 1200 4800 30231

400 400 1187 163 5

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant sales Heat & Light Rent Rate Tel. & Post Advert & Printing Wages gross Sundries Capital costs Loan interest @ 14% overdraft int. @ 15% Total payment Opening Bank bal. Surplice deficit Balance C/fwd 4617 1293 213 1506 3872 570 0 1506 602 904 602 161 2 101 0 472 3 101 0 373 637 493 6 637 692 55

1250 250 200 152 100 233

350 1250 125 250 200 152 100 233 0 250 100 200 152 100 233

125 0 250 200 152 100 233

125 0 250 200 152 100 233

350 125 0 250 100 200 152 100 200 233 247 756 7 55 140 7 135 2

125 0 250 200 224 100 233

125 0 250 200 224 100 233

350 125 0 250 100 200 224 100 233 203

125 0 250 200 224 100 233

125 0 250 200 224 100 233

350 125 0 250 100 200 224 100 233

1400 15000 3000 400 2400 2256 1200 200 2796 450

551 7 135 2 138 5 33

570 8 33 167 0 170 3

828 3 170 3 429 127 4

598 2 127 4 408 2 335

600 5 335 6 211 5 547

903 9 547 1 541 493

6 1 0 Balance carried forward 4,930 ______

Profit and loss account for year 1 Br Sale (net of VAT) Less cost of sale Opening stock sock Purchase Less closing stock Cost of sales Gross profit Less expense Planning permission
Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

Br. 65,727

500 26,288 500 26,288 39,439 50

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Business plan for friendship restaurant Accountancy fees Solicitors Advertising Printing Heat and light Insurance Motor vehicle expenses Sundries Repairs and maintenance Depreciation Telephone Drawings Wages Rents Rates Loan interest Overdraft interest 43,401 Loss before tax Opening balance sheet Br Fixed assets Stock Cash 500 1,293 1,793 14,853 20,000 5,147 Loan Br 13,060 (3,962) 450 700 600 3,400 200 1,400 500 1,450 1,400 2,347 2,652 400 4,800 2,256 15,000 3,000 2,796

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant Represented by Br. Expenses to data institution 5,147

Balance sheet as at end of year-___________________________________ Br Fixed Asset; Less Depreciation Stock Cash Loan Creditor 2,652 500 4,930 5,430 (20,000) (14,570) 3,962 Loss in first of trading Quarterly Cash-flow for second year assumption 1. Assume sales increase by 10 % 10% increase in sales=Br 7,559 Therefore Total Sales for the second year =Br 72,379 Br 83,145 Jan, Feb, March, Apr, may, June, July, Aug, Sep, 22,134 8% inc. 23,905 Oct, Nov, Des 24,682 4% inc. 25,670 3,962 Br 13,260 10,608

First year quarterly sales figures Total Sales 11,886 16,884 22% increase 14,501 30% inc. 19,079

=Br 83,155=10% overall increase. 2. Assume costs increase by 3% (rate of inflation) 3. Drawings increased from Br. 50 per week each to Br. 60per week each =Br. 480 per month =Br. 1.400 per Quarter
Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant =Br. 5.760 per annual. 4. Capital costs doubles for extra equipment =Br. 400 5. Loan repayment Br. 20,000 over 4 years Br. 5,000 per year Br. 416 per month Br. 1,248 per Quarter 6. Loan interest calculated @ 14% on outstanding loan at end of each quarter. Cash-inflow for third year assumptions 1. Assume sales increase by 10% 2. Assume costs increased by3% 3. Drawings increased to Br. 70 per week each = Br. 140 per week = Br. 560 per month 4. Wages increased by 5% 5. Capital costs Doubled for extra equipment =Br. 800 6. Loan repayment still Br 1,248 per quarter paid at beginning of each quarter. 7. Loan interest calculated $ 14% on outstanding loan at end of each quarter. Quarterly cash-flow statement for second year of trading Q1 Q2 Q3 Q4 Total Receipts Restaurant Total receipts Payments VAT(payment) Account fee Repair costs Petrol motor expense Drawing @Br.60p.w. each Food & Drink purchase @40%sales Heat & light Rent Rate Telephone &postage Advertising & print Wages Capital Costs Loan payment Loan interest Total payment Opening bank balance Surplus / Deficit Balance / fws 14,501 14,501 1,135 309 1,440 5,800 360 3,862 772 103 618 581 1,248 656 17,193 4,930 (2,692) 2,238 19,079 19,079 1,493 206 309 1,440 7,632 360 3,862 772 103 618 581 400 1,248 613 19,946 2,238 (867) 1,371 23,905 23,905 1,871 309 1,440 9,562 360 3,862 772 103 618 581 1,248 569 21,604 1,371 1,672 25,670 25,670 2,009 515 309 1,440 10,268 360 3,862 772 103 618 581 1,256 525 22,927 3,672 2,301 6,415 83,155 6,508 515 206 1,236 5,760 33,262 1,440 15,448 3,088 412 2,472 2,324 400 5,000 2,363 81,670 2,743 3rd year 91,471 91,471 7,159 530 212 1,273 6,720 36,588 1,485 15,913 3,183 424 2,546 2,440 800 5,000 1,663 87,209 6,415 6,415

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant Balance c/f 5,415 10,677

Profits and loss accounts Year-2

Sales Less cost of sales Opening stock Purchase Less closing stock Gross profit Less expenses Accounts fee Repairs Motor expenses Drawings Heat & light Rent Rates Telephone & post Advert. &printing Wages Sundries Loan interest Depreciation Profit for year Retained earnings b/f Retained earnings c/f Fixed assets: Less depreciation Stock Cash Loan Represented by: Retained profit Br. 72,309 500 28,924 500 28,924 43,385 515 206 1,236 5,730 1,440 5,448 3,088 412 2,472 2,324 1,236 2,363 2,732 (39,232) 4,153 (3,962) 191 13,660 (53,384) 500 6,415 (15,000) (8,085) 191 191 500 10,667 (10,000) 530 212 1,273 6,720 1,485 5,913 3,183 424 2,546 2,440 1,273 1,663 2,892 (40,554) 7,170 191 7,361 14,460 (8,271) Br. Br. 500 31,816 500 31,816 47,724

Year-3
Br. 79,540

1,777 7,361 7,361

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant

Breakeven of loan expenditure

Total number of meal sold in 1st year at average prices of Br 20 Cost of one meal Therefore gross Profits Therefore gross Profit =10,660 =Br. 213,200 =8.70 =Br. 8.70 x 10,660 =Br.92,742 =Br. 213,200 Br. 92,742 =Br.120,458 =GP x 100 Sales = Br. 120,458 x 100 =56.5% Br.213,200 =Br.68,058 =overhead x 100 G.P Margin =Br. 68,058 x 100 56.5 =overhead x 100 Scale = 68,058 x 100 213,200 =31.9%

Overhead (Fixed cost) for 1st year Therefore the Break-even turnover

= Br. 38,452

Breakeven gross profit margin

6.2 Financing requirement-loan overdraft In order to find the initial requirements of the business we would require the following finance:
1. Long term loan (5years) Br 20,000 This loan will be used for: A) Purchase of restaurant, bar and kitchen equipment B) Initial Shoulders and Accountancy fees C) Purchase of dry goods and stock D) Pre-opening advertising

2. over draft factory (Short-term) Br. 1,500

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant These facilities will only be requiring for the first six months of trading to of finance necessary working capital requirements.

Breakeven of loan expenditure

Br Loan Expenses Planning permission solicitors Accountant Advertizing Printing Insurance Tax and Insurance sundries and extra Restaurant repairs & Maintenance Kitchen Repair & maintenance expenditure Items Capital additions Van Restaurant equipment Kitchen equipment Stock Cash remaining Br Br 20,000

50 600 200 1,00 0 200 500 250 200 1,62 8 519 5,14 7 2,00 0 7,83 3 3,22 7 13,060 500 1,293 20,000

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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Business plan for friendship restaurant

7. Conclusion
Friendship restaurant will be run as partnership between Seyoum Zeru, Mohammedawel Nurhsien, Hayelom Kidanu. We are living in Mekelle city for along time and through out our research and interest in the subject realized there are no more restaurant for young people to eat out at the evening that provide a young, lively fairly sophisticated atmosphere at prices young people can afford, i.e. a meal with wine for Br 30 or under. The business will require an initial loan of Br 20,000 repayable over 5years to convert the premises, equip the restaurant pay initial administration fees. An over draft facilities of Br 3,500 will also be required according to the cash flow forecasts to finance working capital.

Prepared By: Seyoum Zeru Hayelom Kidanu Mohammedawel Nurhsien

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