Business Plan for Fastlink Restaurant
Fastlink restaurant is a modern-day convenient fast-food restaurant in the hospitality industry that aims to provide hotel services to the public. It will be a sole proprietorship firm owned by a single individual but managed by different individuals. To satisfy our customer’s needs, we will provide customer-friendly prices to attract more customers and increase sales.
Qualified staff will be employed to enhance efficient service delivery: the manager, chefs, waiters/waitress, drivers, and the cashier. Fastlink restaurant’s services will offer its customers food and drinks services, lodging, and hosting events. The business will also offer food and drinks delivery to the customers and catering services to the customers during events such as weddings, graduations, and funerals.
The primary source of capital to finance the firm will be personal savings and loans from the bank. Reinvestment and pooling back of profits will be an additional source of finance after the start-up and an engine for future growth as indicated in the financial plan. The end goal of any business is to make profits which will be reinvested to the business as there are no stakeholders to share the proceeds.
The financial plan will entail the major sources of start-up capital and the rationing strategy for efficient capital utilization. The capital will be used to acquire or lease the most crucial properties needed to start up the business. The plan will include the projected sales within the five years. The financial plan will also have the estimated profits and losses that will be made in the near future as the business continues with its operations. The break-even points will also be highlighted in the financial plan as well as the balance sheet statement at the end of the fifth year of the business’s operation. All the above estimates/projections will be shown in diagrams and charts and the calculations made to arrive at the figures.
Break-even analysis is one of the components of the financial plan. The analyses try to find out the point where the total forecasted costs will be equal to the total forecasted revenues. This point is used to find out the total number of units cost required to cater to the total revenue in a firm. At this point, the restaurant will neither be making any profit nor any loss.
Assumptions made while determining the break-even analysis
In the next five years, the company is estimated to have total sales of $100,000 and the production cost estimated at 10 per unit, whereas the total selling cost will be at $20. therefore, break-even quantity will be
Break-even quantity = (fixed cost/contribution per Unit)
The chart above illustrates that the total costs are equal to the total revenue at 10,000units. Therefore, when the number of units goes above the 10000units, the restaurant will be making some profits. Also, when the units go below 10000units, the restaurant will be incurring some loss.
Projected sales/Service Income
In the financial plan, there will be an estimate of the sales that are anticipated in the next five years. Proper sales projections will help in making informed decisions about the growth of the restaurant. This can be achieved by properly analyzing the customers’ needs by finding out what foods and drinks they like and at what price and proper assessment of the other established restaurants in the market. My projected sales forecast will be for the next five years, as shown below.
|Units||year 1||year 2||Year 3||Year 4||Year 5|
The chart above shows some of the services that will be offered at the restaurant and the estimated prices of each for the next five consequent years. When the unit costs are multiplied by the total forecasted sales, the total sales value can be determined effectively.
Projected Profit and Loss
Our business’s profit and loss statements will include the estimated amount of money that will be earned in the first five years of our service delivery to the customers. There will be an estimate of the profit that should be attained in the five years so as to increase our income and reinvest in the firm for its growth. The profits realized will be a source of income to the firm and will be used to pay the salaries to the staff and other obligations.
When preparing the profit and loss statement, it is assumed that;
Profit and Loss statements for the year Ending, 31st December
|Particulars Amount ($)|
|Year 1 Year 2 Year 3 Year 4 Year 5|
|Sales 5600 6300 5000 5700 5900|
|Cost of Sales 200 300 250 270 300|
|Gross Profit 5400 6000 4750 5430 5600|
|Salaries/wages 100 100 120 120 100|
|Rent 50 50 50 50 50|
|Marketing 50 100 50 50 100|
|Other expenses 100 10 100 100 100|
|Total Expenses 300 260 420 320 350|
|Operating Income 5100 5740 4330 5110 5250|
Projected Balance Sheet
The projected balance sheet for our financial plan will show the estimated value of the restaurant for the next five years. It will show the restaurant’s assets, liabilities, and other equity earnings. This balance sheet will include the current and non-current assets as well as current and non-current liabilities. The balance sheet will help determine the restaurant’s financial position at the end of the fifth year and present an analysis of our strengths and weaknesses during the period.
Some of the assumptions made when preparing the balance sheet includes;
It is assumed that the income generated from the business will grow steadily over the years because the proceeds from the business will be injected back and that the economy will remain stable to allow profitability. The expenses are assumed to remain constant as they are already factored in as part of the operational costs.
Inventory and accounts receivable are assumed to grow as the years go by because the business is expected to make profits.
Above are the estimates of the restaurant’s financial position in the next five years, that is, the available assets and the sources of the incomes as well as the total liabilities due for the firm. This helps determine the firm’s market value and make proper decisions by evaluating the strengths and weaknesses inherent.
Abrams, R. M. (2003). The successful business plan: secrets & strategies. The Planning Shop.
Fullen, S. L. (2005). Opening a Restaurant Or Other Food Business Starter Kit: How to Prepare a Restaurant Business Plan & Feasibility Study: with Companion CD-ROM. Atlantic Publishing Company.
Ottenbacher, M. C., & Harrington, R. J. (2009). The product innovation process of quick‐service restaurant chains. International Journal of Contemporary Hospitality Management.
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