Do you want to start breakfast restaurant business?
Are you thinking about starting a breakfast restaurant? Well, it is undoubtedly one of the most profitable startups, yielding the greatest rate of return as compared to other businesses.
Breakfast is the most important meal of the day and a lot of people pay emphasis on having a great breakfast. Many of them don’t mind to spend heavy cash on a routine basis, provided they get delicious and healthy food. This business is not affected by any season and yields equal profit throughout the year. The biggest advantage in starting this business is that it gives us the maximum rate of return on relatively small investments as compared to other businesses.
But this business is very difficult to plan in the initial stages. From the planning of menu to the procurement of inventory, you have to think through nearly everything. Food-related businesses have got more constraints as compared to other businesses, that is why before starting it, you need to have a bed and breakfast business plan covering even the tiniest bit of details.
To help you avoid all the trouble of thinking and making a plan yourself, we are providing a detailed bed and breakfast business plan of a startup ‘The Food Court’.
2.1 The Business
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The Food Court will be a registered American breakfast restaurant business based in the central business district of Manhattan borough of the New York City. Manhattan is the most densely populated borough of the city and we will be strategically located in the main commercial zone of this populated borough. We will be surrounded by a number of commercial and business centers of the city.
The business will be owned and operated by John Vent who is a renowned chef of the United States and has won several chef awards during the course of his service at various food chains.
The Food Court will be primarily a breakfast place aimed to provide delicious and healthy breakfast to its customers. It will be managed by Mr. Vent and his son who has recently graduated from the Harvard University, after doing his MBA.
The restaurant will provide both dine in and takeaway breakfast facility to the commercial and residential zones of Manhattan borough, New York.
2.4 Target of the Company
Mr. Vent’s target is to become the best breakfast business of the New York City by introducing traditional foods to the diverse US culture.
3.1 Company Owner
Mr. Vent is a famous chef of the United States, best known for his traditional dishes which are loved and cherished by everyone. He has been serving the food industry for more than 30 years and has also made appearances in various cooking shows. The two times ‘US-Chef of the Year’ award winner is now all set to renew the traditional breakfasts by his own venture.
3.2 Why the Business is being started
Throughout his career, Mr. Vent has strived for introducing traditional foods to the fast-food loving younger generation. He is strictly against fast-food because of the nutritional deficiency caused by them and the artificial materials used in them. He has also raised this concern in various talk shows to several media outlets. Finally, he has made his mind for opening a bed and breakfast business plan for fulfilling his dream of the revival of traditional nutritious foods in America.
3.3 How the Business will be started
Mr. Vent, with the help of financial experts, has forecasted following costs for expenses, assets, investment, and loans for the Start-up.
The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by company’s analysts, is given below:
|Research and Development||$432,750|
|TOTAL START-UP EXPENSES||$2,517,300|
|Other Current Assets||$2,232,500|
|Start-up Expenses to Fund||$121,875|
|Start-up Assets to Fund||$195,000|
|TOTAL FUNDING REQUIRED||$0|
|Non-cash Assets from Start-up||$118,750|
|Cash Requirements from Start-up||$0|
|Additional Cash Raised||$1,318,750|
|Cash Balance on Starting Date||$121,875|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$6,295,000|
|Loss at Start-up (Start-up Expenses)||$3,413,125|
|TOTAL CAPITAL AND LIABILITIES||$2,251,875|
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Services for customers
The Food Court will provide all sort of traditional foods, American as well as other regions’, to its esteemed customers. Just like other bed and breakfast business plan we will also present both options of dine in and takeaway to our customers. Each one of our offering will be prepared by maintaining strict health and quality measures.
We will offer the traditional American breakfast comprising of beans, bacons, sausages, eggs, toasts with butter, marmalade, or jelly along with tea, coffee or drinks. We will also offer traditional food packages of five other countries:
- Chinese breakfast comprising of rice in vegetable soup, dumplings, fried sponge cake, porridge and steamed creamy custard bun
- French breakfast comprising of tea, juice, coffee, hot chocolate, with bread, butter and pastries
- Turkish breakfast comprising of cheese, jam, bread, olives, honey, omelette, and fruits
- English breakfast comprising of eggs, fried bread, baked beans, bacon, sausages, and mushrooms
- Italian breakfast comprising of caffè latte (hot coffee with milk), fette biscottate (cookie-like rusk hard bread), coffee with bread and rolls, butter, jam and cookies
Marketing Analysis of breakfast restaurant business
The most important thing to do before you open a breakfast restaurant is to carry out its accurate marketing analysis. It helps to decide the company’s strategies over the next years. It must be incorporated in the bed and breakfast business plan and all subsequent things must be plan according to it. Considering its importance, Mr. Vent obtained the services of marketing experts to help him develop a bed and breakfast business plan taking in account the current marketing demands.
As per current market, breakfast industry is seen with a tremendous increase over the last years and is expected to increase steadily in the future. According to the NPD Group, the open breakfast places have increased by about 17% in the last 6 years. Moreover, this industry is not affected by any season or time of the year so we can say that its market demand is quite high.
The success or failure a startup totally depends upon how they market themselves to target their specific customer groups. A successful marketing strategy can only be developed after knowing the target audience and potential customers. Mr. Vent has carried out an extensive research with marketing experts to know their target customers and focus their marketing strategy towards them before they open a breakfast restaurant.
5.1 Marketing Segmentation
The marketing experts from The Food Court have identified following type of target audience which can become the potential customers of the company.
The detailed marketing segmentation comprising of the company’s target audience is as follows:
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5.1.1 General Traffic:
Our customers are very diverse and it is very difficult to categorize them. General traffic refers to those customers who happen to be near our restaurant and decides to have their breakfast here. This category includes all those people who have come to our area for their own tasks and activities. As we discussed already that we are situated in the main commercial district of Manhattan which is visited by several thousands of people daily. This general traffic is very diverse and comprises of people from different nationalities, hence we will offer the traditional foods of their regions to make them feel like home.
5.1.2 Companies and Businesses:
This category includes all employees working in the various office, companies and businesses situated near us. Most of these workers are single and usually rely on restaurants like us for their daily breakfast. We will be the perfect choice for them for having a variety of breakfasts of several regions at their disposal. Some of these people, which are not single, are very busy in their routines and most of the time they don’t even have time to take breakfast in their homes. We will prepare special packages for these busy people which can be easily consumed while walking. The employees of these companies and businesses will eat our breakfasts on a daily basis.
5.1.3 Local Residents:
Although we are situated in a commercial zone yet the resident zone is also not too far. We also aim to target the local residents residing in nearby areas. We are sure that once they have tasted our traditional offerings, they will turn into our regular customers.
The detailed market analysis of our potential customers is given in the following table:
|Potential Customers||Growth||YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5||CAGR|
|Companies and Businesses||44%||22,334||32,344||43,665||52,544||66,432||10.00%|
5.2 Business Target
Our target is to become the best breakfast restaurant of New York within next 5 years of launch. We also aim to recover our initial capital within 3 years of our launch and grow our sales by 20% each year. At our restaurant, we will also provide a top-notch customer service. Our every employee and waiter will treat our customers with utmost respect so as to build a long-lasting relationship with them.
5.3 Product Pricing
Product pricing is the most important factor affecting the sales of a bed and breakfast business. People are really picky about menu prices while selecting a place to eat. In order to revive the traditional foods and to make sure that a lot of people will be attracted towards us we have priced our basic American menu in the same range as of our competitors. But the traditional packages of other countries are slightly costlier because they require a lot of effort and imported materials.
After carrying out an accurate market analysis, Mr. Vent created an exceptional strategy for business for targeting the identified potential customers. The sales strategy developed by him with the help of finance experts, is as follows:
6.1 Competitive Analysis:
The Food Court will have a tough competition ahead because there are thousands of already established breakfast restaurants in Manhattan so the average cost of breakfast will be kept nearly the same as of other similar restaurants. Moreover, people are always hesitant to try a new restaurant and are more willing to dine in their usual trusted restaurants. That’s why something innovative and extraordinary is needed to stand out in this challenging environment.
6.2 Sales Strategy
Mr. Vent, with the help of company experts, has developed an ingenious strategy to advertise his new venture and to make sure that everyone gets a taste of what he has to offer. Firstly, we will offer free breakfasts for the first three days of our launch. We will also send our breakfast packages to the various companies, offices and bed and breakfast business plan near us, so that they may also get to know the taste of our unique and delicious foods. We will offer free-delivery services to encourage sales for local residents businesses. We will advertise our restaurant and menu on social media and will also allow users to order their food or reserve their table by means of online channels.
6.3 Sales Forecast
We believe that if people try our delicious and healthy traditional foods, they will then eat them for the rest of their lives. That’s why we have forecasted our sales pattern to increase with years. By analyzing our market segmentation strategy, our experts have forecasted the following sales on yearly basis which are summarized in the column charts.
The detailed information about sales forecast, total unit sales, total sales is given in the following table:
|Unit Sales||Year 1||Year 2||Year 3|
|American Traditional Breakfast Package||187,030||260,320||258,240|
|French Traditional Breakfast Package||802,370||815,430||823,540|
|Chinese Traditional Breakfast Package||539,320||770230||1,002,310|
|Turkish Traditional Breakfast Package||265,450||322,390||393,320|
|English Traditional Breakfast Package||143,530||125,030||176,240|
|Italian Traditional Breakfast Package||134,240||394,340||842,230|
|TOTAL UNIT SALES||2,071,940||2,687,740||3,495,880|
|Unit Prices||Year 1||Year 2||Year 3|
|American Traditional Breakfast Package||$140.00||$150.00||$160.00|
|French Traditional Breakfast Package||$600.00||$800.00||$1,000.00|
|Chinese Traditional Breakfast Package||$700.00||$800.00||$900.00|
|Turkish Traditional Breakfast Package||$650.00||$750.00||$850.00|
|English Traditional Breakfast Package||$140.00||$120.00||$100.00|
|Italian Traditional Breakfast Package||$150.00||$1,300.00||$1,450.00|
|American Traditional Breakfast Package||$214,800||$274,000||$333,200|
|French Traditional Breakfast Package||$120,050||$194,500||$268,500|
|Chinese Traditional Breakfast Package||$50,110||$71,600||$93,000|
|Turkish Traditional Breakfast Package||$139,350||$194,600||$249,850|
|English Traditional Breakfast Package||$62,350||$72,300||$82,250|
|Italian Traditional Breakfast Package||$229,500||$365,500||$501,500|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|American Traditional Breakfast Package||$0.70||$0.80||$0.90|
|French Traditional Breakfast Package||$0.40||$0.45||$0.50|
|Chinese Traditional Breakfast Package||$0.30||$0.35||$0.40|
|Turkish Traditional Breakfast Package||$3.00||$3.50||$4.00|
|English Traditional Breakfast Package||$0.70||$0.75||$0.80|
|Italian Traditional Breakfast Package||$3.00||$3.50||$4.00|
|Direct Cost of Sales|
|American Traditional Breakfast Package||$98,300||$183,000||$267,700|
|French Traditional Breakfast Package||$66,600||$119,900||$173,200|
|Chinese Traditional Breakfast Package||$17,900||$35,000||$52,100|
|Turkish Traditional Breakfast Package||$19,400||$67,600||$115,800|
|English Traditional Breakfast Package||$27,700||$69,200||$110,700|
|Italian Traditional Breakfast Package||$64,200||$224,700||$385,200|
|Subtotal Direct Cost of Sales||$294,100||$699,400||$1,104,700|
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Along with providing dine in facility, The Food Court will be a restaurant that delivers breakfast to its customers as well. That’s why it will need a lot of staff for its proper operation. The company experts have developed the following plan for the staff needed for the company along with their average salaries.
7.1 Company Staff
Mr. Vent will act as the General Manager as well as the Head Chef of the restaurant. The company will initially hire following people:
- 1 Manager to manage the overall operations of the restaurant
- 1 Cashier to receive cash from the people
- 2 Administrators / Accountants to maintain financial records
- 4 Sales and Marketing Executives responsible for marketing and advertising of the restaurant
- 10 Chefs for making the breakfasts
- 20 Waiters to serve the customers
- 8 Cleaners to clean the dishes and other facilities at the restaurant
- 10 Drivers to deliver the breakfasts to the local residents, companies and businesses
To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.
7.2 Average Salary of Employees
The following table shows the forecasted data about employees and their salaries for next three years.
|Year 1||Year 2||Year 3|
|Administrators / Accountants||$45,000||$52,000||$59,000|
|Sales and Marketing Executives||$145,000||$152,000||$159,000|
The Food Court will be one of the many bed and breakfast business plan in Manhattan. The bed and breakfast business plan will be solely financed by Mr. Vent and no equity funding or business plan bank loan will be required unless it expands faster than forecasted.
8.1 Important Assumptions
The company’s financial projections are forecasted on the basis of following assumptions.
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
The following graph shows the company’s Brake-even Analysis.
The following table shows the company’s Brake-even Analysis.
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|Average Per-Unit Revenue||$260.87|
|Average Per-Unit Variable Cost||$0.89|
|Estimated Monthly Fixed Cost||$196,410|
8.3 Projected Profit and Losss
The following charts show the company’s expected Profit and Loss situation on the monthly and yearly basis.
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
The following table shows detailed information about profit and loss, and total cost of sales.
8.4 Projected Cash Flow
The following column diagram shows the projected cash flow.
The following table shows detailed data about pro forma cash flow, subtotal cash from operations, subtotal cash received, sub-total spent on operations, subtotal cash spent.
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$7,023||$8,610||$9,297|
|SUBTOTAL CASH FROM OPERATIONS||$47,143||$53,651||$59,359|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$47,143||$53,651||$55,359|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$35,296||$39,549||$43,582|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
8.5 Projected Balance Sheet
The following projected balance sheet shows data about total current assets, total long-term assets, total assets, subtotal current liabilities, total liabilities, total capital, total liabilities and capital.
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
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8.6 Business Ratios
The following table shows data about business ratios, ratio analysis, total assets, net worth.
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|Total Debt to Total Assets||2.68%||1.04%||0.76%||67.10%|
|Pre-tax Return on Net Worth||66.83%||71.26%||75.69%||4.40%|
|Pre-tax Return on Assets||64.88%||69.75%||74.62%||9.00%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||19.20%||21.16%||23.12%||N.A.|
|Return on Equity||47.79%||50.53%||53.27%||N.A.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
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