Business Plan
Prepared By
Sheena Rowan
For
EBAC 52
Professor Marv Painter
December 10, 2012
0
TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................................................................... 2
1.0 INTRODUCTION .................................................................................................................................. 3
1.1 INDUSTRY OVERVIEW ........................................................................................................................... 3
1.2 MISSION STATEMENT ............................................................................................................................ 4
1.3 GOALS & OBJECTIVES ........................................................................................................................... 4
2.0 OPERATIONS PLAN ............................................................................................................................ 6
2.1 ORGANIZATIONAL STRUCTURE ............................................................................................................. 6
2.2 THE RESTAURANT ................................................................................................................................. 6
2.3 AN AVERAGE BUSINESS DAY ................................................................................................................ 8
2.4 AN AVERAGE BUSINESS EVENING ......................................................................................................... 9
2.5 SUPPLIERS ............................................................................................................................................. 9
2.6 WORKING CAPITAL ................................................................................................................................ 9
3.0 HUMAN RESOURCES PLAN ............................................................................................................12
3.1 MANAGEMENT .....................................................................................................................................13
3.2 STAFF ...................................................................................................................................................13
3.3 SCHEDULE ...........................................................................................................................................13
4.0 MARKETING PLAN ............................................................................................................................16
4.1 COMPETITIVE ANALYSIS ......................................................................................................................16
4.2 PLACE...................................................................................................................................................16
4.4 ADVERTISING AND PROMOTION ...........................................................................................................17
4.5 PRODUCTS ............................................................................................................................................18
4.6 PRICING STRATEGY .............................................................................................................................19
4.6 POSITIONING ........................................................................................................................................20
5.0 FINANCIAL PLAN...............................................................................................................................22
5.1 SALES ...................................................................................................................................................22
5.2 INVENTORY ..........................................................................................................................................23
5.3CAPITAL ................................................................................................................................................23
5.4 SUMMARY OF OPERATING EXPENSES ..................................................................................................23
5.5 MANAGEMENT SYSTEM ........................................................................................................................24
5.6 BREAKEVEN .........................................................................................................................................24
6.0 CONCLUSION ......................................................................................................................................25
APPENDIX A – SAMPLE EVENING MENU
1
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
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
3
privately owned businesses targetting a lunch crowd and some evening dining. Our most
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
Operations Plan
5
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 Structure
Corporate 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.
Owner/Executive
Chef
Owner/General
Manager
SousChef
Front End
Supervisor
Kitchen
Staff
Front End
Staff
2.2 The Restaurant
The 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
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
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 Day
Nostalgia 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
2.4 An Average Business Evening
Evening 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 Suppliers
Our 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
Cash
We 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
9
the market, at which time we may consider purchasing the building or relocating our
business to another area. .
Inventories
Depending 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 Payable
Because 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. $6.00
Potato/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.
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Capital Budget
Capital Budget
Leasehold Improvements
Equipment
Furniture and Fixtures
35,000
30,000
22,000
Total Capital Budget
87,000
11
Human Resources
12
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 fulltime 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 parttime 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.
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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
Marketing Plan
15
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
16
Nutana area alone has about 7,000 residents and is a mix of single-family detached
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
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4. 4 The Products
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
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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:
Halibut
King Crab Legs
Salmon
Food Cost
2.75
7.5
6.42
Selling Price
12.79
20.75
18.99
Food Cost %
21.50%
36.40%
35.60%
Gross
Profit
10.04
13.29
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
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
Finance Plan
21
5.0 Finance Plan
5.1 Sales
Nostalgia’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
#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
Supper
22
5.2 Inventories
Many 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
Lease
Utilities
Wages
Employee
Benefits
Marketing Exp
Janitorial
HonorariumsMusicians
POS System
Licenses
Repair
&Maintenance
Other Variable
Costs
Capital Cost
Allowances
Debt Interest
Total
Operating
Expenses
2013
2014
2015
2016
2017
39,600
22,000
287,195
34,499
40,590
22,550
309,116
376,14
41,605
23,114
32,7032
40,111
42,645
23,692
346,447
42,831
43,711
24,284
367,507
45,796
5,000
8,000
15,000
2,500
8,200
15,375
2,500
8,405
15,759
2,500
8,615
16,153
2,500
8,831
16,557
2,500
2,000
2,500
2,563
2,050
2,563
2,627
2,101
2,627
2,692
2,154
2,692
2,760
2,208
2,760
19,096
21,531
23,172
24,939
26,841
2,800
5,186
4,755
4,420
3,851
1,750
$441,940
1,623
$471,460
1,488
$495,296
1,343
$521,123
1,188
$548,792
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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 Analysis
Nostalgia 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
112
Breakeven Cust/Day
60
60
60
60
60
120
100
80
Base Case cust/day
60
Breakeven Cust/day
40
20
0
1
2
3
4
5
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6.0 Conclusion
Our 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.
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