School of Business POKHARA UNIVERSITY

PRESENTATION
Business Development Plan
(Graduate Seminar- 1 credit Hour)

MBA IV Trimester July . , 2011

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Business Development Plan of

FAST FOOD RESTAURANT

Address Newroad, Pokhara Basanta Khadka Roll No: 12 MBA,IV Trimester
3/9/2012 Basanta Khadka MBA IV Trimester, SOB,PU 2

Highlights of the Project

Name of Company : B & B Fast Food Restaurant Name of Project : Promoter(s) : Single ( sole proprietorship) Objective of Project: utilizing opportunities of the market
and provide customer value and satisfaction and earn profit.

Capacity : Annual Duration of Projection: 5 years Major products:

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Introduction
Reason for selecting this project
Better opportunities in the market. Availability of resources. People tends to increase their habit towards fast food due to their busy life.

Uniqueness / product features :

Prompt service and quick delivery. Fresh and hygienic food stuffs. Reasonable price.

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Production Plan
How to produce goods / or how to offer the service or combination of both? Food production and assembly will take place in the kitchen of the restaurant. Moderate low price offering menu Fresh, ready-made and delicious in test Three ways to purchase these products; table service at the restaurant, take-out from the restaurant, and delivery to home or office.

Prompt service will be provided to the customers to enhance their value and satisfaction and build loyalty

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Project Management Plan

BOD
Sole proprietorship/single owned

Expert in this project

Those who had runed the fast food restaurant

Organization Chart
CEO, Manager, Head cook, Assistant cook, Waiter, bar boy, Cashier and Dishwasher

HR Policy
Training and development programs Compensation and benefits
Rewards and incentives, Health and safety issues etc
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SWOT Analysis
Strength
capable and skilled employees Prompt service and quick delivery and well-packaged product Offered clean fresh, delicious varieties of fast food for breakfast at reasonable price

Weakness
concentrated only on limited no of customer located in specific area May not able to reach to all types of customers on delivering goods Lack of practical experience on the business sector

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 Opportunities
little competition Availability of raw materials and other resources Can sell goods at reasonable price Availability of skilled and capable HR

Threats Emergence of new restaurants, hotels in these sites. Popular old restaurants serving large no. of customers.

Marketing Plan
Marketing Strategy
Focusing on the unique aspect of the product theme (healthy, tasty foods) a mix of marketing vehicles will be created to convey our presence, our image, and our message. Print media -- local newspapers, magazines and student publications Broadcast media -- local programming and special interest shows Hotel guides-- Chamber of Commerce brochures Misc. -- charity events, Mahotsav etc

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 Marketing plan
The target groups are people who work in organizations and private shopping centers owners or employees and other youngsters, college students and tourists. The target market is Newroad and nearby places. Market trends is in increasing due to increase in consuming habit of people towards fast food. Fewer competition, although there are large no. of hotels and restaurants in this place , they do not provide home delivery. Our competitive strategy will be on quality, employee motivation and sales attitude, prompt service and delivery. Sales are assumes to increase 10% each year.

 Role of Marketing Departments & Staffs

Marketing department( manager) basically looks over the marketing activities on buying of raw materials, equipments and goods required. Manager: build report, others functions of marketing department. Waiter: order and deliver the goods Cashier: receive cash and keep record of sales Bar boy: take order and supply the drinks Head cook: cook the food Assistant cook: help the cook in cooking and preparing the dishes Dishwasher: wash dishes, clean restaurant and wash clothes

Financial Projection
Assumption of Financial Calculations:
Year 1 2 3 4 5 Capacity % 50% 60% 70% 80% 90% 100%
Name of student MBA IV Trimester, SOB,PU

Sales Rs. 5,307,100 6,368,520 7,429,940 8,491,360 9,552,780 10,614,200

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Financial Projection
Assumption of Financial Calculations: About Demand : About Variable Cost : About Fixed Cost : About Market Scenario : About Government Policy : About Industry related factors : About internal factor :-

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Financial Projection
Initial Investment : 1,000,000 Fixed Assets Requirements: 800,000 Working Capital Requirements: 200,000 Initial Capital Structure Debt- 50% = Rs 500,000 Equity- 50% = Rs 500,000 Fixed Assets = 800,000 Working capital Long Term Loan Total Assets Equity Capital Total Equity & Liabilities
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Financial Projection
Income Statement Summary
100%
Year Sales VC Contribution Margin FC EBIT Interest EBT Tax Earning After Tax Dividend Retained Earnings
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50%
1 5307100 3955003 1352098 714900 637198 18% 90000 547198 25% 136799 410398 50% 205199 205199

60%
2 6368520 4746003 1622517 660175 962342 77420 884922 221231 663692 331846 331846

70%
3 7429940 5537004 1892937 655876 1237060 62576 1174485 293621 880863 440432 440432

80%
4

90%
5

10614200 7910005

8491360 9552780 6328004 7119005

2163356 2433775 651963 648440

1511393 1785375 45059 24390

1466333 1760985 366583 440246

1099750 1320739 549875 549875 660370 660370

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Financial Projection
Cash Flow Summary
Year Total cash Inflow (A) Total cash outflow (B) Cash Balance (A)-(B) Add :Opening Cash balance Closing Cash Balance 1 2 3 4 5

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Balance sheet Summary ( 5 years)

Year ASSET Total current assets Fixed Assets Total Assets Total current liabilities Long Term Loan Total liabilities Share Capital Reserves & Surplus Total owner's equity Total Capital & Liabilities 1 604,344 693,500 1,297,844 162,534 430,111 592,645 500,000 205,199 705,199 1,297,844 2 938,003 641,725 1,579,728 195,041 347,642 542,683 500,000 537,045 1,037,045 1,579,728 3 1,361,105 594,249 1,955,353 227,548 250,329 477,877 500,000 977,477 1,477,477 1,955,353 (All amount in Rs) 4 1,872,220 550,685 2,422,906 260,055 135,499 395,554 500,000 1,527,352 2,027,352 2,422,906 5 2,469,598 510,685 2,980,283 292,562 (0) 292,562 500,000 2,187,721 2,687,721 2,980,283

Financial Projection
Capital Budgeting Summary Initial Investment - Rs1,000,000 Total Present Value - Rs 1,701,402 Non Discounted Pay Back Period - 1.75 years Discounted Pay Back Period - 2.12 years Net Present Value (NPV) - Rs 549,405 Internal Rate of Return(IRR) - 37% Profitability Index - 1.70 times
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Financial Projection
BEP and major Financial Ratios BEP (average for 5 years) - 37% BEP ( first year 50% Capacity) - 53% ROI ( average for 5 yrs) - 41.68% ROE ( average for 5 yrs) - 57.04% ROA ( average for 5 yrs) - 41.68% Net Profit Margin ( average for 5 yrs) - 11.36%

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Financial Projection
Sensitivity Analysis ( 3 scenarios)
Other variable remaining the same but.. If Sales price decrease by 10%, BEP = decreases for 5 years If cost increase by 10%, BEP = decreases for 5 years by increase in cost If Sales price decrease by 5% & Cost increase by 5%, then BEP = increase for five years.

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Recommendation
Considering the above analysis and projection based on above assumptions, I would like to recommend that : There is a suitable situation to conduct or operate the business because IRR( 37%) is greater than cost of capital( 18%). NPV of the project is positive which means wealth maximization. Investment will be recover in nearly 2 years.

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Any Questions???
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Thank You
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