Entrepreneurship

Business Plan Assignment

Submitted by Group-7

Abhimanyu Yadav 20020841296

Anand Thakur 20020841296

Pradeep Chalise 20020841283

Subarish KE 20020843006

Susmita Kayal 20020841280

Title: Farm to Table Restaurant
 CONTENTS
1. Executive summary
2. Introduction
3. Vision Opportunity
4. Mission Statement
5. Opportunity
6. 4 P’s
7. Mindset of investors
8. Problems
9. Business Model Canvas
10 PESTEL Analysis
.
11 Industry 5 force analysis
.
12 Success Factors
.
13 Resources
.
14 Competencies
.
15 Operations Plan
.
16 Marketing Plan
.
17 Risk Management
.
18 Financial Plan
.
19 Organizational plan
.
20 Cash flow analysis and IPO
.

Executive summary
Basic idea is to start a restaurant and homemade cakes and cookie shop. From that
we came to this idea “Organic farming” where the raw materials (Fruits, vegetables,
spices and fibre) that are required for the restaurant will be cultivated through this
and network will be created among the local farmers who can supply organic raw
materials required. This will be a benefit for us and also will create a market for the
local farmers. Our target customers are Families, Business people, students. People
who like to have a pleasant dining experience can visit the place spend time and
have their meal. This is us letting the customers to know exactly where and how the
raw materials required for the preparation of food was sourced. We want you to be
able to trust wholeheartedly in our products.

Introduction
Organic farming & Restaurant can be a great opportunity in today's food industry
and global food market. People are health conscious and usually prefer organic
foods these days. Organic farming will produce the healthy and hygienic raw
materials needed for the restaurants. Using these organic vegetables, fruits and
meats in the restaurants will obviously help us catch the potential market. We
believe this chain business plan of organic farming and using the raw materials in
restaurant business is a great opportunity in today's food industry market. Not only
will we be using these for preparing meals at the restaurant, we’ll also be selling
them online through our website. Feasibility of opening and expanding our
restaurant is identified through Market segmentation. Since we are planning to start
a fine dining restaurant in a city. Understanding the Demographics (age, gender,
occupation, household income), Psychographics (Personality, opinions, values and
lifestyle), and Behavioural pattern of the consumer segments that we want to attract
is important. People who like to have a pleasant dining experience can visit the place
spend time and have their meal. Consumers are moving towards Healthy, Tasty and
Soulful food.

Vision
To serve happiness to our customers through delicious, quality meals and creating a
great restaurant experience while working toward the greater good for our
employees, community and environment.

Mission Statement
 To delight and nourish our customers with quality, healthy and delicious food
at a reasonable price.
 Provide our customers with Excellent service.
 To understand constantly changing customer needs and constantly improving
customers dining experience.
 To contribute to society through our CSR activities.

Opportunity
People are health conscious and their preference towards consumption of food is
changing. Organic food consumption and interests in organically produced food
products has steadily risen around the world in the last few decades. We as a
company consider this as an opportunity since we focus on cultivating and
manufacturing all our raw materials organically.

4P’s

Place:
“Place” is not just about physical location and distribution channels but about the
whole process of bringing product and service to end consumer. Restaurant size
matters because everyone who visit the place likes to have a sufficient space and it
has to be designed in such manner that there is enough space for everyone. When
we get to know the target customer, we can decide the location better.
Understanding the Demographics (age, gender, occupation, household income),
Psychographics (Personality, opinions, values and lifestyle), and Behavioural pattern
of the consumer segments that we want to attract. We segmented the broader
target audience into specific groups. Under this classification, market segments are
grouped according to need. More precisely, if the “need” is fine dining restaurant
which is our business idea, the restaurant should be big, placed on a less noisy
street, easy to find parking place.

Product:
The important thing to remember when offering menu items to customers is that
they have a choice and we need to make sure there are not too many items dumped
on the menu. Items on the menu has to be selective and at the same it has to be
more appealing to the customer. Therefore, we have to develop a menu based on
customers want. Market research helps us in finding exactly what the need is.
However, customer requirements change over time. Marketing continuously
monitors customer preferences. In order to meet these, we need to keep on
updating the dishes to the menu. When customers consume our product, we need
to make sure that we create a value through it and we meet the consumer
want/need these two aspects are the most important thing while offering a product.

Price:
Price is the monetary value paid by a customer to acquire or own the product of a
company. It is the revenue-generating component of the firm. Pricing decisions
should be taken with great care, because it is one of the most important factors in
marketing mix. It is also important that the price should be competitive however the
food offered should also represent the amount of money that the customer is
spending on it is worth it. The pricing strategy of the restaurant must align with the
overall goal of your restaurant. Whether you want market penetration or skim over
all this depends on your pricing strategy.

Promotion:
Customers who wish to try new food place they get attracted because the restaurant
is located in a nice location, interesting signboard or type of food and drinks at that
moment meets the need of them. And there are customers who wishes try out new
place based on the advertisement that a firm does. First-time customers who love
your food and service and decides to come back are they turn into loyal customers.
This is the customer type that you should focus to maintain their loyalty. Word of
mouth is the best and most powerful promotion a business firm should try to
achieve. The best way to approach your target customer is by serving them with the
best food, along with the best service and creating them a great
ambience/atmosphere. Word of mouth from a current customer will help us attract
new customers (from friends, review on media, press review).
 Mindset of investors
Investors look for a strong scale-up plan and a clear exit strategy. Company’s
management should understand their market, know their proposition and should
have the presence of mind to achieve it. Investors also want to see genuinely
whether the goals are attainable. Investors look for business expansion in future and
the expansion process should be a smart prospect. Investors also want to make sure
that expansion is not a risk and the investment made is not in vain. At the same time
the firm’s management should demonstrate the business idea and convince the
investors that their proposal is a good deal.

Problems:
In today’s restaurant business they are 2 main problems
1. Quality of food that is served.
2. Quality of customer service.
3. To convert normal customers into loyal customers, we need make sure to
offer them happy and offer them a pleasant dining experience.
4. Food security is one of the main ethical issues in food service. Every
restaurant should treat it with the utmost care. The management can
encounter many food transportations issues such as the items not arriving on
time or products being contaminated. These can lead to other poor food
safety problems where customers might get sick.
 Business model canvas
Designed for: Date: Version:

Business Model Canvas

Key Partners Key Activities Value Propositions Customer Relationships Customer Segments
Investors - Quality service Restaurant which focuses Customers who visit the People with a medium
Food bloggers - Fast and efficient delivering quality food restaurant regularly will and high economic level
Restaurant equipment service by cultivating its own have the the option of who want to eat healthy
supplier - Excellent food quality raw materials and a place registering their likes, and like to spend some
Local farmers - Experienced and where you can see how dislikes and other good time with their
Local customers Knowledgeable staff. they prepare your meal. requirements in a chart families and colleagues.
Food delivery companies Costumers will be able to so that management and
choose the combination employees are aware
of their meal the way the about that.
Key Resources like, there will be Channels
Finance. employees that will The restaurant will have
Food inventory, guide costumers its own website where
equipments and oraganic according to their needs costumers will be able to
raw materials. and wants. choose their meals and
Chefs. have the option to pick it
Delivery partners. up and partnership with
Farming land. popular food delivery
Employees. companies.

Cost Structure Revenue Streams

Fixed: Restaurent rent, Employee salaries, Website Selling cultivated raw materials online (Fruits, vegetables, Spices).
management, accounting system, Trucks. Online orders.
• Variable: Delivery rent, food inventory, packaging, marketing & Advertising revenue.
advertising. Inhouse orders.

PESTEL Analysis
Organic Farming & Restaurant business have many internal and external
environment analysis parts. We need to build a strong environment, management
team, supply chain management system and healthy and hygienic foods in the
market. We need to identify and research the opportunities and threats in the
market. Our business option must carry certain research and learnings about the
external environment to help the business to gain opportunities and manage threats.

1.Political:
We need to identify the political situation of all home and host countries where we
are conducting business. Food businesses are concerned with hygiene and health
and the government keeps on imposing different rules and regulations in this type of
industry. We must be ready and prepared to face any political consequences across
the globe.

2.Economical:
Food industries are highly sensitive to tax rates, demands are highly sensitive with
prices. We should be updated on policy decisions and any pricing policies that the
government can change.

3.Socio-Cultural:
Food businesses are highly linked with the social and cultural norms and values. We
must serve the foods in our restaurants representing the cultural and local market.
That will help us create the brand and address every market.

4.Technological:
We can adapt food technologies and services like online food delivery, home and
office special packages. We can also use the advanced technologies for cooking and
serving.

5.Environmental:
Our possible opportunity is very environment friendly and connected directly with
farm and land. So that is our strength as well as opportunity to present the relation
with the customers that will enable the brand in the market.

6.Legal:
There are always simple legal procedures for the business related with farming, food
and agriculture. Hence, we don't have huge complexity in legal terms, still we must
maintain the books of account properly and pay the regular tax. That is also an
opportunity for our company because we most of the time get subsidies and
donations for agriculture related business.

Industry 5 force analysis

Porter’s Five Force analysis is an important tool for understanding an industry. The
application of the five force on restaurant industry is discussed as below:

1.Threat of New Entrants

Setting up a brand-new restaurant calls for the moderate level of investment,
making it an easy to enter industry. Another issue which impacts the benefit of
access for brand new restaurants is economies of scale, which may be established as
soon as the manufacturing and different operations gain efficiency. The new
entrants additionally have to consider the constant price and running price, ensuring
that they're capable of establish price gain. One viable way the new gamers on this
enterprise acquire price gain is through making bulk purchases and getting
discounted prices. However, the excessive constant price stays a concern for the
new entrants, who have to control their operations, in spite of having low
profitability in the initial level of business. Keeping those factors into view, it may be
said that the eating place enterprise has a moderate risk of latest entrants.

2. Bargaining Power of Buyers

Apart from the new entrants, the bargaining power of consumers is another critical
aspect to consider. Since the consumers maintain the power to persuade the pricing
selections of a company, the restaurant enterprise is likewise affected by the buyer’s
desire and switching behaviour. Some of the approaches through which consumers
can impact a restaurant are the adjustments in expenses, the objects provided with
the aid of using a restaurant, the great of the objects provided etc. However, the
restaurants can’t provide overpriced objects, due to the fact in order to limit their
range of customers. The expenses need to be adjusted in keeping with the target
market and the affordability of that section of the marketplace. Based on this
analysis, it can be concluded that consumers have a moderate bargaining power in
the restaurant enterprise.

3. Bargaining Power of Suppliers

The suppliers in this enterprise encompass the organizations offer raw material to
the restaurants the number of providers in an enterprise decides the influence a
dealer may have on the purchase decisions of its consumer companies. The regions
which are marked with an excessive quantity of providers of comparable raw
ingredients, the providers have decrease energy compared to areas in which
providers are fewer in quantity. The length of a restaurant is also a determining
factor when it comes to the bargaining power of providers. Small scale restaurants
create a better supplier power due to the constrained order they could generate,
whilst the providers have a weaker negotiating role with massive scale restaurants
which region bulk orders. In order to hold their commercial enterprise ties with the
large firms, the providers should alter the charge of raw material according to the
call for of those businesses.

4. Threat of Substitute Products

The restaurant industry has diverse entities, making it less complicated for the
customers to make a choice even as switching from one restaurant to another other.
The low switching cost is some other component that makes it less complicated for a
customer to shift their loyalty from one brand to some other. The restaurants can
price a top-class fee from customers who're focused on great and first-rate dine-in
revel in, even as the ones customers searching out greater economical alternatives
choose a price-powerful outlet. The ease of switching from one restaurant to
another, in case, if the experience isn't always according to customer expectations
makes this industry having an excessive threat of substitute products.

5. Competitive Rivalry
The higher the range of competitors, the greater will be the competition in the
restaurant industry. These players in the industry try to keep a bigger proportion in
the marketplace than their rivals, while maintaining a flow of profit and supporting
the business towards growth. Therefore, the restaurant enterprise has high threat of
competition, which makes it tough to hold high profitability for smaller restaurants.
The restaurant enterprise has intense competition due to the presence of fast-food
franchises and several small-scale establishments. The fast-food giants having an
extra budget of advertising and marketing and product innovation are capable of
maintain a facet over their smaller counterparts. Moreover, there is little customer
 loyalty so people switch from one restaurant to another according to their demand
and preference.

Success factors
There are several success factors of our restaurant. The main focus being on the organic
raw materials used and the fact that the customers can choose their own palate according
to their preference. The Restaurant focuses on delivering quality food by cultivating its own
raw materials and a place where you can see how they prepare your meal. In our restaurant
the customers will be able to choose their combination of the meal the way the like, there
will be employees that will guide costumers according to their needs and wants.
Our restaurant provides excellent ambiance for anyone planning have a healthy meal
while spending some quality time with their friends, families and colleagues. One of our
major strength lies in the usage of completely organically sourced raw materials, the various
gluten free options, and our experienced and knowledgeable staffs who would be
responsible for the preparation of the food as well as the cultivation of the raw materials.

Customers who visit the restaurant regularly will have an option of registering their
likes, dislikes and other requirements in a chart so that management and employees are
aware about that.

Resources
Our restaurant focuses on delivering high quality food by cultivating our own raw
materials. This is a place where the customers can actually see how their meals are being
prepared.
Customers will be able to choose their combination of the meal the way the like, there will
be employees that will guide costumers according to their needs and wants.
The key resources of our restaurant would be

1.Finance.

2.Food inventory, equipment and organic raw materials.

 3.Chefs.

4.Delivery partners.

5.Farming land.

6.Employees.

Competencies
Customers today are more health conscious than ever before; the changing times has
led to change in the food consumption pattern. When customers visit a restaurant, they
make sure that they are being provided with quality food and they are also particular about
the quality of service that is being offered. Consumers are moving towards Healthy, Tasty
and Soulful food. Since the raw materials required are cultivated and manufactured by us,
the consumers get to know exactly how and where the raw materials required for the
preparation of their meal is sourced which will help them trust us whole heartedly.
 People who like to have a pleasant dining experience can visit our restaurant, they can
spend quality spend time and have their nutritious meal. The restaurant focuses on
delivering high quality food by cultivating our own raw materials. This is a place where the
customers would be able to witness the food preparation process.
Customers will be able to choose their combination of meal according to preference, there
will be employees that will guide costumers according to their needs and wants.
The restaurant will cater to inhouse orders as well as online orders to customers, and
deliver cultivated raw materials (Fruits, vegetables and spices) online. Our strength lies in
the usage of completely organically sourced raw materials, the various gluten free options,
and our experienced and knowledgeable staffs who would be responsible for the
preparation of the food as well as the cultivation of the raw materials.
 Operations Plan
Our business is more concerned with raw materials and channel management for the
supply of raw materials from farm to restaurants. we need stores in central location for
supplying our raw materials to all the restaurants. Our operation channel includes online
delivery. The Indian Council of Agricultural Research (ICAR) have specified geographical
areas suitable for organic farming, such as Bhopal, Sikkim, Assam, Meghalaya, Nagaland,
Manipur, Arunachal Pradesh, Tripura, Mizoram, Manipur. The black soil found in states like
Odisha, Chhattisgarh, Madhya Pradesh and Maharashtra also hold potential for organic
farming. We will make the central location store for supplying raw materials to our
restaurants. this will reduce the operation cost. We can also make the delivery process
more effective and efficient by picking the foods from all the nearest branch of restaurants.

Marketing Plan
The organic farming market is expected to grow with a CAGR of approximately 15%.
Organic farming market offers a huge potential for trade and income all over the world and
certified organic products hold access to attractive local and international markets, where
higher returns and incomes are possible. The undifferentiated market coverage strategy is
most suitable for this scenario. The goal would be to target a broad consumer base focusing
on the common needs of the consumers. The customers will include the wholesalers,
retailers, and the consumers. Since each of them has different needs, each will require a
different marketing strategy. The organic markets to be covered:

1. Local markets

2. Farmer's market

3. Local shops, restaurants.

4. Home delivery

5. Food Coops

6. Merchants and wholesaler’s market

 7. E-commerce

8. Supermarkets

9. Exports

Risk Management
Our farming and restaurant channel are highly depended on the farm and the raw
materials produced from the farm. we must manage the demand and supply of the raw
materials in a such a way that we can smoothly produce the final output and run the
operation of the restaurant. the important and critical success factors for the business are
Quality standards, Hygiene & cleanliness, Quality service, Experienced and Knowledgeable
staff, Effectively and regularly communicate values and objectives to employees, Attracting
Local support and Customer feedback. We should always keep our eye in the above-
mentioned elements and consider the political economic and social factors. For any
uncertain like COVID 19 we can plan for takeaways and online delivery so that we can
operate minimum of our business and cover the risk.

Financial Plan
Primary investment of the business will be in some current assets and fixed investment
will be more in the farming. The cost for farming in different place will incurred around
three crores. For operating the restaurant business around three and half crores cost will be
incurred. Investment in assets and equipment’s and all the office materials and restaurant
infrastructure will incurred around fifty lakhs. Our company can take loans by providing the
projected balance sheet for coming 5 years and putting the collateral of the land that we are
farming in. we plan to get the initial investment of Rs. 3 crores in first 3 years and recover
the investment in 5 years. Government of India is basically focusing and investing in the
agriculture sectors. We can get agricultural loans for farming and that will definitely help
our chain business of restaurant. Government is also offering many subsidies and custom
free for agriculture related goods and technology that will help us to minimize the cost for
the initial investment.

Organizational plan
The founding members will be in the board. Some management professionals can be
hired for managing the operations, marketing, sales and handling the finance. Highly
experienced people from agriculture, economics, politics and restaurant business will be in
our management and advising team. that will obviously improve our decision-making power
and can have direct effect on positive improvement of the business. CEO of the business
can be appointed through the BOD meeting and general manager will be the responsible
person for managing the overall performance of the business and decision making.

Cash flow analysis and IPO

Fixed cost projection
Headings Costs

Machines and equipment 5000000

land 20000000

Furnitures and fixtures and office 500000

Restaurant infrastructure 100000

Farming infrastructure 1000000

Preliminary R&D and Designing 100000

Total Fixed Cost 58000000

Variable cost projection

Headings Costs

Salaries 500000

Raw materials 5000000

Transportation charges 100000

 wages 100000

Electricity and telephone 10000

Office expenses 10000

General expenses 10000

Audit fees 5000

Selling expenses 150000

Advertisement expenses 50000

Office rent 100000

Total Variable Cost 7950000

In the beginning we will go with cost strategy. After creating brand and brand awareness
in the market we plan to increase the price as well as expand the chain of our restaurant
business, that will consequently result in revenue generation and decrease in cost.

In the initial stage we are not planning for any issue of the IPO. We plan to start the
business from Debt financing and personal investment. After 7 years of regular operations
and financial position company will plan for going public and international.