Ethiopian Restaurant$-$Market Size$-$Up $/$ Four P$\text{'}$s

Desta was just finishing up lunch with her friend Carla in the cafeteria. Carla was telling about her plans to one day be a hairdresser.

$"$So what are you thinking of doing when you graduate? Are you going to college?" Carla enquired to Desta.

$"$I$\text{'}$m not sure. I actually have an appointment with guidance to talk about some options next period," replied Desta. $"$I$\text{'}$m seriously considering working at my Mom's restaurant and maybe one day taking over. She says she would like to pass it on to me if I wanted."

Desta's mother ran a small Ethiopian restaurant in a funky little area downtown. All of its customers basically came from the $5$ apartment buildings that were in the area. It was the only Ethiopian restaurant in town and her mother ran it $5$ days a week. Desta helped out occasionally, but her mother wanted her to do well in school, so hired an assistant for $$80$ a night for the $5$ hours they were open.

"Would you like working there?" asked Carla. "I thought you said there was a big apartment building being built across the street and it was always noisy."

"Yes, but they are almost finished. We have a good lease for $5$ years and will need someone to take over one day," replied Desta. "I think I could make some money there if I ran it$.$ The rent and expenses are only about $$3000$ a month, and we have on average $20$ customers per night paying about $$27$ each. Mom has been teaching me more and more about the business."

"I don't know. I heard they were putting in a new Pizza place and coffee shop on your street as well. It might make business tougher," suggested Carla.

$"$I$\text{'}$m not really sure what will happen when they open, but the neighbourhood is getting nicer. They have some really cool shops opening up$,"$ mentioned Desta. "I have to run to guidance, I'll talk to you later."

Desta had a good discussion with her guidance counsellor but had a hard time concentrating the rest of the day. She thought about how much the customers seemed to like the food at her mom's restaurant and how there were quite a few regulars. They never had more than half the seats filled even at their busiest time.

That afternoon as school let out, her mom and her went shopping to pick up some supplies. They bought about $$700$ worth of groceries and headed to the restaurant.

"Are these groceries for the month? Is that what we usually spend?" Desta asked her mother.

$"$No$,$ they are just for the week dear. The restaurant normally spends about $$2500$ a month on food and drink," replied her mother. "Are you still thinking of taking over the restaurant? I would love to pass it on$,$ and with some new ideas, I bet you could really make it work."

Questions

What are some of the things described that you think are important factors in making Desta's restaurant successful?

Is the restaurant successful? How might the extra building impact profit?

How much is sold per year $($revenue$)?$

What are the annual costs?

How much money is left over each year $($profit$)?$

What are some changes that are happening and how do you think they would impact on the restaurant $($good or bad$)?$

Name $5$ or more marketing initiatives $($price$,$ place, product, promotion$)$ you would take to improve the restaurant if you took over?