QUESTION ONE (30 Marks). The Business Proposal The following is a business proposal for Secret Recipes Restaurant to ZANACO in order to access a loan towards the financing of the business. Read through and answer the questions that follow. TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY 2.0 MARKETING PLAN 3.0 PRODUCTION PLAN 4.0 FINANCIAL PLAN 1.0 EXECUTIVE SUMMARY Secret Recipes Restaurant is a restaurant with high quality products. it intends to be established in December 2020.it will provide a brilliant and relaxing atmosphere for its customers ,it .this restaurant will also serve steak ,chops, pork chicken and other Zambian traditional dishes. The start-up management team will combine expertise manager and the chefs. They need to have at least 4years experience on restaurant. Added value -providing unique food, excellent services and elegant environment -reduce local employment pressure -promoting local economy and traditional Zambian culture based on some beneficial policies from government Objectives Our aim is to become Zambias best restaurant in efficiency, profitability, and customer satisfaction. We will strive to be the leader in responding to the changing needs and priorities of our stakeholders. We will further strive to extend services to a wider community so that with revenue earned from the comparatively well-off clients, we are able to invest more extensively in services specific to our target clients. 2.0 MARKETING PLAN We intend to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its location. Below is an overview of the marketing strategies and objectives that we will use once we launch this restaurant 2.1 MARKETING OBJECTIVES -Implement a local campaign with the Company's targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising. - Hire a public relations firm to provide reviews and articles about the Company's grand opening. 2.2 LOCATION Our restaurant will be located along freedom avenue, Kitwe. This location will be in the center of the community, giving us high exposure. 2.3 MARKETING STRATEGIES We intend on using a number of marketing strategies that will allow us to easily target men and women within targeted market. These strategies include traditional print advertisements and discounts offered as a part of a grand opening campaign. Below is a description of how the business intends to market its services to the general public. The Company also intends on hiring a local public relations firm that will promote reviews and articles about the restaurant, and its Zambian traditional food and relevant hours of operation and pricing. We will invite local food critics in order for us to generate positive publicity about the restaurant. The Company will maintain a sizable amount of print and traditional advertising methods within local the local market to promote the Zambian products that the Company is selling. At the onset of operations, the Company will distribute an expansive number of coupons for lower priced fare within local circulars. 2.4 PRICING Management anticipates that the business will generate approximately k35 per person for an entre e. If alcohol is served, Management expects that the total per person revenues generated for a meal will range from k355 to k55. 3.0 PRODUCTION PLAN. 3.1 PRODUCTION AND CONDITION OF PRODUCTION ASSETS In the near future there will need to be expand the venue in order to accommodate a volume of 100 people per day .because at the moment the restaurant can only accommodate 50 people due to lack of enough cooking facilities. With the current equipment and the new equipment that will be purchased, the facility will be equal to or better than that of the competition. Analysis of current accounting records shows the facility, with good management and workers, is able to produce product in a cost effective manner. 3.2 EQUIPMENT TO BE PURCHASED A bigger stove 2 big deep freezers 6 pressure cookers 3.3 LABOUR Existing staff is adequate and can handle any increase in volume. Additional training required for use of new equipment will be provided on contract by the equipment vendor. If new workers are needed, existing employees will help recruit new employees. quality manager. 3.4 MATERIAL\PRODUCTS Our Beef and pork products will be supplied by Zambeef plc, the other products such as vegetables; e.t.c will be supplied by Shoprite Zambia. Purchase schedules will be set to include purchase from all members based on product availability. 4.0 FINANCIAL PLAN 4.1 UNDERLYING ASSUMPTIONS The Company has based its Pro-forma financial statements on the following: The restaurant will have an annual revenue growth rate of 10% per year. The Owner will acquire K175, 000 of debt funds to develop the business. The loan will have a 10 year term with a 9% interest rate. 4.2 SENSITIVITY ANALYSIS In the event of an economic downturn, the business may have a decline in its revenues. However, we will generate substantial gross margins from its food and beverage sales, and despite a decrease in top line income, the business will be able to remain profitable and cash flow positive. 4.3 SOURCE OF FUNDS Financing Equity contributions Management investment k 25,000.00 Total equity financing k 25,000.00 Banks and lenders k175,000.00 Total debt financing k175,000.00 Total financing k200,000.00 Required: 1. Which areas, not covered in the proposal would you want further information on in order to fully appropriate the proposal (13 Marks) 2. Does the concept offer good value for money in relation to the proposed debt financing in your view? Please explain your answer using relevant metrics and analysis. (6 Marks) 3. Are there any areas that concern you in relation to the proposal? If so what are they and how would you probe further into these? (6 Marks) 4. Five extra marks for ingenuity and good presentation of work