TheBusinessProposal

ThefollowingisabusinessproposalforSecretRecipesRestauranttoZANACOinorderto accessaloantowardsthefinancingofthebusiness.Readthroughandanswerthequestionsthat follow.

TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY

2.0 MARKETING PLAN

3.0 PRODUCTION PLAN

4.0 FINANCIAL PLAN

1.0 EXECUTIVE SUMMARY

SecretRecipesRestaurantisarestaurantwithhighqualityproducts.itintendstobeestablished inDecember2020.itwillprovideabrilliantandrelaxingatmosphereforitscustomers,it.this restaurantwillalsoservesteak,chops,porkchickenandotherZambiantraditionaldishes.The start-upmanagementteamwillcombineexpertisemanagerandthechefs.Theyneedtohaveat least4yearsexperienceonrestaurant. Addedvalue

-providing unique food,excellent services andelegant environment

-reducelocalemploymentpressure

-promotinglocaleconomyandtraditionalZambianculturebasedonsomebeneficialpolicies from government

Objectives

OuraimistobecomeZambia'sbestrestaurantinefficiency,profitability,andcustomer satisfaction.Wewillstrivetobetheleaderinrespondingtothechangingneedsandprioritiesof ourstakeholders.Wewillfurtherstrivetoextendservicestoawidercommunitysothatwith revenueearnedfromthecomparativelywell-offclients,weareabletoinvestmoreextensivelyin services specific to ourtarget clients.

2.0 MARKETING PLAN

Weintendtomaintainanextensivemarketingcampaignthatwillensuremaximumvisibilityfor thebusinessinitslocation.Belowisanoverviewofthemarketingstrategiesandobjectivesthat wewilluse oncewelaunch this restaurant.

2.1 MARKETINGOBJECTIVES

-ImplementalocalcampaignwiththeCompany'stargetedmarketviatheuseofflyers,local newspaper advertisements, andword of mouth advertising.

-Hireapublicrelationsfirm to provide reviewsand articles about theCompany's grand opening.

2.2 LOCATION Ourrestaurant willbelocated along freedomavenue,Kitwe. This locationwillbein thecenter of the community,giving us high exposure. 2.3MARKETINGSTRATEGIES

Weintendonusinganumberofmarketingstrategiesthatwillallowustoeasilytargetmenand womenwithintargetedmarket.Thesestrategiesincludetraditionalprintadvertisementsand discountsofferedasapartofagrandopeningcampaign.Belowisadescriptionofhowthe businessintendstomarketitsservicestothegeneralpublic.TheCompanyalsointendsonhiring alocalpublicrelationsfirmthatwillpromotereviewsandarticlesabouttherestaurant,andits Zambiantraditionalfoodandrelevanthoursofoperationandpricing.Wewillinvitelocalfood critics inorder for us to generatepositivepublicityabout therestaurant.TheCompanywillmaintainasizableamountofprintandtraditionaladvertisingmethodswithin localthelocalmarkettopromotetheZambianproductsthattheCompanyisselling.Attheonset ofoperations,theCompanywilldistributeanexpansivenumberofcouponsforlowerpricedfare within local circulars.

2.4 PRICINGManagementanticipatesthatthebusinesswillgenerateapproximatelyk35perpersonforan entree.Ifalcoholisserved,Managementexpectsthatthetotalperpersonrevenuesgeneratedfor ameal will rangefrom K55 to k355.

3.0 PRODUCTION PLAN

3.1 PRODUCTION AND CONDITION OF PRODUCTION ASSETS

Inthenearfuturetherewillneedtobeexpandthevenueinordertoaccommodateavolumeof 100peopleperday.becauseatthemomenttherestaurantcanonlyaccommodate50peopledue tolackofenoughcookingfacilities.Withthecurrentequipmentandthenewequipmentthatwill bepurchased,thefacilitywillbeequaltoorbetterthanthatofthecompetition.Analysisof currentaccountingrecordsshowsthefacility,withgoodmanagementandworkers,isableto produceproduct in acosteffectivemanner.

3.2 EQUIPMENT TOBEPURCHASED

A bigger stove

2 big deep freezers

6 pressure cookers

3.3 LABOUR

Existing staffis adequateand can handleanyincreasein volume.Additional training required for useofnewequipmentwillbeprovidedoncontractbytheequipmentvendor.Ifnewworkersare needed,existing employees willhelprecruit new employees. qualitymanager.

3.4 MATERIAL\PRODUCTS

OurBeefandporkproductswillbesuppliedbyZambeefplc,theotherproductssuchas vegetables;e.t.cwillbesuppliedbyShopriteZambia.Purchasescheduleswillbesettoinclude purchasefrom all members based on product availability.

4.0 FINANCIALPLAN

4.1 UNDERLYING ASSUMPTIONS

TheCompanyhas basedits Pro-forma financial statements onthe following:Therestaurantwillhavean annual revenuegrowth rate of10%peryear.TheOwner will acquireK175,000 ofdebt fundsto develop thebusiness.Theloan will havea10year term with a9% interest rate.

4.2 SENSITIVITY ANALYSISInthe event ofan economicdownturn, the business mayhaveadeclineinits revenues.However, wewillgeneratesubstantialgrossmarginsfromitsfoodandbeveragesales,anddespitea decreasein top lineincome, thebusiness will be able to remain profitableand cash flow positive.

4.3 SOURCEOF FUNDS

Financing

Equity contributions

Management investmentk 25,000.00Total equityfinancingk 25,000.00

Banks and lenders k175,000.00

Total debtfinancing k175,000.00

Total financingk200,000.00

Required:

1. Whichareas,notcoveredintheproposalwouldyouwantfurtherinformationoninorderto fullyappropriatethe proposal(13Marks)

2. Doestheconceptoffergoodvalueformoneyinrelationtotheproposeddebtfinancingin yourview?Pleaseexplainyouranswer using relevant metrics and analysis.(6Marks)

3. Arethereanyareasthatconcernyouinrelationtotheproposal?Ifsowhataretheyandhow wouldyou probefurtherinto these?(6Marks)