Assessment 2 (Project 1): A draft business plan
Part A: Analysing the outline of the business plan
A. Weaknesses in the plan
- No executive summary
- Vision statement is not included
- No mission statement
- Organisational values are not listed
- No competitive analysis, where Pesto’s performance against competitors is outlined (both strengths and weaknesses)
B. Strengths in the Plan
- Provides market analysis and strategy - identifies geographic location of target market, characteristics and needs of target audience
- The outline gives business details
- It introduces the organisation’s management and ownership and their roles
- Financial plan section is included, showing how the company anticipates to generate revenue and funding
C. Summary of necessary information:
The following details will be necessary:
- Mission statement
- Vision statement
- Products/services
- Business registration details like permit and licenses
Part B: Role play – Discussion with business owner
[Arrange for the discussion with your assessor]
Part C: A draft business plan for approval
· Executive summary
· Description of the business
o Business details:
Pesto’s is a medium-sized restaurant located in Brunswick, Victoria. Chef Mario Vittorio owns this new restaurant. Pesto’s presents to customers an unusual menu that includes a variety of ethnic ingredients and recipes. Chef Mario plans to add more vegan and gluten-free dishes, to catch up with the industry trends. The restaurant target market consists of individuals that desire healthy eating. Pesto’s generally targets individuals of ages 18 to 35 that prefer local organic food, affluent older customers, and parents that desire to expose their children to healthy eating and lifestyle. Chef Mario’s restaurant is also suitable for individual who, aside from healthy eating, are conscious social and environmental values that make earth a better place. To avoid reliance on fossil fuel for transportation, Pesto’s sources ingredients locally. This plan is in line with the restaurant’s sustainable development goals. As a startup, Pesto’s does not have existing customers, history, or projects. Even then, the proprietors of this restaurant have considerable experience in the industry and can fulfill financial capacity required to run the business successfully.
o Vision Statement
To become customers’ favourite, by surpassing our own accomplishments to get the recognition as industry leader
l Practice shared commitment towards excellence
l Provide high quality food
l Offer exceptional care to staff and customers
o Mission Statement
To serve and gluten-free ethnic dishes, while respecting the social and environment values
o Registration details
The following are the required documents:
l Business license
l Food handlers’ permit
l Food service license
l Sales tax license
l Liquor license
l Resale permit
l Dumpster placement permit
o Business premises
Below are the relevant document:
l Building health permit
l Certificate of occupancy
o Organisation chart
o Management and ownership
Pesto’s is owned by Chef Marion, who has 20 years experience as chef and is an award winner in the industry. Chef Mario has also performed in TV shows for a number of years. Flora Simmonds, who has experience handling 6 to 45 staff, will help Chef Mario to manage the business. Jane Tully, whi has 7 years’experience as accountant, will complete finance and accounting tasks. As Head Cook, Tim Smith will utilise his knowledge of vegan, vegetarian, and suitable foods to improve quality of the dishes offered by Pesto’s.
· Products/services
Pesto’s specialises in ethnic ingredients and recipes. The industry trend that is most suitable for Chef Mario is focus on healthy food. The restaurant will, thus, serve vegan and gluten-free food to its health conscious customers.
· Insurance
Business property insurance
· Laws affecting business policies and procedures
i. The Victorian Food Act 1984 (the Act)
ii. Australia New Zealand Food Standards Code
· A S.W.O.T. analysis
Strengths | Weaknesses |
Proprietors have enough funds to finance the startup The restaurant owner is a popular figure and an award winner in the industry Both the accountant and head cook are experienced in the industry | CEO has no experience managing a restaurant The business does not have existing customers The healthy dishes are expensive |
Opportunities | Threats |
Chef Mario can increase the list of dishes because vegan and gluten-free foods are on demand in the industry | Several healthy eating restaurants are located in Brunswick, meaning increased competition |
· Market requirements
i. Product/service profile
Use locally sourced ethnic ingredients and recipes to prepare healthy food (gluten-free and vegan dishes).
ii. Customer Profile
Pesto’s target market comprise customers that want healthy food, are conscious about the environment, and respect their social values (prefer food made using ethnic ingredients and recipes).
iii. Pricing options
The healthy dishes are expensive, and part of the reason Pesto’s targets the older affluent customers who can buy the food.
· Competitors and their pricing structures
Pesto’s competes with restaurants that serve healthy food in Brunswick, including:
a) Kevabs, which charges $0 to $13 per menu item
b) The Cornish Arms Hotel whose menu items go at $7 to $15
c) The Origin Tales, whose organic food items cost $1 to $15.9
· Target market and marketing strategy
The company’s website and Facebook page is where Pesto’s menu and prices will be displayed. Buyers will, thus, view the dishes on this platforms and know what to order.
Pesto’s will also use promotions such as discounts and offers to help customers get their desired food at lower costs.
· Financial, human and physical resource
Financial resource: Pesto’s operation costs for the first year amount to $845,050. The proprietors will raise the money. In the first year, the projected net profits are $23,950.
Human resource: The crucial staff and employees include the CEO, accountant, restaurant manager, head cook, cooks, and waitstaff.
· Productivity and performance targets
Performance measures for financial management are:
i. Gross profit margin of approximately 10%
ii. Net profit of $23,950
· Expenses actual to projection
Pesto’s expenses include purchase of food and beverages, equipment lease, payroll, insurance payments, maintenance, credit card fees, team building investment, etc. All these amount to $845,050.
· Income actual to projection
o Performance measure for marketing strategy
i. Continuous growth of customer base
ii. Constant growth in sales revenue
o Performance measures for customer satisfaction
i. Repeated purchases
ii. Loyalty and trust
iii. Recommendation of Pesto’s to friends and relatives
o Performance measures for sustainability
i. Efficient use of water and energy
ii. Recycling of cardboard for packaging purposes
iii. Minimal use of fossil fuels, and emission
o Plan of testing the performance measurement systems, including:
Ø Semi-annual and annual staff and customer surveys
Ø Analysis and review of quarterly, semi-annual, and annual business performance reports
Ø Stakeholder feedback
Ø Evaluation of planned versus actual performance of key indicators
· Acceptable levels of variance to planned objectives (where applicable)
If outcomes exceed all the key performance indicators or the planned objectives’ predictions.
· The timeframe for each report
Reports will be provided on quarterly, semi-annual, and annual basis
· Benchmarking to be used
A comparison of business results with the preset objectives
· Key stakeholder for each report
Stakeholders will be the same for all reports. The stakeholders are:
i. Management
ii. Employees
iii. Customers
iv. Business consultants
Assessment 3 (Project 2): – Finalised business plan
Part A: Draft plan presentation
[Role play organised by the assessor]
TIPS: How to ensure stakeholders’ needs are fulfilled
The company will keep (regular) effective communication with stakeholders and inform the about business activities based on the level of interest in the company.
Part B: Prepare the final draft of the business plan
[Use changes noted from the above role play task to make changes to the draft business plan in Assessment 2, Part C.]
Part C: Implement and monitor the business plan
Plan for implementing and monitoring the business plan
Activities | Responsible staff | Date/Time |
Compare plan performance against indicators | Restaurant Manager, HR Manager | Quarterly, semi-annually, annually |
Review performance indicators (and refining, if necessary) | Restaurant Manager, HR Manager, Accounts and Finance Manager | Quarterly, semi-annually, annually |
Availing skilled labour | Jane Tully (as HR manager) | Semi-annually, annually |
Test and refine the performance measurement systems | Restaurant manager | Annually, semi-annually |
Timely reporting on all key business aspects | Restaurant Manager, Head Cook, Cooks, Wait Staff | Anytime |
Making user-friendly business reports | Accounts and finance manager (Jane Tully) | Quarterly, semi-annually, annually |
Good balance of financial and non-financial performance in the reporting | Restaurant Manager, Accounts and Finance Manager | Quarterly, semi-annually, annually |
Reporting system and product failures, and variances to the business plan | Cooks, wait staff, and Restaurant Manager | Anytime, whenever failures are encountered |
Analyse performance reports against planned objectives | Restaurant Manager | Quarterly, semi-annually, and annually |
Implement continuous improvement through review of processes and work methods | CEO, Restaurant manager, Head Cook | Quarterly, semi-annually, annually |
Assessment 4 (Project 3): Business performance
Part A: Continuous improvement plan
Activity | How to achieve it | Time frame | Responsibilities | Required resources |
Training of kitchen staff | Guide kitchen staff on serving, portion control, and food presentation to ensure consistency | 2 weeks | HR Manager Business owner Restaurant Manager Accounts and Finance Manager Head Cook | Training materials (pictures, videos, etc) and trainers |
Coach wait staff | Teach waitstaff to make menu suggestions. Also, explain all dishes to wait staff and guide them of how to explain popular dishes to customers. | 1-3 Weeks | HR Manager, Head Cook Restaurant Manager Accounts and Finance Manager | Coach, Pictures on menus, and relevant illustrations |
Roster planning | Offer training on staff rostering, and suggest technologies to boost coordination of staff | 2-3 weeks | HR Manager Restaurant Manager Accounts and Finance Manager | Training materials, trainers, and technology options |
Part B: System failures, and variances
· Analysis of performance reports against planned objectives
Overall the report shows that the benchmark points for customers are at least 50% accomplished within the first 6 months. At 25% repeat customers, for example, the company already went half-way its target point. Customer satisfaction level (75%) and customer retention ability (90%) missed the benchmark levels by 20% and 25%, respectively. On service performance, wait time performed the poorest by being 2 minutes ahead of the expected time. The ability to meet deadlines (85%) and service quality (60%) missed target by 10% and 35%, respectively.
· Review processes followed
A semi-annual survey of staff and customers was conducted to determine how employees performed and the impact of staff activities on customer satisfaction.
· Failures in communication, planning, reporting and training
Communication failures is evident from the fact that waitstaff have not reported the challenges they face when explaining dishes to customers or suggesting menu, until customers talked about the issues.
The failure in planning process relates to lack of consideration for adequate training of kitchen staff, Bar Manager, and wait staff, before they commenced working.
If reporting process was effective, all the issues that staff experienced would have been known by the first quarter of business activity.
Failure in training is clear from the vast lack of crucial skills and knowledge that different categories of staff need to complete assigned roles
· Description of the continuous improvement plan
The purpose of creating the continuous improvement plan is to solve the challenges reported in the semi-annual survey. Customer complaints revealed unsatisfactory staff performance and both head cook and bar manager agreed that they faced some challenges. Kitchen staff will, thus, receive training on preparation and serving of the dishes, portioning and presentation. The training is successful if kitchen staff can make consistent portions, presentation, and taste of food. Head Cook is already knowledgeable in this area and can conduct the necessary training with the help of the business owner and other management staff. Waitstaff should also get adequate coaching to enable them make menu suggestions and explain the dishes clearly. Also, Pesto’s management should invest in technology that can assist bar manager with his rostering and staff coordination tasks.
Part C: Analysing and reviewing performance reports
· Analysis of financial and non-financial performance reports against planned objectives
All the performance indicated in the report compare well with the planned objectives. For non-financial category, Pesto’s marketing costs matched the planned value and training hours were only 4 hours away from target. Also 60% of customer calls resulted in booking when planned figure was 80%, only 20% less. For brand awareness, already 75% of customers can recommend the restaurant to others (out of planned 83%) and another 75% (out of the planned 82%) want to eat frequently at Pesto’s. Under sustainability, recycling of cardboard for packaging exceeded expectation (90%) by attaining 95%. Installation of energy efficient equipment missed the target by 20% and planned reduction in water consumption was halved (5% out of 10%). Financial indicators also have impressive outcomes as food costs accounted for less than half the food revenue (at 40%), beverage costs also at 30% the revenue from beverages, and labour expenses were a quarter of sales revenue. Again, the company managed to minimise expenses by $18,498 (from planned $845,050 to 826,552). However, the net profit before tax was $1,198 less than planned amount.
· The suitability of performance indicators and required changes to achieve organisational goals
The benchmark levels set for majority of the performance indicators are achievable and realistic. However, the benchmark levels for marketing cost as revenue percentage and the recycling of cardboard for packaging should be set higher than the present level.
· Performance improvement strategies
The following improvements are necessary:
i. Increase the benchmark level for total marketing cost as percentage of revenue to 8%
ii. Increase the hours of training per employee to attain the 14 hours benchmark level
iii. Invest in turning customer calls into booking to reach the 80% mark
iv. Improve marketing strategies to encourage brand trust and brand loyalty to planned levels of 83% and 82%
v. Promote leasing and installation of energy efficient equipment to reach the 100% target
vi. Raise the benchmark for cardboard recycling to 100%
vii. Encourage reduction of water consumption to meet the next half of target point in the next 6 months or year
viii. Pesto’s management should also minimise food cost average, beverage costs, and labour costs
ix. Pesto’s management should also continue to minimise total operating expenses and increase profitability
