Design & complete a business development plan for the New Venture, together with the requirements for implementation and the expected financial outcomes for shareholders, over the next 3 years.

Within the licensed restaurant market space in London, there is a business opportunity to establish a restaurant that combines the classical dishes from selected South East Asian countries which until now have been served in dedicated country based restaurants.

The opportunity is for a Multi-Asian Cuisine Restaurant serving food from Thailand, Singapore, Malaysia & Indonesia as a hybrid restaurant offering an eclectic experience for customers. The market need has been confirmed, there is growth in this sector of the restaurant industry and the business potential would suggest a future horizon for a potential chain of restaurants with longer term franchising potential.

The restaurant will be named “ PAPAYA ” to symbolise a tropical fruit which crosses these Asian country cultures and is widely known.

The market location for this business start-up, will be in Bayswater London W2 a vibrant area where there is a ‘retail concentration’ for restaurants and dining opportunities. This business development proposal outlines the business concept, feasibility studies completed, the business model in detail together with the business development plan for the launch of a sustainable new business with financial projections and risk assessments.

⦁ INTRODUCTION

The business opportunity presented here for a new licensed restaurant in London has been inspired by the ambition of a group of friends who are experienced in restaurant management & business consulting.

After knowing each other for around seven years and with the shared passion to open a New Style restaurant offering Multi-Asian Cuisine at a mid-market price, the business concept has taken shape over the past 2 years during which time seed funding for the new venture has been put together.

This proposal explains the business concept, makes the business case and through feasibility research proposes a workable business model.

This proposal culminates in a business plan for the new business venture.

⦁ Terms of Reference

This business development proposal for the Papaya Restaurant is designed to : –

⦁ Outline the New Business Concept

⦁ Assess the Existing Position and Readiness for the New Business Venture

⦁ States, as appropriate, assumptions upon which the new business development proposals and financial projections are based

⦁ Produce adequate research to assess the feasibility of the new business concept

⦁ Produce a Business Model with well-defined resources requirements and constraints as deemed appropriate

⦁ Design & complete a business development plan for the New Venture, together with the requirements for implementation and the expected financial outcomes for shareholders, over the next 3 years

⦁ Approach

The sequential nature of this proposal is driven from an explanation of the business concept for the Papaya Restaurant to include the essence of the concept statement and from this basis, details of the feasibility research undertaken is then outlined.

From the positive findings of the feasibility studies completed, the case is made to proceed to the creation of a business model to show how the new business will create value and then produce sustainable net cashflow and profit.

From these foundations, a business plan is designed to show how the business is intended to work over the next
three years to give a positive return on investment for the shareholders.

⦁ Concepts, Models and Frameworks for Thinking Applied

This assignment is the final stage of the MBA and as a final project, it is designed to integrate the learning acquired and integrate it into a final project paper, in this case for a new business start-up.

The MBA course has been essential to achieve this outcome.

The Concept Models and Tools used in the creation of the Proposal are as follows : –

⦁ Assumption Setting
⦁ Timescales For Achievement
⦁ The Concept Statement
⦁ Target Market
⦁ Value Added
⦁ Value Propositions
⦁ Window of Opportunity

⦁ Feasibility Research
⦁ Industry Attractiveness
⦁ Market Gap
⦁ Market Attractiveness
⦁ Segmentation
⦁ Buying Behaviour
⦁ Start-Up Capital
⦁ Working Capital
⦁ Cash Flow
⦁ Break-Even Analysis
⦁ The Business Model Canvas
⦁ Competitive Strategy
⦁ Value Chain
⦁ The Business Plan
⦁ The Marketing Plan
⦁ Risk Assessment
⦁ Development & Operations Plans, Implementation Plan
⦁ Business Sustainability
⦁ Financial Statements

⦁ Relevant Core MBA Module Literature Sources : Textbooks and Manual : –

⦁ Brooks, R. (2009), Financial Management : Core Concepts, 1st Edition, Pearson Education

⦁ Hiisch, R., Peters, M. and Shepherd, D. (2009), Entrepreneurship, Erwin McGraw-Hill

⦁ Johnson, J., Whittington R. & Scholes (2011), Exploring Corporate Strategy, 9th Edition, Pearson Education

⦁ Lancaster, G. and Massingham, L. (2011), Essentials of Marketing Management, Routledge

⦁ LSC, Entrepreneurship & Management Skills, MBA Course Manual

⦁ Actionable Assumptions
The following assumptions are made as a foundation for the business proposal.

⦁ Following the acceptance of the proposal for the MBA final Project, the business development team will pursue this new business concept as detailed.

⦁ Market Demand, as assessed, is sustainable.

⦁ The team remain committed to the New Venture.

⦁ The business environment in London’s Bayswater area where the restaurant is located remain
buoyant despite national economic turbulence.

⦁ Funds will be deployed in accordance with the budgets prepared and bank facilities will be available for overdraft utilisation.

⦁ The preparation of the restaurant will be effectively project managed by the appointed consultants
& restaurant architects.

⦁ Chefs remain committed to the project.

⦁ Timescale
This proposal for the business start-up and follow-through will be for an initial 3-year period.

⦁ THE BUSINESS CONCEPT

“ An Innovation requires an instinctive understanding of what your customer wants ”
— Richard Branson
DTI Innovation Lecture 1998

Bessant and Tidd (2011, p19) state the routes to innovation, and in this sense Papaya, will require a paradigm shift in the mind of the customer to achieve the required product innovation. A UK government White Paper ‘Innovation Nation’ 2007 claimed that Innovation is the successful exploration of new ideas. In all respects, Papaya is an innovation where the idea will be recognised as an opportunity to create value.

⦁ Outline Description of the Business
This entrepreneurial business development proposal is for a new full service restaurant as a start-up business. The business is intended as an innovation into a crowded London market whereby Multi-Asian Cuisine will be presented under the proposed restaurant name of ‘ Papaya ’ (which is a tropical fruit grown and widely loved throughout South East Asia).

⦁ The Concept Statement
The business concept statement, which also has been subjected to feasibility research, among focus groups of potential customers is as follows : –

⦁ The Concept Statement
The business concept statement, which also has been subjected to feasibility research, among focus groups of potential customers is as follows : –

⦁ The Product / Service
The restaurant’s 180-seats capacity, located in Bayswater’s Westbourne Grove London W2 is to be situated in a busy, trendy area where a wide provision of restaurant experiences prevail. A mid-market dining experience is envisaged with take-away food orders catered for by phone and on-line.

Classical traditional dishes will be served from Thailand, Malaysia, Singapore and Indonesia to provide a ‘taste of the Asean Region’.

⦁ The Target Market and Value Added Features
The primary target market will be drawn from local patronage of customers of all age, gender & social groupings, favourably disposed to Asian Cuisine, living within a 2-mile radius, although a substantial secondary market will be from tourists visiting Bayswater.

The take-away market will be from those living in local apartments and nearby hotels for which
a delivery service through a restaurant courier service called ‘Room Service’ will be available.

The wide variety of cuisine textures & flavours will provide a unique experience presented as a themed restaurant setting, which represents a tropical setting using cane & rattan furniture and ‘jungle like’ planting.

Special features of the restaurant are the 4 chefs each from the respective culinary offered on the menu.

⦁ Those Involved
The investors are Michael Yoke, a Malaysian restauranteur with 20 years experience in London’s Chinatown. Wendy Goh as the business manager who has worked with Michael Yoke for 10 years. Adrian Mason, a British businessman who has a management consulting business in South East Asia with offices in each of the few countries of the selected cuisines for the new restaurant. Each of the four chefs have a minimum of 5 years experience in London Hotels and Restaurants. Local accountants and lawyers have been appointed and bank accounts opened.

⦁ The Window of Opportunity
The site selected for the Restaurant has become available because the existing lease on the current Chinese restaurant has expired and the owners seek to return to Malaysia. They are family friends to Michael Yoke.

The current landlord will extend a new lease for 10 years. The new restaurant is planned to open within the next 6 months.

⦁ FEASIBILITY RESEARCH

The ‘innovation space’ for the new restaurant will require a business case to be built and this is where feasibility research is required to align potential ambition with commercial ability and in turn create value to grow new ventures. ‘The value of validating a New Business idea’ according to Barringer and Ireland (2010) is at the heart of feasibility analysis.

Goffin and Mitchell (2010 claims that one key ingredient to assess commercial feasibility is customer
focused ideas.

It is against this backcloth that feasibility for the Papaya Restaurant has been undertaken.

The purpose of the feasibility research undertaken was to determine ‘the gap in the market’ and ‘the market in the gap’ to thereby reduce the risk in the commercial decision to start this new restaurant business.

Two Questions were answered :

⦁ Is the local restaurant industry ‘space’ attractive ?
⦁ Is there viable market demand ?

⦁ Restaurant Industry Attractiveness
The market space remains attractive, with the numbers of restaurants in London growing across all sectors, within the location of London’s Bayswater, even though the maturity stage of the industry life cycle is apparent, business is this industry location remains sustainable.

Within a 2-mile radius, there are over 350 restaurants, but all serving a range of ‘focused cuisine’, including fast food restaurants. There is no direct competition for Multi-Asian Cuisines. Competition will be from dedicated Thai and Indonesian cuisines only, of which there is one Indonesian and six Thai restaurants, each well established for the past 7 years or more.

The barriers to entry into the restaurant industry are low, close substitute food products are diverse and the bargaining power resides with the customer. However the industry upside potential remains buoyant.

⦁ Market Attractiveness
Primary Research
Focus Group Research was conducted among
⦁ Potential Customers – 4 Focus Group discussions of 8 people
⦁ Restaurant Owners – 1 Focus Group discussion of 5 people

The concept testing results arising both Potential Customers and Restaurant Owners confirms there is a gap in the market. Moreover there was enthusiasm among those who would be potential customers.
The Key Customer Groups which have been determined are as follows in Figure 1 below : –

POTENTIAL BUYING BEHAVIOUR FOR THE PAPAYA RESTAURANT

Forecasted
% Revenue

Lunch Time
12.30 – 3.00 pm

Early Dinner 6pm – 8pm

Late Dinner 8pm – 11pm

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