2. Confidentiality Agreement
The undersigned reader ac knowledges that the information provided by
_________________________ in this business plan is confidential; therefore, reader agrees not to
disc lose it without the express written permission of _________________________.
It is ac knowledged by reader that information to be furnished in this business plan is in all respec ts
confidential in nature, other than information which is in the public domain through other means
and that any disc losure or use of same by reader, may cause serious harm or damage to
_________________________.
Upon request, this document is to be immediately returned to _________________________.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date
This is a business plan. It does not imply an offering of securities.
3. Table of Contents
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................2
1.1 Mission........................................................................................................................................2
1.2 Keys to Success ........................................................................................................................2
1.3 Objectives ...................................................................................................................................3
2.0 Company Summary.............................................................................................................................4
2.1 Company Ownership .................................................................................................................4
2.2 Start-up Summary ......................................................................................................................4
2.2.1 Location & Operations..................................................................................................5
Chart: Start-up .........................................................................................................................6
Table: Start-up .........................................................................................................................7
Table: Start-up Funding ..........................................................................................................8
3.0 Services................................................................................................................................................8
3.1 Zara Menus...............................................................................................................................10
4.0 Market Analysis Summary................................................................................................................11
4.1 Market Segmentation..............................................................................................................11
Table: Market Analysis .........................................................................................................12
Chart: Market Profile (Pie) ...................................................................................................12
4.2 Target Market Segment Strategy...........................................................................................12
4.3 Service Business Analysis .....................................................................................................13
4.3.1 Competition and Buying Patterns .............................................................................13
5.0 Strategy and Implementation Summary..........................................................................................14
5.1 Competitive Edge....................................................................................................................14
5.1.1 Competitor Analysis ...................................................................................................14
5.2 Marketing Strategy ..................................................................................................................17
5.2.1 Marketing Program .....................................................................................................19
5.3 Sales Strategy..........................................................................................................................20
5.3.1 Sales Forecast ............................................................................................................21
Table: Sales Forecast.................................................................................................21
Chart: Sales Monthly ...................................................................................................21
Chart: Sales by Year ...................................................................................................22
5.4 Milestones ................................................................................................................................22
Table: Milestones..................................................................................................................23
6.0 Web Plan Summary ..........................................................................................................................24
7.0 Management Summary ....................................................................................................................24
7.1 Management Team .................................................................................................................26
7.2 Personnel Plan.........................................................................................................................27
Table: Personnel ...................................................................................................................29
8.0 Financial Plan ....................................................................................................................................30
8.1 Investment Opportunities.........................................................................................................30
8.2 Important Assumptions............................................................................................................31
8.2.1 Risk Analysis/Mitigation .............................................................................................33
Table: General Assumptions ...............................................................................................34
8.3 Profit and Loss Statement ......................................................................................................35
Chart: Profit Monthly .............................................................................................................35
Chart: Profit Yearly................................................................................................................36
Chart: Gross Margin Monthly ...............................................................................................36
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5. Zara Restaurant & Lounge
1.0 Executive Summary
Our initial statement to Investors and Financial Lenders, this restaurant/ethnic food business
plan, is a candid disc losure of the Zara Restaurant & Lounge business proposal - our intent
is to set realistic business expec tations, and eliminate any questions about the profitability of
this business venture.
Entrepreneurs have a tendency to paint the restaurant business plan with a very optimistic
brush, highlighting strengths and camouflaging the risks. We, as business owners, have a
vested stake and financial commitment in the success of this restaurant. Our intent is to have
a definitive business, financial, and marketing plan that not only serves our need for capital
financing, but is utilized as our daily business roadmap. We have taken all prec autions to validate
our business and financial models, foc using on realistic projec tions. We have ac complished this
as follows:
1. Our financial model is rooted in industry facts, not optimism. We have based costs
on our vast industry and prac tical experience with similar ventures, validation against
National Restaurant industry cost averages, and analysis against loc al Atlanta market
averages. We have taken a collec tive look at all figures to make solid business estimates.
2. Our business concept was derived from detailed Market Analyses. Instead of
building a business around a prec onceived concept, we analysed the market findings
and built a concept around our consumers. In other words, our business is built to service
an unmet consumer 'want'.
3. A buffered financial plan that ensures adequate capitalization. A contingency
buffer is included in the start-up cost to ensure the business in not under financed, as
well as giving the business adequate funding to sustain it in the first six months of start-
up. Our industry experience confirms a longer ramp-up stage for restaurants over other
retail/service businesses. A common mistake for new entrepreneurs , but fully addressed
in this business plan.
4. A solid Risk Mitigation Plan. We have evaluated traditional and non-traditional risks
associated with Restaurant failure and ac counted for them direc tly in the business plan.
Instead of dismissing the risks, we have identified valid mitigation strategies for each.
5. Deep Management Experience. Our management team has 20 years combined
experience, involved with over 86 restaurant openings, and deep involvement with the
Atlanta restaurant industry.
The total capital requirement to launch Zara Restaurant & Lounge is $740,000, of which
$643,000 is alloc ated to start-up capital, and $97,000 as business operations cash reserve.
This Plan is being submitted in order to secure a Business loan for $430,000. The loan will be
used towards Equipment purchase, Design, Construction, and Operational Start-Up expenses.
Owners, Mr. Alex Hunte and Mr. Peter Smith are investing $110,000 in personal capital. Private
Investors, who will be part owners with a non-managerial interest in the business, will contribute
the remaining $200,000.
As owners, our commitment is to take personal ac countability for all financial debt. We have
taken the necessary prec autions to ensure the business is fully capitalized, and have
addressed all financial shortfalls to ensure a successful business start-up. Under a realistic
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6. Zara Restaurant & Lounge
sc enario, the company should have over $84,000 in c ash balance the third year. Even with
the worst-case sales sc enario, we reach a Net Worth break even at the end of Year 5. On a
linear projec tion, the entire financial debt will be retired by Year 7.
1.1 Mission
· Zara will be an inspiring restaurant, combining an eclec tic atmosphere with excellent and
interesting food. The mission is to have not only a great food selec tion, but also
efficient and superior service - customer satisfac tion is our paramount objec tive. Zara will
be the restaurant of choice for a mature and adult crowd, couples and singles, young and
old, male or female.
· Employee welfare, participation, and training are equally important to our success.
Everyone is treated fairly and with the utmost respec t. Our employees will feel a part of
the success of Zara Restaurant & Lounge.
· Our concept combines variety, ambiance, entertainment and a superior staff to create
a sense of 'plac e' in order to reach our goal of overall value in the dining/entertainment
experience. We offer fair profits for the owners and investors, and a rewarding plac e to
work for the employees.
1.2 Keys to Success
1. Unique, Innovative & Contemporary: The creation of a unique and innovative fine
dining atmosphere will differentiate us from the competition. The restaurant will stand out
from the other restaurants in the area bec ause of the unique design and dec or. We will
offer a fine dining experience in an elec tric atmosphere.
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7. Zara Restaurant & Lounge
2. Product quality: great food, great service and atmosphere.
3. ‘Spice of Life' Menu: The menu will appeal to a wide and varied clientele. Our ec lec tic
menu features regional specialties around the globe, from Spanish ceviche, to Thai and
Indian curries, to loc al crabcakes.
4. Employee Retention Focus: Employee retention and development programs will be a
primary foc us and success platform for this business. Through these programs, we will
be able to draw seasoned and elite professionals and build a committed work force. We
have budgeted for a stoc k option program for Chef and Management positions to
subsidize a lower salary base. This lowers our immediate overhead and attrac ts quality
staff.
5. Cost Control Focus: We will control costs at all times, without exception. Cost Control
will be an integrated function of the restaurant from the onset. Cost control is about
managing the numbers - interpreting and comparing the numbers that impac t the bottom
line. 80 percent of the success of a restaurant is determined before it opens. Our foc us is
to reduce the cost of goods sold to meet our profit margin goals by managing the
following crucial elements of cost: Purchasing, Rec eiving, Storage, Issuing Inventory,
Rough Preparation, Service Preparation, Portioning, Order Taking, Cash Rec eipts, Bank
Deposits and Ac counts Payable. We will use of this restaurant/ethnic food business plan
to trac k ac tual costs against our forec asts in managing the business.
Due to intense competition, restauranteurs must look for ways to differentiate their business
to ac hieve and maintain a competitive advantage. Midtown/Downtown Atlanta's redevelopment
requires a plac e that will fit into the 'new look' of the community, one that is contemporary
and entertaining. Zara will fill that niche.
1.3 Objectives
Zara Restaurant & Lounge's objec tives for the first three years of operation include:
· Keeping food costs at less than 35% of revenue.
· Improving our Gross Margin from 65.41% in Year 1 to 67.10 in Year 2. These are
attainable targets; our ‘stretch' is to attain 70.73% by Year 3.
· Keeping employee labor cost between 37-39% of total sales.
· Remaining a small, unique restaurant with eclec tic food and service.
· Averaging sales between $1,200,000 - 1,500,000 per year.
· Promoting and expanding the Zara restaurant concept as a unique Midtown destination
restaurant.
· Expanding our marketing and advertising in Atlanta and in the neighboring suburbs
to increase our customer base.
· Ac hieving a profitable investment return for investors for Years 2 - 6.
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8. Zara Restaurant & Lounge
2.0 Company Summary
The Design
Zara Restaurant & Lounge is unique to Midtown Atlanta. The restaurant features 3 venues in one
(a concept called ‘Multi-Branding'): A Tapas Lounge, Cosmopolitan Bar, and Full Service Dining.
This concept offers customers variety, offering multiple dining and entertainment options within a
single establishment. The spatial and menu divisions will broaden our appeal and provide our
customers with a different experience on each visit.
The atmosphere caters to a young but mature adult crowd. This is not a family dining
establishment. Total space requirements are 3,000 square feet. In total, the restaurant will
provide seating for 110 patrons. Where possible, consideration will be given to incorporate a
dining patio. Zoning, parking, and ac cessibility issues will be reviewed as key criteria. We will
draw on our Advisory Board as part of the site selec tion and lease negotiation.
The Menu
Zara is foc used on servicing Atlanta's growing demand for an ethnic eating experience. For lac k
of a better term we are launching a ‘multi-ethnic' cuisine restaurant - a restaurant concept
that responds to Atlanta's need for selec tion and choice. Zara is a complimentary mingling of
international cuisine on a single menu. The Midtown demographics fit this concept perfectly.
The Management
Our management team has over 48 years combined experience in food, restaurant and hotel,
business management, finance, and marketing arenas.
2.1 Company Ownership
The restaurant will start out as an LLC corporation, owned by its founders, Zander Hunte and
Peter Smith. Mr. Smith will function as the General Manager and Exec utive Chef, and Mr. Hunte
as Managing Partner.
Mr. Hunte and Mr. Smith have a long-standing professional relationship in the restaurant
industry, stemming bac k to Toronto, Canada. Mr. Smith is an ac complished restauranteur, having
owned several full-service restaurants. He currently owns Brassaii Restaurant (www.brassaii.
com), and Bauhaus Bar and Nightclub. Mr. Smith is also an international Restaurant Consultant
for top organizations such as the Starwood Group, who own the hotel chains of The Westin,
Sheraton Hotels, Four Points, St. Regis, and W Hotels.
Mr. Hunte has a bac kground in International Business Management, and is certified in
Restaurant and Hotel Management. Under the management of Zander Hunte, Myth Restaurant
was a feature restaurant in Toronto, and distinguished as a top 10 restaurant while under his
management from 1992 - 1995.
2.2 Start-up Summary
We are currently negotiating a restaurant space of 3,000 sq. ft. in Midtown Atlanta, Georgia,
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9. Zara Restaurant & Lounge
and will open Zara in October of this year.
Our start-up costs are mostly expensed equipment, furniture, painting, rec onstruction, rent,
start-up labor, liquor license, and legal and consulting costs associated with opening our
restaurant. At the start of business, $97,000 will be alloc ated for business operations reserve.
This is a solid start-up forec ast based on our market analysis and our knowledge and
experience in the industry.
We will purchase the following $73,311 worth of current assets during start-up :
· Fixtures and Lighting: $32,250
· Bar Equipment: $26,183
· Sound and Televisions: $8,378
· Office Equipment (2 Computers, Fax, Printer, Safe): $6,500
Long-term Assets in the amount of $65,000 include all kitchen equipment.
We have budgeted for the services for a premier Restaurant Consultant familiar with the
Atlanta Market. This is espec ially key during the site selec tion and start-up stage. This company
will have an integral role in validating the final restaurant loc ation and personnel selec tion, and
participate on the Zara Advisory Board.
The two owners are personally committing $110,000 of capital, plus a $300,000 SBA 7(A) loan
guaranty. In addition, we have obtained a $130,000 grant from the city towards restoration of
our historical building, as part of the city's Midtown revitalization program, contingent upon
loc ating in the proposed space. We are seeking $200,000 of equity investment to fully fund
Zara's startup costs.
2.2.1 Location & Operations
Restaurant Location
Midtown Atlanta is the loc ation selec ted for the Zara concept. The outlook for the future of
Atlanta's Midtown district is exceptionally positive and the most progressive development area
in the city. Developers are infusing over $50 billion in Commercial, Residential, and Retail
development. Zara's will benefit from Atlanta's desire to revamp the Midtown district with a
$130,000 renovation grant for restoring and renovating the 100 year old property we plan to
lease.
The market has been c arefully selec ted and tested for the necessary demographics and retail
traffic necessary to meet the goals laid down for profitability. The busy Midtown c ommercial/
residential loc ation has been c hosen based upon a successful demographic model and a traffic
count of more than 33,000 cars daily.
Restaurant Design
Single- Level Design Concept: The total space requirement is 3,000 square feet. The
restaurant will feature a comfortable and open concept design. The central dining area will
alloc ate 76 seats, the lounge 22 seats, and the dining bar with 12 seats. In total, the restaurant
will provide seating for 110 patrons. Where possible, consideration will be given to incorporate
a dining patio. Zoning, parking, and ac cessibility issues will be reviewed as part of this analysis.
Optional Patio: During the busy summer months customers can also sit outside on our patio
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10. Zara Restaurant & Lounge
and we will offer a special summer menu, featuring lighter fare, exotic drinks, as well as non-
alcoholic offerings. The patio setting will be a fun and casual atmosphere for the summer crowd.
Operating Criteria
The restaurant will be loc ated in Midtown Atlanta. The restaurant will service lunch, dinner,
and after-hours dining during the week and weekends. The restaurant will operate during peak
service time to take advantage of street traffic, and after-hour patronage from the
entertainment fac ilities in the area. Service will be available during the following hours:
Lunch: Monday to Saturday, 11 a.m. - 2:30 p.m.
Dinner: Monday to Saturday, 5:30 p.m. - 12 midnight
Sundays - Market brunch takeout only.
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11. Zara Restaurant & Lounge
Table: Start-up
Start-up
Requirements
Start-up Expenses
PROJECT MANAGEMENT $0
Restaurant Consultant (4 months) $15,911
DESIGN $0
Architectural Design $2,195
Structural & Plumbing Design $1,368
Mechanical & Electrical Design $2,155
Graphic Design $1,185
Electrical & Structural Engineering Fees $2,592
Design Consultants (Kitchen, Interior & Dining) $9,119
Engineer & Architect Fees $7,040
CONSTRUCTION $0
Plumbing $33,244
HVAC (Air Return, Air Ducts, etc.) $19,250
Electrical $7,964
Disposal & Demolition $4,122
Structural Construction (4 Months General Labour) $52,099
Facade (Exterior Construction) $3,092
Plaster (Dry Wall) $2,061
Mill & Metal Work $8,244
Interior Finishes (2500 - 3000 sq. ft.) $14,538
Flooring $14,622
Fire Alarm System $3,092
Security & Phone System $4,615
EQUIPMENT $0
Liquor Control System - Lease $0
Stools, Chairs, Tables, Uniforms $38,025
POS (Point of Sale System) - Lease $0
Glassware, Flatware, Smallware (Bar & Lounge) $3,298
Glassware, Flatware, Smallware & Supplies (FOH) $8,298
Dishwasher, Ice & Glasswasher - Lease $0
Kitchen Equipment Freight Fees $2,389
FF&E Taxes (Taxes on Purchase) $7,988
OPERATIONAL $0
Capitalized Legal Fees (LLC, Investor Agreements) $7,080
Software: Restaurant/Inventory $5,500
Software: Cost Control $6,000
Impact, Tap & Permit Fees $3,115
Business License & Temp Certificate of Occ. $1,615
Liquor Licenses $4,615
Utilities, Disposal, Tax & Insurance $9,275
Security Deposits (Phone/Elec/Gas/Water) $6,250
Initial Lease Deposits $6,250
Bank & Loan Closing Costs $6,250
Web Site Construction $5,800
Initial Marketing, Training & PR $19,550
Research & Development $3,050
Start-Up Salary (Mngt & Chefs) $58,050
Recruiting (Staff) $14,550
Inspections $750
Initial Cleaning Services $1,000
Total Start-up Expenses $427,209
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12. Zara Restaurant & Lounge
Start-up Assets
Cash Required $97,099
Start-up Inventory $27,500
Other Current Assets $73,311
Long-term Assets $65,000
Total Assets $262,910
Total Requirements $690,119
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $427,209
Start-up Assets to Fund $262,910
Total Funding Required $690,119
Assets
Non-cash Assets from Start-up $165,811
Cash Requirements from Start-up $97,099
Additional Cash Raised $49,881
Cash Balance on Starting Date $146,980
Total Assets $312,791
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $300,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $300,000
Capital
Planned Investment
Zander Hunte $60,000
Peter Smith $50,000
Investor 1 $40,000
Investor 2 $40,000
Investor 3 $40,000
Investor 4 $40,000
Investor 5 $40,000
Midtown Revitalization Grant $130,000
Additional Investment Requirement $0
Total Planned Investment $440,000
Loss at Start-up (Start-up Expenses) ($427,209)
Total Capital $12,791
Total Capital and Liabilities $312,791
Total Funding $740,000
3.0 Services
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13. Zara Restaurant & Lounge
Zara Restaurant & Lounge will feature international dishes, an eclec tic ambiance, and superior
service. Our food will be of the finest quality and prepared with exotic flare. Customer
satisfac tion is the driving force behind our success. We will change our menu every 4 months,
but maintain the 'favorites' for loyal patrons. Portions will be modestly sized, garnished with
stunning presentation.
Our wine list will be modest and primarily foc used on wines from California, Spain, Portugal, and
Argentina. Approximately 25% will be available exclusively by the glass, and the remaining
labels will be available by the bottle. We will also feature a moderate international beer
selec tion on tap and in bottles. The Zara bar features a comprehensive selec tion of loc al and
international spirits.
The kitchen staff will have the best in c ulinary education and work experience. Their creative
talents will compliment one another. The lounge and restaurant staff will offer the finest
service in an elec tric atmosphere and offer customers an extraordinary dining experience.
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14. Zara Restaurant & Lounge
3.1 Zara Menus
Zara's varied international menu will feature Thai, Chinese, Spanish, and
other regional flavors. The menu flows together to create complementary elements. Normal
dining will have a reduced Tapas, Appetizer and Entrée selec tion, while the Fusion Dim Sum menu
will have special items featured only for after-hours dining. The final menu will be defined by
the Exec utive Chef and paired with the wine menu. We have carefully selec ted a
premium wine, beer, and alcohol listing, from which we will choose a modest rotating selec tion.
Zara's marketing will foc us on our exotic foods, but our hours, target market, and loc ation will
produce significant alcoholic drinks sales. Tapas, in particular, are small dishes meant for
sharing while drinking sangria, wine, or other mixed drinks, and the Tapas menu will play up this
idea with drink suggestions.
The list below offers a small selec tion of our opening menu offerings:
Zara Tapas
· Shrimp Baskets w/ sweet & sour peanut coulis Minced curry beef/c hicken w/ onions in roti
wrap (or spring roll)
· Mixed Seafood Ceviche w/ cousc ous siding
· Bamboo Chicken Satay w/ kaffir lime and Sesame marmalade
Zara Appetizers
· Bread basket served with Olive oil, Blac k Pepper, and Goat Cheese dip
· Blue Crab Fritters with Mango-Tamarind sauce
· Crab Cake medallions w/ Shrimp & Lobster ‘Zara'
Salads
· Mixed Greens with Spanish sherry wine vinaigrette
· Asian Pear and Endive Salad with Blue Cheese & Walnuts
Entrees
· Tequila Sc allops w/ a Spanish sherry reduction
· Thai Red Chili rubbed shrimp
· Voodoo Prince Curry Chicken and Boc k Chow w/sticky rice in Banana Leaf
· Herb Roasted Chicken with ‘Zara' Coo-Chee (House) spices
Desserts
· Choc olate Chunk Bread Pudding w/ Bourbon Cherry sauce
· Zara Choc olate Explosion – Milk, Dark and White chocolate
· Zara Fruit Plate
Specialty Drinks & Coffees ($3.5 - 9.5)
A key source of revenue for the restaurant will be alcohol and bar sales. The restaurant will
feature exotic drinks on a separate menu. Alcoholic drink specials will be featured, as well as a
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15. Zara Restaurant & Lounge
large non-alcoholic selec tion. After-hours bar service will feature selec tions of non-alcoholic
drinks to increase bar sales during lunch and after regulatory hours. Bar pricing is competitive;
prices range from $3.50 to 6.95. Non-alcoholic drinks will be in the higher price brac ket due to
preparation requirements. Prices will range from $4.75 to 9.50.
4.0 Market Analysis Summary
Instead of building a business around a prec onceived concept, we conducted market
research and built a concept around our consumers. Our market analysis identified the following
key drivers as areas of opportunity to service Atlanta's restaurant customers:
1. Portion Selection: Nearly 95% of our surveyed foc us group endorsed having a choice
of different size portions. This statistic is in line with findings reported by
the Tableservice Operator Survey. Zara's Tapas concept is built to offer different-sized
portions. Our customers want the option to choose what satisfies their appetite.
2. Menu Variety: Ethnic restaurants are increasing in Atlanta. The proliferation of
international cookbooks, food magazines, TV cooking shows and imported goods offers
ample evidence that America, as a whole, is currently on an international tasting spree.
In fac t, eating plac es that identify themselves as ethnic establishments numbered
nearly 78,000 in 1999 and rec orded sales of $30.5 billion. Our research results do
not identify any single ethnic style of restaurant as desired, but rather suggest that
incorporating strong multi-ethnic influences in the menu selec tion will be popular. Again,
variety is the underlying element for this concept.
3. The Dining Experience: Customer satisfac tion with food and service has been and
continues to be of utmost importance, but our findings indicate that the déc or, lighting,
bar, and other options to improve the dining experience are also fac tors in
customer dec isions. Zara takes all these fac tors in c onsideration for the design of this
cosmopolitan restaurant.
4. Reasonable Prices: This was no surprise given the ec onomic tide. Although the
restaurant industry as a whole has seen growth in 2002/2003, customers are
demanding value for their dining dollar. Zara's menu is priced at a mid-tier level, with no
entrée over $20. In addition we have an extended Tapas and Appetizer selec tion priced
between $3.50 - $9.50, allowing budget dining in a full-service restaurant.
4.1 Market Segmentation
Zara's Restaurant & Lounge intends to cater to a wide customer base. We want everyone to feel
welcome and entertained. We have defined the following groups as targeted segments that
contribute to our growth projec tions:
· The Business Person
· Downtown Atlanta Couples
· The Destination Customer
· High-End Singles
· Tourists
These particular market segments are 25-45 years old, have disposable income, and are
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16. Zara Restaurant & Lounge
seeking upsc ale, trendy, and comfortable restaurant options. These are the types of people who
frequent other restaurants and bars in the area. They are likely to spend more on experiences
they perceive as unique, cosmopolitan, and sophisticated. They are also the most open to trying
something new, foodwise, and will embrac e our international fusion cuisine.
Table: Market Analysis
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Business Person 18% 9,925 10,223 11,348 11,688 12,039 4.95%
Downtown Atlanta Couples 32% 17,645 18,527 20,565 21,593 22,673 6.47%
Tourists 13% 7,168 7,311 7,896 8,054 8,215 3.47%
The Destination Customer 8% 4,411 4,499 4,724 4,818 4,914 2.74%
High-end Singles 29% 15,991 16,950 18,815 19,944 21,141 7.23%
Total 5.76% 55,140 57,510 63,348 66,097 68,982 5.76%
4.2 Target Market Segment Strategy
The Business Person: They work hard all day and often stay overnight in a strange city.
They need a competent establishment that helps impress clients and prospec ts. Afterward,
they want to relax and use the money they are making (or is expensed by their company).
They spend the most on drinks, food and tips. Zara's cosmopolitan flair and comfortable
atmosphere will be perfect for sophisticated business people, whether they live in and around
Atlanta or are here for work.
Downtown Atlanta Couples: The restaurant will have an intimate, romantic, enticing adult
atmosphere that suggests "date." Zara's will be the best date loc ation in town. These young
Midtown c ouples are generally very successful working professionals. In most cases they are
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17. Zara Restaurant & Lounge
budgeting to eat out on a regular basis, as they don't have the time to prepare food nightly.
The Destination Customer: Atlanta is a very 'sectioned' city, and consumers often look only
in their own neighborhoods for restaurant options. Zara will break these habits, using marketing
to draw customers from outside the main c ity limits. Zara will be a destination restaurant. Our
Destination Clients tend to be new suburbanites that miss the excitement of the inner city. They
have disposable income, and will spend quite a bit on such outings. Zara's will be espec ially
appealing to married suburban couples indulging themselves with a "date night" downtown,
away from the kids. Many of these consumers are new to Atlanta from larger cities, ac customed
to dining within the city and at non-franchised restaurants.
High-end Singles: We will attrac t them with our eclec tic atmosphere and layout. Our
international menu, striking dec or, entertainment and events, excellent service and engaging
clientele will confirm the feeling of being in "the in plac e" in Atlanta. These are the individuals
that pride themselves on socializing and dining at the premier loc ations - The Image Seekers.
Tourists: Atlanta attrac ts many vac ationers during the summer months of May through
September. Zara's will be a destination dining loc ale, with its attrac tive atmosphere, international
menu, and lounge. A large percentage of the tourist population are vac ationing singles, here to
socialize and be entertained. This is especially true for the tourist population that visit for
sporting and social events - they are not interested in family establishments.
4.3 Service Business Analysis
The restaurant industry is highly competitive and risky. The owners know this through their many
years of experience opening, running, and improving restaurants ac ross North America. Most new
restaurants opened by inexperienced owners struggle or fail. However, those based on solid
understandings of the market needs, and management of inventory and staff have a much higher
chance of success, espec ially when c ombined with prior experience in the restaurant industry.
Restaurants make money by taking inexpensive ingredients, combining them in c reative ways,
cooking them properly, and selling them at a much higher price. Any ingredients wasted in the
kitchen are money thrown out. Any time wasted in seating customers, taking orders or
preparing food is money walking away. While some entrepreneurs think that success is as
simple as a good loc ation and a trendy concept, we know the truth:
To succeed in the restaurant industry, you need an understanding of the risks and
financial conditions, the ability to handle enormous pressure, and the organizational
skills to bring off what is essentially a giant catered party, two to three times a day.
4.3.1 Competition and Buying Patterns
In 2003, the top ten Atlanta restaurants shared two things: cozy, hip interiors and reasonably
priced, regionally specialized menus. Only one of them offered traditional "southern" cooking. And
half of them were loc ated in Midtown. Our competitors are heading in the right direc tion, but
only Zara is based on sound market research in the loc al market.
Atlanta consumers are seeking variety and new experiences. Location is clearly important, but so
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is atmosphere and distinctiveness. Our marketing challenge is thus to stand out from our
competitors, not only as the "new" restaurant, but as one that offers consistently high quality
food, menu variety, and a unique atmosphere. Maintaining our edge will depend partly on
marketing ourselves as an adult-only destination, and not a family restaurant.
5.0 Strategy and Implementation Summary
Our strategy is simple. We intend to succeed by giving people a combination of excellent and
interesting food in an environment that appeals to a wide and varied group of successful adults.
We will foc us on establishing a strong identity in our community with a grand opening. Our main
foc us in marketing thereafter will be to increase customer awareness in the surrounding
communities. We will direc t all of our tac tics and programs toward the goal of explaining who
we are and what we do. We will keep our standards high and exec ute the concept flawlessly,
so that word-of-mouth will be our main marketing force.
We will create an appealing and entertaining environment with unbeatable quality at an
exceptional price. As an exciting and ec lec tic restaurant, we will be the talk of the town.
Therefore, the exec ution of our concept is the most critical element of our plan.
All menu items are moderately priced for the area. While we are not striving to be the lowest-
priced restaurant, we are aiming to offer exceptional food at reasonable prices for the average
restaurant diner.
5.1 Competitive Edge
Zara's competitive edges are:
1. The owners' thorough understandings of opening and running a restaurant
2. An extraordinary contemporary restaurant design
3. International menu with featured menu c hanges every 4 months
4. Unique, 3-Tiered spatial layout
5. Chef Co-op program to allow new entrants, trainee and featured chef
6. Chef/Management Stoc k Incentive Program.
7. Inner and Outer City Marketing campaign (i.e. "Come to Town" promotions)
8. Employee Training, Incentive and Retention program
5.1.1 Competitor Analysis
Below are excerpts from our competitive analysis study.
1. The Kitchen (Direct Competitor):
We were able to draw some conclusions from this analysis that helped defined the
concept and positioning for Zara: 1) Keep the menu pricing modest but offer superior food
quality and presentation. We plan to keep the menu prices under $20; 2) Midtown is a
prime restaurant loc ation. One Midtown Kitchen is in an obsc ure loc ation but has
thrived as one of the more successful restaurants in the area; and 3) The customer
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base in this segment of Atlanta is ready for after-hours dining, and is willing to travel to
establishments that ac commodate their needs.
2. Lunaci (Direct Competitor):
This restaurant is a main c ompetitor for Zara, a casual dining restaurant that has evolved
to be a great success story for the Midtown district. This restaurant served to validate
1) the tapas concept appeal for Midtown c ustomers; 2) the evolving need for after-hours
dining; 3) tapas as a good food concept for after-hours dining (smaller portions, smaller
price); 4) the appeal of live Entertainment.
3. Cumulus (Indirect Competitor)
This restaurant has grown in popularity over the years, and has gained popularity as a
destination restaurant that can cater to business professionals as well as the loc al
residents. The menu is somewhat formal for this market segment, but the bar attrac ts a
good crowd. During this study it was evident that some patrons came exclusively to sit at
the bar, without any intent of dining in the restaurant.
Cumulus is more of a formal dining restaurant and meets a certain need within the
community, but I don't see it as a direc t competitor of Zara. I do feel that it has some
very special elements that have helped it succeed over the past 3 years, which Zara can
benefit from.
4. Cheesecake Factory (#1 Restaurant Comparison):
Although Cheesecake Fac tory is outside of Zara's restaurant district and not considered a
direc t competitor, it was beneficial to analyze the most profitable restaurant in Atlanta to
understand what contributes to their success. Cheesecake Fac tor offers several key
elements that would also benefit Zara: 1) Customer Satisfac tion through moderate pricing
and high-quality food; 2) Location selec tion to benefit from core customer
demographics, situated in a busy/popular area for both business and residential traffic; 3)
Exceptional Service, from the Valet, to Hosting, to Wait, Bus, and Bar staff; and 4)
Menu Variety, offering a broad array of menu items.
5. Swing Restaurant (Indirect Competitor):
This restaurant is not in our market district and therefore not a direc t competitor,
although we do consider it an ‘indirec t' competitor. Swing incorporates some of the
charac teristics that we have mapped out for Zara. Those elements are: 1) A Tapas and
Entrée menu – realizing that customers want varied meal size and variety; 2) A club
type atmosphere to entice the single sc ene and to drive bar sales.
Swing validates some of the elements uncovered in our market research as to what the
new Atlanta diners are looking for. This serves as a true validation that the timing is
right for the Zara Restaurant & Lounge concept.
Failed Restaurant Analysis: Mumbo Jumbo
Mumbo Jumbo was an Atlanta restaurant attrac tion in the downtown c ore, a strong c ompetitor
that was severely impac ted by the patronage demise after 9/11. I also completed an analysis
of this restaurant bac k in 1999 and compared it to this current analysis in 2003. Several fac tors
led to closing of this restaurant:
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Location:
This was a very cosmopolitan restaurant loc ated in a core business community. The
restaurant was hidden in c ross streets and away from the general street traffic. This was a
destination restaurant and a secondary selec tion for the general customer base in this area.
Lesson Learned: As part of this analysis, we have determined that the downtown c ore
is not a good fit for the Zara concept. We will limit our site selec tion to the core Midtown
district and the upper Downtown district. Midtown is Atlanta's major growth district and is
developing the residential infrastructure in pace with the business infrastructure.
Customer Segment:
Atlanta's downtown c ore is not ready for this type of restaurant. Atlanta's downtown c ore is a
business district, and residential development for this area is at the Genesis state. The primary
customer base is the business person and tourist. The largest percentage of this customer
segment will be looking for a restaurant in which to conduct business or a family
establishment; Mumbo Jumbo would not be a primary selec tion in either case.
Lesson Learned: Zara's target market demographics are perfec tly in alignment with
the Midtown profile. Midtown has a business core as well as a residential core. We will
look to the business core for our primary daytime business, but to our residential core
for our dinner and after-hours patronage. In addition, the business core will look to Zara
as a plac e of socialization for dinner and after-hours unwinding. Mumbo Jumbo
depended on the business segment for their lunch and dinner profits, and
customers who would travel from outside the downtown district to eat at the
restaurant – there was no static dinner segment.
Visibility:
Hand-in-hand with loc ation, this restaurant also suffered from poor visibility. In the downtown
core a large percentage of business is from walk-in traffic. The business and tourist customers
tend to selec t a restaurant from touring the area and ac cessibility. Mumbo Jumbo was situated
on a cross street behind the main street.
Lesson Learned: Although being situated on a main street is not as key in the
Midtown district, we will ensure that visibility is part of our site selec tion criteria. In
addition, we will use signage and exterior déc or as means to attrac t customers and get
noticed.
In all, this restaurant was a staple in Atlanta's downtown c ore for over 10 years, but key
restaurant disc iplines (Location, Customer Segment, Visibility) came bac k to hurt them as the
ec onomic climate changed.
Market Analysis Conclusion:
At the end of the day, everyone that sells prepared meals in this district is a Zara
competitor, bec ause we all compete for the same home meal replac ement dollar. However,
there are two segments of the restaurant industry that are our main c ompetition: the casual
dining restaurant and the fine dining value restaurant.
So, if the food and service is better at a fine dining restaurant than a casual restaurant, but
price has bec ome a fac tor as a result of the economic turns, where is a customer more likely
to go?
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There is no absolute answer to the question, but the solution is to deliver the best food at the
best price with the highest level of service in one establishment. This is the very definition of
value and the concept at the heart of Zara's business model.
5.2 Marketing Strategy
Zara Restaurant & Lounge's Marketing strategy will be to promote our elec tric food, superior
service, and exciting concepts to draw in the loc al repeat customers. Marketing initiatives will
concentrate on the following:
Building and Signage:
The most important Marketing tool that we have is the exterior of our building, and our new sign.
We budgeted a great deal into the renovations and dec or to generate the aesthetic appeal of
Zara. See attac hed Logo and Web design.
Customer Service:
In our years within the restaurant industry, customer service has always been the major draw
for the dining clientele. Food and atmosphere is far out-shadowed by superior customer service
that turns a new customer into a repeat customer.
Management will demand the wait-staff provide the very best in quality services to the
customer, making certain that they are content and satisfied with their dining experience. Wait-
staff are thoroughly trained, and every 90 days they undergo a performance appraisal. This is
part of our Employee Manual, and Operations Manual guide.
Advertising and Promotion:
Our Advertising Plan and media sc hedule call for targeting customers direc tly through loc al
publications aimed at , respec tively, singles, couples, and destination customers.
Management rec ognizes the key to success at this time of initial opening is extensive media
promotion. This must be done aggressively in order to ac complish our service goals. A healthy
budget is alloc ated for the first year. A primary part of the budget is alloc ated to create the
media and customer buzz for the month prior to opening and the next three months after the
grand opening. The full Marketing program is as follows:.
Media Objec tives and Strategy:
Establish our image as a unique Midtown restaurant with great service, value, and great food
served in an eclec tic atmosphere. We will maximize efficiency in the selec tion and sc heduling
of advertisements by:
· Selec ting primary business publications with high specific market penetration, using The
Creative Loafing Dining Section, The Atlanta Journal Constitution, Atlanta City Search,
and Soc ial Diva, which all reach our targeted demographics.
· Sc heduling adequate frequency of ads to impact market with menu items and promotions.
· Where possible, positioning advertisements in or near entertainment/food related editorial.
· Redirec ting customers to our website to register for upcoming functions, VIP lists,
reservations, and flash media promotions.
· Maximizing ad life with monthly and weekly publications.
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Working with The Reynolds Group Media Co. (Zara Advisory Board), we will develop an
advertising campaign built around our Zara Diner theme, menu offering, loc ation, and dec or.
We will support this plan with ads that reinforce the Zara dining concept.
Additionally, we will develop a consistent reach and frequency throughout the year, targeting
each spec ific customer segment within a five- mile radius, and new 'suburbanites,' who still
apprec iate in-town dining.
Promotional Campaign:
The best way to reach our potential customers is to develop an intense advertising campaign
promoting our Zara concept of "Spice of Life." In addition to standard advertising prac tices,
we will gain c onsiderable rec ognition through newspapers, newsletters and public
announcements. Consumers will be encouraged to visit our website to be greeted with a flash
media intro that highlights the restaurant, past happenings, upcoming attrac tions and our
dynamic menu.
Our periodic customer surveys and weekly menu item sales evaluations will help us to understand
what advertising is working and what is not; basically, who we are reaching. Our goal is to
understand our customer, measure the success of our direc t marketing and media ac tivities,
and redirec t advertising as effectively as possible.
Publicity Strategy:
Working with The Reynolds Group, Zara will foc us on the following publicity strategies:
· Develop a sustained public relations effort, with ongoing contac t between key editors and
top-level personnel at loc al dining publications.
· Develop a regular and consistent pac kage update program for the major target media,
keeping key editors abreast of all new promotions, and menu introductions.
· Establish contac t with editorial staff for the purpose of being included in entertainment
"round-ups"--product comparisons in dining publications and the loc al papers.
· Produce a complete Zara Restaurant history and menu offering piec e to be used as the
primary public relations tool for all target media editorial contac t. This will also be
effective for inclusion in press kits.
Press Release/Grand Opening: Zara Restaurant will release a series of press releases on the
Grand opening.
Editorial Visitation: Leading up to the Grand Opening, and over the first 6 months of
operations, we will invite the most influential reporters and editors from all loc al publications to
Zara Restaurant in order to evaluate our menu, service, and atmosphere.
Publicity Revenues: We anticipate at least 10% of our annual sales will be generated direc tly
from our publicity. A full media kit will be sent to all loc al publications, and releases on new menu
items will be made monthly.
Community: Zara will look for key opportunities to pair with loc al community development
organizations and radio stations to interfac e with our customers. We will continually look for loc al
community programs in which we can participate, in order to better our community, and give
something bac k.
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5.2.1 Marketing Program
In line with our Marketing strategy, we will employ three different marketing tac tics to increase
customer awareness of Zara: In-Restaurant Marketing, Public Relations Marketing, and Media
Marketing. Our most important tac tic will be word-of-mouth/in-restaurant marketing. This will
be by far the cheapest and most effective of our marketing programs.
Word-of-mouth/In-Restaurant Marketing
· Restaurant Night: Every first Monday of the quarter, we will have a special evening
for restaurant people. A perfect night for the loc al area's restaurant owners, chefs and
staff to get together to disc uss the market and food trends, and possible Co-op efforts
to promote the Midtown district. This is not a conflict of interest, it is an effort to
increase visibility and patronage ac ross the Midtown district. We will also invite the
Midtown Alliance committee for their participation.
· Monthly Dating Connection: With the increasing appeal of Internet and speed dating,
the restaurant will offer a monthly dating night. In addition to food and beverages,
customers can choose from an array of dating pac kages up for auction.
· Wait Area Marketing: Wait staff will service appetizers to customers waiting to be
seated or on the wait list.
· Live Entertainment parties
· Spec ial Events
· Valentine's Day
· Zara Halloween Masquerade party
· Wine tasting weekend
· New Year's Eve party
Public Relations Marketing
· Georgia Hospitality & Tourism V.I.P. Party: We will host a V.I.P. Dinner before the
'Grand Opening.' This will serve the dual purpose of training our staff and introducing
ourselves to the community. The list of individuals we will invite comes from the
Chamber of Commerce, Georgia Hospitality & Tourism, and Midtown Development group.
We want their full committment to the restaurant to draw the tourist dollars.
· Critics' Choice: Prior to the Grand Opening there will be two preliminary parties catering
to the Media and Critics community. We will encourage the media and restaurant critics
to meet at the restaurant and review the dec or, service and food. This will be a
preliminary review, where we will consider constructive input to make minor revisions prior
to the true Grand Opening. This initial review and input will give critics and media
commentors a stake in Zara's success, through their contributions to the final design.
· Brochures: Make a broc hure for the in-town hotels and business establishments to
provide to their guests and staff, containing interior pictures of our restaurant, menus
and prices.
· Government Relations: There are several Government offices in the Midtown/Downtown
area. We will approach them to cater business luncheons and private functions. This
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will offer us higher visibility for future functions and community events. Word-of-mouth
referral is very powerful and particularly amongst the business community.
· Private Functions: Target marketing to businesses for regular business lunch and
dinner entertaining, and private functions.
Media Marketing
· Newspaper campaign: A very targeted media campaign to obtain featured articles
about the restaurant in their Living, Entertainment and Dining segments. Notices of all live
entertainment segments and special features will be posted to loc al newspapers' calendar
announcements.
· Restaurant and Special Events Website: We have contrac ted with loc al design
teams to deliver a high-quality, navigable, constantly updated website.
· Media Relations: Several media relations teams will be utilized to market the Restaurant.
Soc ial Diva and Green Frog are two media companies we will utilize for media relations.
Both c ompanies have an insightful presence and connec tion with our target market.
· Billboard Advertisement: One month prior to the opening, distinct billboard ads will
advertise the launch of the Restaurant.
· Inner & Outer City Marketing: We will budget to attrac t customers from the suburbs.
5.3 Sales Strategy
Our strategy is simple: we intend to succeed by giving our customers a combination
of delicious and interesting food in an appealing environment, with excellent customer service,
whether on their first visit or their hundredth.
Our marketing strategies are designed to get critics and initial customers into our doors. Our
sales strategies must take the next step and encourage customers to bec ome repeat customers,
and to tell all their friends and ac quaintances about the great experiences they just had at Zara.
New restaurants often make one of two mistakes: they are unprepared or underprepared for
opening, and initial poor service, speed, or quality disc ourages customers from returning, or
they spend all of their efforts at opening, and are unable to maintain the initial quality customers
expec t on return visits, dec reasing word of mouth advertising and leading to poor revenues.
Zara's sales strategy requires consistently high quality food, service, speed, and atmosphere.
We can ac complish this by:
· Hiring employees who genuinely enjoy their jobs and apprec iate Zara's unique offerings
· Continually assessing the quality of all aspec ts mentioned above, and immediately
addressing any problems
· Interac ting with our customers personally, so they know that their feedback goes direc tly
to the owners
· Evaluating food choices for popularity, and keeping favorites on the menu as we rotate
seasonal foods and specials
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5.3.1 Sales Forecast
The following sales graph is based on first year start-up estimates only. We anticipate that the
business will not be at full operating capacity until the sixth month of operations. This is due to
the competitive nature of the market and existing customer loyalty. All fac tors governing our
sales progress are outlined below in the Important Assumptions section.
Our sales forec asts for years 3 through 5 are very conservative, compared to industry
standard growth rates. (See Ratios table for comparisons.)
Although we hope to do catering for loc al businesses and government offices with time, we will
insist on payment at delivery - we will not sell on credit.
Table: Sales Forecast
Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Sales
Total Sales Food $853,595 $959,047 $1,006,999 $1,047,279 $1,089,170
Total Sales Bar/Beverages $220,174 $252,041 $272,204 $293,981 $317,499
Other $0 $0 $0 $0 $0
Total Sales $1,073,769 $1,211,088 $1,279,204 $1,341,260 $1,406,670
Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5
Total Cost of Sales: Food $298,758 $322,240 $329,289 $336,048 $342,762
Total Cost of Sales: Bar/Beverages $72,657 $76,167 $77,687 $79,228 $80,835
Other $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $371,416 $398,407 $406,976 $415,276 $423,597
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26. Zara Restaurant & Lounge
5.4 Milestones
The following Milestones table lists important business milestones, with dates and managers in
charge of each deliverable. The milestone sc hedule indicates our emphasis on planning and
managing the details.
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Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Engage Restaurant Consulting 7/31/2004 7/31/2004 $0 Alex/Peter Owners
Firm
Site Selection 9/8/2004 9/29/2004 $0 Alex/R.Shafer Consultant
Final Restaurant Location 9/30/2004 10/1/2004 $0 Alex/Peter Owners
Approved
Investor Finance Phase 8/22/2004 10/22/2004 $0 Alex Owners
Investor Capital Secured 10/27/2004 10/27/2004 $0 Alex Owners
Investor Partnership LLC 10/28/2004 10/31/2004 $0 S. Hollier Legal
Formed
Interview for Construction Team 10/28/2004 11/3/2004 $0 Alex Owners
Recruit Chef (Equity Partner) 10/28/2004 11/14/2004 $0 Alex/Peter Owners
Receive Final Contractor Bids 11/4/2004 11/17/2004 $0 Peter Owner
Construction Budget Approved 11/19/2004 11/19/2004 $0 Alex/Peter Owners
Secured SBA Loan 11/1/2004 11/21/2004 $0 Alex/Peter Owners
Hire Restaurant Architect 11/20/2004 11/21/2004 $0 Alex/Peter Owners
Hire Interior Design Firm 11/20/2004 11/21/2004 $0 Alex/Peter Owners
Hire Kitchen Engineer 11/20/2004 11/21/2004 $0 Alex/Peter Owners
Hire General Contractor 11/20/2004 11/21/2004 $0 Alex/Peter Owners
Finalize Chef Partnership 11/15/2004 11/21/2004 $0 S. Hollier Legal
Construction Project Kickoff 11/24/2004 11/24/2004 $0 Contractor A Gen. Contractor
Finalize Lease Holder Budget 11/24/2004 11/27/2004 $0 Alex/Peter Owners
Finalize Lease 11/28/2004 11/28/2004 $0 R. Shafer Consultants
Restaurant Design Complete 11/25/2004 12/12/2004 $0 Contractor X Design Contract
Interior Design Complete 11/25/2004 12/12/2004 $0 Contractor Y Design Contract
Kitchen Design Complete 11/25/2004 12/12/2004 $0 Contractor Z Design Contract
Restaurant Opening Date 12/15/2004 12/15/2004 $0 Alex/Peter Owners
Approved
Finalize Menu & Wine Selection 11/21/2004 12/15/2004 $0 Chef/Peter Kitchen/Owner
Media Plan Review 12/15/2004 12/19/2004 $0 Alex/M.Zimm PR Marketing
Apply for Liquor License 12/15/2004 12/19/2004 $0 Alex/S.Hollier Owner/Legal
Apply for Construction Permit 12/15/2004 12/19/2004 $0 Contractor A Gen. Contractor
Submit Kitchen Plan for 12/15/2004 12/19/2004 $0 Contractor Z Design Contract
Approval
Board of Health Approval for 12/29/2004 1/31/2005 $0 Board City
Kitchen
Liquor License Approved 12/29/2004 1/31/2005 $0 Board City
Architect Review Board Approval 12/29/2004 1/31/2005 $0 Contractor X Design Contract
Corporate Brochure 2/2/2005 2/13/2005 $0 M.Zimmerman PR Marketing
Review Business & Marketing 3/1/2005 3/5/2005 $0 Alex/Peter Owners
Plan
Launch Zara Website 3/15/2005 3/15/2005 $0 Alex Media Marketing
Order Kitchen Equipment 2/1/2005 3/20/2005 $0 Alex/Peter Owners
Order Restaurant/Lounge 2/2/2005 3/20/2005 $0 Alex/Peter Owners
Furniture
Order Office Furniture & 2/2/2005 3/20/2005 $0 Alex/Peter Owners
Supplies
Business & Marketing Plan 4/26/2005 4/30/2005 $0 Alex/Peter Owners
Review
PR/Media Advertising (Phase 1) 5/1/2005 5/15/2005 $0 M.Zimmerman PR Marketing
Production and Completion of 5/5/2005 5/17/2005 $0 Chef/Peter Kitchen/Owner
Menus
Construction of Restaurant 2/2/2005 5/20/2005 $0 Contractor A Gen. Contractor
Pre-Opening of Zara Restaurant 5/24/2005 5/24/2005 $0 Alex/Peter Owners
Employee Training (Phase 1) 5/18/2005 5/24/2005 $0 Chef/Peter Kitchen/Owner
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28. Zara Restaurant & Lounge
Wine Class for Employees 5/18/2005 5/24/2005 $0 Peter Wine Distributor
(Phase 1)
Critics' Choice VIP Party 5/25/2005 5/26/2005 $0 M.Zimmerman PR Marketing
Final Construction Punch Out 5/21/2005 5/28/2005 $0 Contractor A Gen. Contractor
Restaurant Revisions 5/27/2005 6/2/2005 $0 Alex/Peter Owners
Employee Training (Phase 2) 5/27/2005 6/2/2005 $0 Chef/Peter Kitchen/Owner
Wine Class for Employees 5/27/2005 6/2/2005 $0 Peter Wine Distributor
(Phase 2)
Grand Opening of Fusion 6/3/2005 6/3/2005 $0 Alex/Peter Owners
Restaurant
VIP Party 1 6/3/2005 6/3/2005 $0 M.Zimmerman PR Marketing
VIP Party 2 6/4/2005 6/4/2005 $0 M.Zimmerman PR Marketing
Web Site & E-Mail Media 5/1/2005 6/5/2005 $0 Alex Media Marketing
Launch
General Public Opening 6/5/2005 6/5/2005 $0 Alex/Peter Owners
Launch 30-Day Grand Opening 5/1/2005 6/5/2005 $0 M.Zimmerman PR Marketing
PR/Media Advertising (Phase 2) 6/1/2005 6/14/2005 $0 Alex PR Marketing
Business & Marketing Plan 7/5/2005 7/9/2005 $0 Alex/Peter Owners
Review
Business & Marketing Plan 8/2/2005 8/6/2005 $0 Alex/Peter Owners
Review
Update Brochure 8/2/2005 8/13/2005 $0 Alex Media Marketing
Direct Mail 8/16/2005 8/16/2005 $0 Alex Media Marketing
Advertising (Phase 3) 9/1/2005 9/15/2005 $0 M.Zimmerman PR Marketing
Zara Masquerade Party 10/31/2005 10/31/2005 $0 M.Zimmerman PR Marketing
Direct Mail 11/1/2005 11/1/2005 $0 Alex Media Marketing
New Corporate Accounts (5) 9/1/2005 11/1/2005 $0 Zander/Peter Owners
Advertising (Phase 4) 11/15/2005 11/19/2005 $0 M.Zimmerman PR Marketing
Advertising (Phase 5) 12/15/2005 12/30/2005 $0 M.Zimmerman PR Marketing
Zara New Year's Party 12/20/2005 1/1/2006 $0 M.Zimmerman PR Marketing
Totals $0
6.0 Web Plan Summary
Zara Restaurant & Lounge will have a dedicated website. It will be the virtual business card
and portfolio for the company, simple, contemporary and well designed. Our site will offer our
menus, prices, reviews and happenings at Zara. We will also have a monthly Paparazzi Review
about what did happen at Zara to get new customers interested in our restaurant.
Our website will be used to try out new offers, starting with an on-line order feature for the
Sunday Market Brunch, and expanding if the concept gains favor with our customers. A customer
will be able to order a selec tion for pickup using a credit card. Selec tions will be based on our
pre- pac kaged meals available during the Sunday Market Brunch. This is also a potential for
customers needing catering.
The website will include email capabilities and online reservations and special events sc heduling.
7.0 Management Summary
The strength of our management staff positions us for success. We have assembled a team that
embrac es different disc iplines, ac complished professionals with expertise in all areas of the
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business, including marketing and restaurant management.
The owners, Zander Hunte (Managing Partner) and Peter Smith (Exec utive Chef),
have considerable experience in the restaurant industry.
In Year 2, we will hire a General Manager to handle the day-to-day Restaurant management.
This will assist Zara's Restaurant & Lounge to grow even further.
You can't build investor confidence based on what you will do, but you can inspire confidence
based on what you have done. Attac hed is the portfolio of past success. This Zara Management
team has deep roots in the restaurant segment, and have the prac tical experience to make
this venture another great success.
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7.1 Management Team
Zara Restaurant & Lounge, with more than 48 years of experience between the key officers,
understands the importance of a strong management team. The strength of our management
staff positions us for success.
Day to day operational management will be conducted by Alex Hunte and Peter Smith, as
hands on managers. They will advised and supported by their Advisory Board.
Zara's Advisory Board
· Stephen Hollier of Hollier Collier & Loewenthal: Corporate Attorney
· John Katz of SS&G Financial Services: CPA
· Robert Shaefer of Shafer Hospitality Services: Restaurant Consultant
· Mary Zimmerman of The Zimmerman Group: Media & Public Relations consultant
Ownership & Management
Together, Alex Hunte and Peter Smith bring over 20 years of experience in the restaurant
industry to their new joint venture.
Alex Hunte: Managing Partner
(Operations, Marketing, Financial and Business Development)
Mr. Hunte brings to Zara an ac complished restaurant bac kground, exceptional business
ac umen, and a lifetime passion for the restaurant experience. Alex has over 17 years of business
management in the Information Technology industry. Like IT, successful ventures in the
restaurant industry must balance capitalizing on new trends with c ontinual quality assessment.
Alex's understanding of day-to-day cash flow planning and staff management will be critical to
Zara's financial success.
Mr. Hunte has a bac kground in International Business Management and Business Start-ups, and
is certified in Restaurant and Hotel Management. As co-owner, Alex Hunte is responsible for
overall direc tion and operational management. Mr. Hunte is a strong business leader responsible
for strategic planning and continued growth of restaurant services and business development. In
addition, Alex will be the management lead for all public relations, financial and investor services.
Degrees, Certifications, and Professional Affiliations:
· MBA in International Business Management
· B.S. in Computer Sc ience
· Certified in Restaurant & Hotel Management from Ryerson University
· PMP (Projec t Management Professional) certification
· Member of the Midtown Alliance
· Business partner member of the National Restaurant Association.
Peter Smith: Managing Partner
(Exec utive Chef and Restaurant Operations)
Mr. Smith is an ac complished restaurateur, having owned several full-service restaurants. Mr.
Smith is responsible for the concept and the daily operations management, with yearly sales
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targets of $7 million.
In addition, Peter is the owner of Bauhaus Bar and Nightclub, and former owner of Myth
Restaurant, Ouzeri, and Kapilyo Restaurant, all financial and critical successes. Mr. Smith is
also an international restaurant consultant for top international organizations. Mr. Smith's
Contrac ting responsibilities for Zara included logistics, Site and Lease Negotiations, Concept
Definition, Start-Up and Financial forec ast, Menu and Operations Management, as well as
Implementation and Launch Management.
With a degree in Economics and an ac complished career, Mr. Smith c ontributes the experience of
his past successes, and is charged with leading the Restaurant Operations, Staff Selec tion,
Menu Definition and Training initiatives for Zara Restaurant & Lounge.
Managing Partner Responsibilities
In addition to the management of day to day operations, both managers, as principals within the
company, will oversee menu development, purchasing, portioning, pricing and inventory control,
including approval of all financial obligations of the company. They will plan, develop, and
establish customer service policies and objec tives, and write, explain, and enforce an employee's
manual for all employee-related policies.
Responsibilities for hiring and firing employees lie solely with the two operations managers, and
any dec isions in these areas will be made jointly.
They will:
· Manage working capital, including rec eivables, inventory, cash and marketable securities.
· Perform financial forec asting, including capital budgeting, cash flow analysis, pro forma
financial statements, and external financing requirements.
· Prepare financial analyses of operations for guiding management, including reports
which outline the company's income, expenses, and earnings.
· Direc t preparation of budgets and financial forec asts and arrange for audits of
company's ac counts.
7.2 Personnel Plan
We believe the personnel plan is in good proportion to the size of the restaurant and projec ted
revenues. The staff will include 13 full-time employees and 8 part-time employees, who will
work a total of 754 manhours per week and generate an average monthly gross payroll of
$27,308 for the first year in business. The estimated gross annual payroll of $399,588
(including Partner Salaries) is 37% of total sales.
Wage salaries for service personnel (waitstaff, busboys, bartenders) do not include anticipated
tips. With average tipping rates for the Atlanta, Georgia area, and our menu prices, service
employees should average at least twice the minimum wage in any given shift. Skilled
waitresses and bartenders on weekends and evenings will make substantially more.
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32. Zara Restaurant & Lounge
Kitchen:
The Exec utive Chef will be assisted by:
· An Assistant Chef from a national search (1).
· A Sou chef with c onsiderable experience in different restaurants (1).
· Cooks that work direc tly with Peter or the sous chef (2).
· Prep cooks/dishwasher (2).
· People cleaning the restaurant (2).
Restaurant Operations:
Alex Hunte will manage the Financial Management, Bookkeeping, PR/Media Advertising, and
Investor Services. Alex Hunte will also manage the daily Restaurant Operations.
Peter Smith will be the Restaurant Manager. He will be the primary responsible for daily
Restaurant Operations, taking care of Wait and Bar Staff. Peter will also take lead as the
Exec utive Chef working with the Head Chef.
· To help Peter, he will have servers that will work as ‘captains' (these people have
experience in managing, waiting tables and bartending) and take care of service and
make sure the restaurant is in excellent shape (2).
· Servers that work part time (4).
· Full-time bartender (1).
· Part-time bartender (1).
· Full-time busboy (2).
· Part-time busboy (1).
Administrative Salaries (Partners):
· Zander Hunte: $ 48,000 per year
· Peter Smith $ 32,160 per year
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34. Zara Restaurant & Lounge
8.0 Financial Plan
Zara Restaurant & Lounge financial model is based on a business concept to "Plan for the
Worst, but Manage for the Best." We have approached the financial plan as follows:
The First Year projec tions anticipates a below average sales volume, below average seat turn,
and above average food/beverage cost. This position will help us ensure sufficient financial
planning to ac commodate a reasonable ramp-up period, and business success, also ensuring that
we do not enter this venture under-capitalized.
Financial Pro Forma
In addition to the $110,000 of owner investment and $130,000 in grant monies, Zara is seeking
$300,000 in long-term loans and $200,000 in investment for renovations, furniture, kitchen
equipment, liquor license, food & restaurant supplies, legal fees, working capital, marketing and
personnel.
The Financial Plan includes:
· Important Assumptions
· Risk Analysis & Mitigation Plan
· Sales Forec ast (5.3.1, above)
· Break Even Analysis
· Profit and Loss Statement
· Cash Flow Statement
· Balance Sheet
8.1 Investment Opportunities
The Zara Investment Program alloc ates equity position of 20% for a total of $200,000 in investor
capital. The Investment structure is as follows:
Investment Opportunity
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35. Zara Restaurant & Lounge
Total Investor Funding $200,000
Opportunity:
Minimum Investment Amount $15,000
Investment Term (Investor 3-5 Years
Selec tion)
Total Equity Offering (1% per 20% Max
$15,000 Investment)
Starting Year 2
Silver: Projec ted Annual IRR on 10%
Investment of $15,000 - $49,000
Gold: Projec ted Annual IRR on 11%
Investment of $50,000 - $99,000
Platinum: Projec ted Annual IRR on 12% + Residuals
Investment of $100,000 or more
Investor Paybac k Program
Each Investor will rec eive equity shares as a part owner, with a non-managerial interest in the
Restaurant. Based on financial estimates, the maximum annual IRR is 12%. Over and above the
interest and principal repayment, Investors contributing $100,000 or more will rec eive residuals
for the life of the business as a bonus incentive.
As with our investors, our primary goal is to earn real profits and not ‘Paper Profits'. As such
we will foc us on expediting returns to investors where possible. Our existing paybac k structure
will begin paying dividend every quarter, starting in Year 2 of business operations. Investors will
rec eive quarterly interest and annual principal reduction payments over the full term of the
investment. Paybac k to Financial and Private investors will take priority over any profit shares to
the owners, Alex Hunte and Peter Smith.
8.2 Important Assumptions
The financial plan depends on important assumptions, most of which are reflec ted in the financial
statements that follow. We have been c autious with our projec tions, and incorporate a
mitigation for all manageable risks. The key underlying assumptions are:
Economy
Slow Economic Rec overy. We anticipate a slow-growth economy, rec overing from an economic
rec ession.
Business Growth
Annual Growth Rate Percentage. We anticipate modest growth over the coming years. The
financials ac count for the following growth projec tions:
° Year 2: 6% Year 4: 4%
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36. Zara Restaurant & Lounge
° Year 3: 5% Year 5: 4%
Weekly Sales Variance. Saturday will typically be our best sales for the week. The sales
volume for all other days is represented as a percentage relative to Saturday. Therefore our
weekly sales will vary as follows:
Monday: 55% Thursday: 95%
Tuesday: 60% Friday: 90%
Wednesday: 75% Saturday: 100%
Seasonal Sales Variance. In Atlanta, October through the late season is the most productive
sales period, while the summer months tend to be the slowest restaurant period. This trend is
reflec ted in the financials though a seasonal variance as follows (where October is targeted to
be our most successful sales month):
June: 70% October: 100% February: 95%
July: 75% November: 95% March: 85%
August: 80% Dec ember: 95% April: 90%
September: 85% January: 85% May: 90%
Industry & Start-Up
Fiscal Year-1 Ramp-up. Our experience in the industry confirms a longer ramp-up stage for
restaurants over other retail/service businesses. Our Annual Sales Growth is based on attaining
the following seating capacity percentage per dining period:
· Year 1: After-Hours = 53%, Lunch = 70%, Dinner = 88%
· Year 2: After-Hours = 70%, Lunch = 82%, Dinner = 100% (implied wait period)
· Year 3: After-Hours = 80%, Lunch = 87%, Dinner = 100% (implied wait period)
Six-Month Start-Up Stage. As a new restaurant entry to the Midtown market, the ramp-up in
customer draw is expec ted to extend over 6 months. This is reflec ted in a higher than average
monthly sales variance shown as follows (Worst-case / Expec ted-case):
· Month 1: 32% / 51% Month 4: 64% / 75%
· Month 2: 41% / 58% Month 5: 80% / 90%
· Month 3: 52% / 66% Month 6: 90% / 92%
Market Analysis findings are static. We assume that there are no unforeseen c hanges in
findings outlined in the Market Analysis.
Pricing & Cost Control
Competitive Pricing Model. Revenue calculations are based upon competitive price comparisons
and established menu values in the current marketplac e. The following are baseline
assumptions on Average Chec k Totals, and Average Seat Turns:
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