1. BIRYANI HOUSE BUSINESS PLAN
Comprehensive Business Plan Report
“Entrepreneurship and Small Business Management”
2. Entrepreneurship and Small Business Management
Business Plan Report
Submitted to: Sir. Farid Shami
Submitted by:
Muhammad Nauman (2012-EE-155)
Ali Yousaf (2013-EE-39)
Arshad Aleem (2012-EE-84)
Malik M. Zaid (2013-EE-37)
Mudasser Rahim (2013-EE-36)
Rabi-ul- Islam (2013-EE-38)
Date: 11th
June, 2016
3. Business Idea
Executive Summary:
This report is prepared for the course of “Entrepreneurship and
Small Business Management” guided by Mr. Farid Shami. This is a
comprehensive report on the establishment of a Biryani House. A
complete analysis of environment of this restaurant is given which
supports the succession of the project in selected location i.e. Johar
Town Lahore.
The project is financed by six partners each contributing equal
investment. Its building will be rented and it will be around competitors’
zone on M.M Alam Road. The marketing and promotion will be
accomplished by placement of bill boards and distribution of handbills
in general public. The target market is chosen upper-middle and middle-
middle classes. All the machinery will be procured from Pakistan but
some of the equipment which are not available in Pakistan can be
imported. A complete organizational setup has been defined from
managing director to the waiters. The project cost estimated is more than
the investment so a loan of 500,000 has been sanctioned from bank for 3
years payback period at 26% interest rate.
Finally, 3 year projections of income statements cash flows and
balance sheet has been performed. The thorough and comprehensive
projections along with income statement and balance sheet assumptions
show that project is a viable and practical business to be run.
4. Mission Statement:
“To serve our customers with best quality Biryani
with different flavors and a good environment.”
Other objectives are:-
Along with running a restaurant, our other objectives are
To provide better taste and different types of Biryani
To provide a free home delivery to customers up to 10 p.m within
a specified area
Make sure the availability of cold drinks and mineral water for
customers
To maintain a courteous behavior with customers, so they could
come again and with staff.
To build good relationships with the customers for the sake of
advertisement
To establish good relations with other fellows running other
companies and restaurants in that market area.
Feasibility
Johar Town is very populated area, with joyful people. It is one of
the biggest towns in Lahore. The area is so overcrowded because of its
importance. It has its own shopping malls, universities, institutes,
Theatres, gyms, and both family and community parks. The area has all
kind of facilities and bother upper and middle class people live here. So
5. the opening of a Biryani House in such a crowded area would be very
beneficial.
Moreover the market we select is Food Street, which is always full
with people all the time. Although the building for the restaurant is on
rent and owner is demanding a very high price. But this price describes
its importance. The name of market is Moon Market. The market is very
hustle bustle place and is always enriched with the people. There are
also other restaurants which provide Biryani but a place with specifically
serving Biryani and with different types would be attractive. So, in the
light of above all facts, we have a very positive notion about our success
in the market.
Requirement
Backgrounds/ Introduction of Partners:
Malik M.Zaid:
Zaid has worked in a multinational company as an accountant.
Ali Yousaf:
Ali is a business man who is currently doing import and export business.
Rabi-ul- Islam:
Rabi takes care his father’s restaurant and has a very good managing
experience.
Arshad Aleem:
Arshad is currently working as HR manager in a cooperation.
6. Mudaseer Rahim:
Mudaseer Rahim is working as chief engineer in PEL.
Muhammad Nauman:
Nauman has electrical engineering degree and has done MBA.
Company Description:
We will operate the house by the name of “Bismilla
Biryani House”. The restaurant will be locate at the Johar Town near
Allah Ho Chowk just close to a dense population of target market. The
project will be on rent and would take 6 months for the interior setup
and marketing. The house will then be opened and the operations phase
of the project can begin.
Loan from Bank:
Our sources of finance will be
1) Equity Assets
2) Bank Loan
The equity positions are:
Sr. No Name of Invester Share in Investment
1 Ali Yousaf 300,000
2 Malik M.Zaid 300,000
3 Rabi-ul- Islam 300,000
4 Mudasser Rahim 300,000
5 Arshad Aleem 300,000
6 Muhammad Nauman 300,000
Total = 1800,000 Rs/-
7. Liability from Bank:
The cost of whole project was greater than the
equity invested by us, so we needed loan to fulfill our requirement from
the bank. We presented our whole business plan and convinced them on
our success. We presented them all the documents and properly
managed to get liability from bank. The bank gave its liability at the
interest rate of 26% annually with the loan to return within the duration
of 3 years.
Working Plan
Competitive Analysis:
The proposed Biryani House will aim at providing good quality
food to people especially families of upper-middle and middle-middle
group. There are a number of restaurants located in different areas of
Lahore. Especially at Johar Town there are many competitions in our
way which are also targeting to the upper-middle and middle-middle
class. The main competitors are Karachi Biryani and Lasania restaurants.
As we are opening up at Moon Market so we have to face a lot of
competition but by providing best quality food and with the help of
marketing strategies along with competitive prices we aim at making our
name and place in the market share soon.
8. Target Market:
Moon market is a well-established market providing
all kind of facilities to customers. This is a very hustle and bustle area.
The departmental stores, restaurants and theatre cinema attracts people
towards the market. The shops remain opened till 12 am. Our product
will be targeted to the upper-middle and middle-middle class because we
will provide an appropriate environment with the product with an extra
intended service. As this is a restaurant, we are expecting that families
will contribute more in our customers.
Services and Price:
We are providing different types of biryanis with different taste
regions.
Types of Items and their Prices:
With Local Taste:
Chicken Biryani
Sr. Item Type Price (Rs/-)
1 Chicken Biryani (Half Plate) 130
2 Simple Biryani (Half plate) 100
3 Chicken Biryani (Full Plate) 230
Mutton Biryani
Sr. Item Type Price (Rs/-)
1 Mutton Biryani (Half Plate) 160
2 Mutton Biryani (Full Plate) 260
11. Restaurant Setup:
We have 15 tables with each table accommodating 6 people.
The basement of building is reserved for customers with family,
with 6 cabins for separate families.
The front of the house is decorated with name of Restaurant
“Bismillah Biryani House”.
We have arranged 5 waiters, one for 3 tables taking order from
them.
For Basement, we have 2 waiters for taking order.
To make environmental comfortable, we have arranged air
conditioning system.
Promotion:
Since this is a restaurant there will be more promotional
activity the initial thing which we will do is we can spread the pamphlets
in general public, the major strategy for promotion will be “word of
mouth” besides it is the most difficult to maintain as the chances of
failure remain a continuous matter of concerns.
Our Promotion vehicles will be:
1. E-Marketing
2. Bill Boards
3. Brochures and Pamphlets
4. Cable TV-Marketing
5. New papers Advertisements (Jang, Dawn and DailyLahore)
12. Home Delivery Service:
We will also provide a free home delivery service to those
customers who want our services at their home. For home delivery, we
have arranged two delivery boys which will provide their services
throughout the Johar Town.
Machinery and Equipment:
Understanding the customer’s individual needs
and the capability to satisfy these completely is a vital part of the
restaurant’s success. This is in turn dependent on the machinery and
equipment used to produce good quality food. Food machines are easily
available in the market the owner has to choose between expensive
brands and cheaper ones depending on how much he can afford to give
quality to his customers.
The machines can be ordered local whole sellers with a minimum
delivery period of 3 months while refurbished / reconditioned machines
are also available. Since we are new to this industry so we have
preferred to go with new machinery and we have estimated their cost in
feasibility.
13. Equipment Quantity Cost/unit (Rs/-) Total Cost (Rs/-)
Cooking Stooves 3 5000 15000
Oven 2 15000 30000
Fridge 1 30000 30000
Exhaust fans and
Lightining
4 4500 18000
Large Cooking Vessels 5 10000 50000
Large Plates 250 40 10000
Small Plates 500 20 10000
Bowls 30 100 3000
Glasses 300 20 6000
Miscellaneous 1 18000
Total = 190000
Dining Furniture and Fixtures:
Lobby Furniture Quantity Cost/Unit Total Cost (Rs/-)
Glass Tables 21 5000 105000
Wooden Chairs 130 1000 130000
Dining Cutlery Set 120 50 6000
Air Conditioners 4 35000 140000
TV LCD 1 40000 40000
Generator Large 1 120000 120000
Wall fans 10 10000 100000
Wiring and Switching 1 15000 15000
Surround Sound System 1 10000 10000
Lights 40 300 12000
Office Chair & Table Set 1 30000 30000
14. Miscellaneous 1 50000 50000
Computer Set 1 20000 20000
Telephones 3 800 2400
Security System 1 12000 12000
Total: 702400
Reception and Owner’s Office:
Dedicated area
Requirement
% age area usage
Dining 60%
Reception & waiting 5%
Staff Room 5%
Kitchen and
Preparation
20%
Owner’s Office 10%
Total 100%
Human Resource Management:
A better human resource is the core factor in developing any
business and well-motivated and adequately paid employees contribute a
major part in maintaining the standards, the human resource which we
are going to use are as follow:
15. Human Resource Quantity Wages/unit
Wages
(monthly)
Wages
(Yearly)
(Rs/-)
Chief Chef 1 20000 20000 420000
Guard 1 6000 6000 72000
Waiters 8 6000 48000 576000
Dishwasher 2 5000 10000 120000
Sweeper 1 5000 5000 60000
Manager 1 20000 20000 240000
Delivery Rider 2 4000 8000 96000
Cooks 3 10000 30000 360000
Labor wages 147000 1764000
Total 200,0000
The Labor wages is assumed to be increased 15% annually.
Taxations on Revenue:
The tax will be paid under the Pakistani law with the rate of
straight 35 percent on total income. Every tax year is self-contained year
hence taxable profit is the profit accrued or arisen in that year.
Anticipated of potential profit or losses which may occur in the future
are not considered for arriving at taxable income of a tax year. This rule
is however, subject to one exception stock in trade may be valued on the
basis of cost or net realizable value. The revenue will be rest taken out of
the liabilities and taxes from total income.
𝑡𝑜𝑡𝑎𝑙 𝑇𝑎𝑥 = 𝑇𝑜𝑡𝑎𝑙 𝑖𝑛𝑐𝑜𝑚𝑒 ∗
35
100
(Rs/-)
16. Total Cost of Project Cost
Rent 1000000
Machinery and
Equipment
190000
Furniture and fixture 702400
Interior Decoration 50000
Vehicles 70000
Pre operating Cost 100000
Total Project Cost 2112400
Financing Plan Rs. 2112400
Equity (85.2%) Rs. 1800000
DEBT (14..8%) Rs. 312400
17. Revenue and Cost Projections:
We are expecting that in starting we may have to bear the cost
below equilibrium, but as we move on with the proposed strategy of
“Quality with Consistency” our sales volume will increase. Concerning
the pricing, we will revalue our products after every 3-month period
considering the attributes of demand and product market.
The sales are expected to grow by 20 percent (year-on year) while we
are expecting that we will recover our fixed cost in almost 2 years after
which the present values of cash flows will ultimately marked under the
profits. On the other hand the increase in variable cost numbers is
anticipated relative to inflation rate which is 20 percent year-on-year.
Further on, after the consensus with different categories of market
players we are expecting the following sales breakup,
Revenue Stream % of Total Sales
Dine In 75%
Home Delivery 25%
18. Utility Requirements:
Following breakup of utility bills is expected in relation to the
equipment used in the restaurant.
Utility Charges (monthly) Charges (Annually)
Electricity 40000 480000
Water 2500 30,000
Gas 10,000 120,000
Telephone 5000 60000
Total Utility 57500 Rs/- 690000 Rs/-
As depicted above the most of the food equipment require
considerable gas during the preparation process. The preheating
procedure of the equipment before commencement of preparation also
consumes considerable gas for the boiling and roasting of all types of
meet. It is assumed that utilities expenses will be increased by 10%
every year.
19. Financial Statements
1)Balance Sheet:
End of
Construction
Year 1 Year 2 Year 3
Fixed Assets
Machinery and Equip 190000 190000
20000
170000
190000
40000
150000
190000
60000
130000
Furniture and
Fixture
702400 702400
100000
602400
702400
200000
502400
702400
300000
402400
Vehicles 70000 70000
14000
56000
70000
28000
42000
70000
42000
28000
Total Fixed Assets 962400 828400 694400 560400
Current Liabilities
Accounts payable
Rent Payable
Tax Payable
150000 200000
200000
23000
250000
200000
86000
300000
200000
121000
Total Current
Liabilities
150000 423000 536000 621000
Long term
Liabilities
500000 630000 760000 890000
Total Liabilities 1053000 1296000 1511000
Owner’s Equity 1800000 1800000 1800000
Total Assets 2853000 3096000 3311000
20. 2) Income Statement:
Year 1 Year 2 Year 3
Total Sales 800,0000 900,0000 1300,0000
Cost of Goods Sold 250,0000 300,0000 350,0000
Gross profit 550,0000 600,0000 950,0000
Operating Expenses
Electricity 480000 480000 480000
Sui Gas 120,000 120,000 120,000
Water 30,000 30,000 30,000
Rent for Building 1000000 1000000 1000000
Telephone 60000 60000 60000
Advertising Expenses 60000 60000 60000
Salary Expenses 200,0000 200,0000 200,0000
Machinery & Equipment 20000 20000 20000
Furniture & Fixtures 100000 100000 100000
Vehicles Expenses 14000 14000 14000
Total Operating
Expenses
3884000 3884000 3884000
Operating Profit (EBIT) 1616000 2116000 5616000
Interest Payment loan 210000 150000 110000
Income Tax (35%) 492100 688100 1927100
Net Profit after Tax 918900 1277900 3578900
21. 3) Cash Flow Statement:
Year1 Year 2 Year 3
Sources of Funds
Operating Profit 1616000 2116000 5616000
Add:
Depreciation(total) 134000 268000 402000
Total Funds from
Operations
1750000 2384000 6018000
DFI
Loan
1400000
Paid up Capital 1800000
Bank Borrowings 500000
22. Conclusion and Recommendation:
The restaurant being located in area like Johar Town, it will
be facing an ever increasing fierce competition therefore the
menu and sme special features must be continuously evolved.
The restaurant should work efficiently and effectively to grab
a huge part of local market share within a year.
In order to gain consumer appeal, the restaurant should
particularly take care of its customer’s service, food quality,
hygiene and cleanliness, good interior and pleasant appealing
environment.
The restaurant should use an attractive marketing policy and
promotion campaigns to place the house into a unique
category.
Best quality and freshness of raw materials to be used in the
menu must be ensured.
The restaurant can also offer an introductory discount to
attract customers.
The restaurant should also come up with fresh, nutritious and
diet menus to cater to the health conscious customers. Sugar-
free beverages should be introduced at the same time.
The house should use efficient cost saving techniques to get
the best benefit out of its pricing.
