Feasibility Analysis to Start a New Indian Restaurant in UK

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FEASIBILITY STUDY:
STARTING A NEW
INDIAN RESTAURANT

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Table of Contents
Executive summary:................................................................................................................2
1. Introduction:..........................................................................................................................3
2. Product and service description:...................................................................................3
3. The entrepreneurial team:...............................................................................................3
4. Market assessment:........................................................................................................... 4
5. Competition:..........................................................................................................................5
6. Marketing strategy:............................................................................................................ 6
7. Technical and production analysis:.............................................................................. 8
8. Management capability:................................................................................................... 9
9. Financial analysis:.............................................................................................................10
10. Required financing:........................................................................................................14
11. Economic impact:...........................................................................................................15
12. Conclusions and recommendations:.......................................................................15
Reference list:......................................................................................................................... 17

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Executive summary:
The current report deals with the feasibility analysis of a new restaurant in
the UK that aims to serve Indian cuisines among the UK customers of the
restaurant industry. The analysis has incorporated the assumptions and
scope of business to gain profitability within the industry and target region.
The business owner has targeted to locate the restaurant at the Barclaycard
Arena as this is one of the commercial hubs at Birmingham, Alabama.
However, the competition at this region is higher in presence of potential
Indian restaurants. In that case, the increasing demand of the Indian recipes
has allowed the market to incorporate further ventures in this region in the
UK.
Sample Report on Indian Restaurant
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1. Introduction:
The current feasibility study will deliver the external feasibility of a new
restaurant in the UK to gauge its acceptability among the target audience.
Therefore, before the planning of a new venture is initiated, conduction of
the feasibility study is necessary to understand whether the new idea of
entrepreneurship is feasible enough to run the business in long run. In this
context, Babin and Zikmund (2015) cited that detail market research and
growth prospect of the company is important to understand whether the new
venture would recover its initial investment and meet the primary goals of
the company. Therefore, the current report will therefore deliver the
probable market share and profitability that the new venture will acquire
after execution of the business planning.
2. Product and service description:
The business will be a restaurant of Indian Cuisines in the UK market to
promote the products in the foreign market. Therefore, the key products and
services in the new venture will be different flavours and essence of Indian
culture and tradition through different types of dishes and food items. In that
case, Krueger and Casey (2014) cited that product and service specification
needs assurance of quality measure to offer value for money to the
consumers. Therefore, the service attached to the Indian food items will be
the communication, warm behaviour and care of the restaurant visitors with
fulfilment of their needs immediately.
3. The entrepreneurial team:
Name: “Indian Curry House”
Address: The restaurant will be introduced in Birmingham, Alabama near
the Barclaycard arena

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Telephone number and email address: The telephone number and the
email address of the business will be of the owner of the restaurant. However,
disclosure of the contact information will be after the approval of the
business plan.
Qualification: The minimum qualification of the owner of the restaurant
needs to be masters in business management to develop an effective
entrepreneurship planning and execute the same properly. However,
qualification is not the barrier of an entrepreneurship development.
Work history: The owner needs to have significant experience on a Indian
restaurant to develop understanding on the requirements of the same.
Moreover, in the opinion of Yeung (2013), an entrepreneur needs to have
sufficient prior experience in that same area of responsibility to sketch a new
ventures on the obstacles, faced by the individual. Therefore, the owner
needs to have prior experience in the area of restaurant services to design
the plan accordingly.
Status: The current status of the owner of the restaurant is an individual
and therefore, the business will be a sole trader.
4. Market assessment:
Market demand:
Demand of the Indian cuisine in the UK market has attained a steady growth
during last decades due to the changing lifestyle of the residents of the same.
The increasing number of restaurants in the UK has evidenced the same. The
British restaurant is now facing lack of sufficient curry flavours to the target
audience of the UK residents. In that case, the statistics of the Indian foods in
Britain reveals that the number of customers, preferring Indian food items is
phenomenal. As a reason, about 10000 Indian restaurants are serving the

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typical Indian flavour to the UK residents where the same serves more than 2
million meals in the UK every week (BBC Inside Out - Curry crisis. 2017).
Market trend:
According to the current statistics, the Indian restaurant industry is worth
more than 2.5 billion every year. However, the section is facing a crisis of
proper curry chef and other Indian cuisines in Britain. Use of Indian herbs
and special spices has made the Indian recipes comparatively more popular
than the local recipes and typical fast foods of the UK. In that case, the
owners of the Indian restaurants in the UK are visiting India to find out
potential chefs to deliver sufficient Indian flavour in Britain (Economic fears
as Indian food prices soar. 2017). Thus, the Indian restaurants in the UK have
a scope of gaining significant market share through introducing some unique
Indian recipes.
Changes:
The price of Indian restaurant food has attained a steady growth of 18% in
its price level more than a year in the UK. The economists have explained
such hike in the price of Indian food in the UK as a significant hike in
commodity price hitting the end product of the cuisines. In the opinion of
Zhang et al. (2015), price hike reveals the lower purchasing power of the
customers and therefore, lower sales volume during the financial years.
However, crisis of efficient Indian chef has also contributed to create such
situation. Therefore, recruitment of skilled chef would be another option to
deliver diversified flavours at an affordable price range.
5. Competition:
Competition is another factor in creating a new venture in the target market
region as the level of competition reveals the level of market saturation and
thus the further scope of the new venture to attain desired market share in

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the target market region. Following are some competitors in the UK serving
Indian food.
Competitors Location Prices Products and
Services
Lasan 3-4 Dakota
Building, James
street,
Birmingham B3
£12.95 Indian cuisine,
specifically the
sea foods
Raja Monkey 1355 Stratford
Road,
Birmingham B28
£10 Speciality of this
restaurant is the
south Indian thali
Itihaas Centre of
Dalkeith
£16.95 Prawn related
recipes are
special with
Indian herbs
Mughal e Azam Stratford Road,
Birmingham B11
£7.45 - £24.95 The restaurant
serves the typical
Mughal and
Pakistani cuisines
6. Marketing strategy:
Based on the above information and analysis following is the marketing mix
that the restaurant would follow in attaining the expected market share and
profitability in future.
Product:
Being the restaurant serving Indian cuisines, the new entity will serve the
typical Indian foods including south Indian foods, north Indian cuisines,

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Bengali dishes and traditional tastes of the typical food items. In that case,
the number of products in the new restaurant needs to be relatively higher
than the other restaurants so that the target audiences would find wider
option in Indian cuisines. As cited by Sheth and Sisodia (2015), range of
products and services ensures encounter of diversified needs and
requirements and thus, acquire a wider number of potential customers.
Price:
Pricing option reveals the value for money against the investments from
customers to deliver equivalent value of the customers’ money. In that case,
in presence of the other potential competitors at the same location,
competitive pricing would be more potential option to offer the Indian
cuisines at comparatively lower price range. Such pricing policy would attract
comparatively more customers over its competitors due to availability of
wider Indian cuisines at affordable price range.
Place:
As mentioned in the previous section, the location of the restaurant is at the
Barclaycard Arena where the other restaurants are located. In regards of the
location, Leonidou et al. (2013) commented that business would faster
flourish at the commercial places due to high demand of the specified
products. In context of the presence of other restaurants in this area, it is
transparent that the place possesses higher demand of food items and thus,
feasible place to open a new venture. On the contrary, Kumar et al. (2013)
argued that location of a new venture needs to be at the needy places where
the option of the same product and its availability is limited in nature. As
mentioned in the competitors’ price range, the average price range of the
entire product line needs to between £7 and £12 to attract customers for
generating sales. However, the profit maximisation needs further increment
in the pricing to retain greater margin in its profitability. Apart from price

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increment, the venture would further attempt for increasing the volume of
the sales to attain profitability.
Promotion:
Promotion is another marketing strategy for the new venture to push the
Indian cuisines among the UK residents and ensure the growth of the
business at a certain rate of improving the revenue and profitability. In this
context, Sheth and Sisodia (2015) stated that promotion would follow both
the online and offline mode where selection of proper mode of promotional
channel enforces to introduce the restaurant through hoarding initially.
However, in the era of rapid growth of internet usage in the developed
countries, online promotion including email marketing, social media
marketing and mobile marketing would be potential enough to attain wider
customer volume.

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7. Technical and production analysis:
Technical and production deal with the use of techniques and equipments in
the production process. The technique is based on the typical cooking
process of the Indian foods. However, the equipments of cooking would be
quite improved to conduct faster preparation of the Indian cuisine. However,
in case of Indian foods, the real flavour of the cuisine needs appropriate time
for preparing the Indian recipes. In the words of Leonidou et al. (2013),
quality of the products, specifically the food products relies on the
preparation mechanisms and the required time of production. Therefore,
preparation of Indian cuisine needs significant time in case of the Tandoor
items. However, there are also mechanisms to prepare the ingredients so
that the preparation of the final item needs minimal time. On the other hand,
Sheth and Sisodia (2015) stated that representation of the end product
matters in attracting customers through making the same an appetiser.
Therefore, continuing the discussion, garnishing mechanism needs to be
proper so that it would improve the representation without hampering the
real flavour of the item. Moreover, the equipments in this context need to be
high end electronic equipments with the user friendly interface of easily use
the same. In case of quality, hygiene is a crucial element that needs to be
assured through proper cleaning process of wastages, utilisation of fresh
ingredients and the prevention of damages in case of the raw materials.
8. Management capability:
At the initial phase, the restaurant needs one manager and one cashier to
decide the menus and operate the entire process of production and
distribution of dishes based on preferences and demands. The manager of
the new restaurant needs to have sufficient knowledge on the business
management and workforce handling to monitor both operation and staffs’
performance. In the opinion of Dragičević et al. (2014), managers are liable
to motivate the workers including chefs and waiters to serve the food and

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behavioural treatment as well. On the other hand, the cahier needs sufficient
knowledge on the accounting principles and practices to maintain accuracy
in financial statement preparation and reporting of the same. Therefore,
looking after the planning and goals of the new venture, a proper hierarchy
in the company is needed to convey the instruction following top-down
approach of management.
9. Financial analysis:
Income statement:
Particulars Year 1 Year 2 Year 3
Amou
nt
(GBP)
Amou
nt
(GBP)
Amou
nt
(GBP)
1. Selling price per dish 7 9 10
Costs relating to the
service
Variable costs
Direct materials per
dish
3 3.15 3.31
Direct labour per dish 2 2.1 2.21
Variable production
overhead
2 2.2 2.42
2. Total variable cost
per unit
7 7.45 7.9325
3. Contribution (1-2) 0 1.55 2.0675
4. P/V ratio 0% 17% 21%
5. Number of dishes
served
30000 33000 36300
6. Total contribution 0 51150 75050.

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(3*4) 25
Fixed manufacturing
costs
Production overhead 2000 2000 2000
Administration and
office cost
700 700 700
7. Total fixed
manufacturing
overhead
2700 2700 2700
8. Fixed selling
overhead
9. Total fixed costs
(7+8)
2700 2700 2700
Profit / (Loss) -2700 48450 72350
Profit Margin -
1.29%
16.31
%
19.93
%
Cash flow statement:
Projected cash flow statement
Parrticulars Year 1 Year 2 Year 3
Amou
nt
(GBP)
Amou
nt
(GBP)
Amou
nt
(GBP)
Cash flow from operating
activity
Operating profit -2700 48450 72350
Add. Non cash and non
operating expenses
Depreciation 1000 1000 1000

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Amortisation 1000 1000 1000
Loss on sale of assets 500 600 700.00
Adjustment for changes in
working capitral
22000 22000 22000
Cash generated from
operating activity before tax
21800 73050 97050
Less. Tax paid 0 14535 21705
Net cash flow from
operating activity
21800 58515 75345
Cash flow from investing
activity
Purchase of land -
75000
-6000 63000
Purchase of oven -
25000
-5000 15000
Net cash used in investing
activity
-
10000
0
-
11000
78000
Cash flow from financing
activity
Introduction of capital 28762
0
25000
Cash flow from financing
activity
28762
0
0 25000
Net cash increased during 20942 47515 17834

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the year 0 5
Add. Opening cash balance 10000 21942
0
26693
5
Closing cash and cash
equivalent
21942
0
26693
5
44528
0
Balance sheet:
Projected balance sheet
LIABILITY
Capital 28762
0
28762
0
31262
0
Loan from bank 10000 10000 10000
Creditors for goods 5000 6000 5600
Creditors for expenses 380 380 480
Total 30300
0
30400
0
32870
0
ASSETS
Land 20000
0
20000
0
20000
0
Building 10000
0
95000 10000
0
Ovens 1500 1000 6000
Cash 1500 8000 22700
Total 30300
0
30400
0
32870
0

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10. Required financing:
Particulars Amount (in
£)
Legal 5000
Office supplies 5000
Insurance 2000
Land and building 75000
Security deposit 15000
Furniture and fixture 38000
Bathroom 14600
Mechanical 5890
Plumbing cost 12000
Floor and wall décor 22000
Electrical equipments 15640
Food licensing 30000
Kitchen equipments 35480
Music and screens 4550
Cleaning 1500
Promotional cost 5960
Total 287620
According to the above option of fund acquisition, it is clear that the total
investment in the new venture of opening a new Indian restaurant chain is
£287620. The amount needs significant external sources to acquire the fund
for initial investment in venture development process. In that case,
Dragičević et al. (2014) started that bank loan is most convenient option of
funding to acquire the fund against a certain cost of borrowings in the form
the interest rate. However, the source of finance would need the break even

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statement and profitability in future to ensure whether the lent amount
would be further recovered within a certain time period.
11. Economic impact:
Economic impact includes not only financial contribution but also the
improvement of social status of the residents of the UK. Development of this
venture would reduce the rate of unemployment in Birmingham and other
regions indicating enriched economy through improved purchasing power.
Therefore, creating the employment is also an economic impact delivering
hike in individual and national income through generating flow of cash. On
the other hand, tax payment would improve the treasure of government that
in turn would be utilised in further development in infrastructural base of the
region and other rural regions. Supporting to this statement, Dragičević et al.
(2014) mentioned that improved purchasing power of residents further
contributes to the social financial enrichment of the customers in
Birmingham and poor economic regions while contributing to the national
economy as well. As a result, frequent flow of fund through the new venture
would therefore improve the economic value and thus, hike the value of
currency over the international region.
12. Conclusions and recommendations:
Based on the above discussions and analysis of the market analysis, it is
clear that the new Indian restaurant in the UK is highly feasible in nature to
execute the business idea in real. In the context of current trend and
demand statistics of the UK restaurant chain, Indian cuisine has a
comparatively higher demand and preference due to the ingredients, used in
preparation of the recipes. Therefore, based on the demand of the Indian
cuisine, specifically the curry items, the Indian restaurants in Britain are
eager to hire the chefs from the India to add the real flavour of Indian

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tradition and culture. However, in order to plan the business in detail on this
feasibility report following are the recommendations to be followed.
Risk analysis and sensitivity index:
The current feasibility report excluded the risk factors and its impact on the
business and therefore, the business plan needs detailed information on the
probable risk factors and the influence of the same on the business operation.
In this regards, risks register matrix is a potential tool to analyse the risk
factors along with the severity and trigger.
Clear assumptions and deliverables:
The business plan needs clear descriptions on the key assumptions and
deliverables to set the goals on the same. Such assumption would therefore,
incorporate the uncertain elements to make adjustment on time.
Primary data collection:
Before the planning and execution of the current business idea is conducted,
the owner of the venture needs to accumulate primary data in terms of
customers’ opinion to set the menu of the restaurants. Such opinion would
assist the restaurant manager to prioritise the food items and proceed with
the production process accordingly.

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Reference list:
● Babin, B.J. and Zikmund, W.G., (2015). Exploring marketing research.
Cengage Learning.
● BBC Inside Out - Curry crisis. (2017). [online] Bbc.co.uk. Available at:
http://www.bbc.co.uk/insideout/eastmidlands/series7/curry_chefs.shtml
[Accessed 22 Feb. 2017].
● Dragičević, T., Guerrero, J.M., Vasquez, J.C. and Škrlec, D., (2014).
Supervisory control of an adaptive-droop regulated DC microgrid with
battery management capability. IEEE Transactions on Power
Electronics, 29(2), pp.695-706.
● Economic fears as Indian food prices soar. (2017). [online] Ft.com.
Available at: https://www.ft.com/content/66b88094-1976-11e0-a853-
00144feab49a [Accessed 22 Feb. 2017].
● Krueger, R.A. and Casey, M.A., (2014). Focus groups: A practical guide for
applied research. Sage publications.
● Kumar, V., Bhaskaran, V., Mirchandani, R. and Shah, M., (2013). Practice
prize winner—creating a measurable social media marketing strategy:
increasing the value and ROI of intangibles and tangibles for hokey
pokey. Marketing Science, 32(2), pp.194-212.
● Leonidou, L.C., Leonidou, C.N., Fotiadis, T.A. and Zeriti, A., (2013).
Resources and capabilities as drivers of hotel environmental marketing
strategy: Implications for competitive advantage and
performance. Tourism Management, 35, pp.94-110.
● Sheth, J.N. and Sisodia, R.S., (2015). Does marketing need reform?: Fresh
perspectives on the future. Routledge.

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