1. Christine Chau 11BS4
Kim Wah Chinese
Restaurant
BusinessReport
Acknowledgments:
• To: Mr. Raymond Chan, for allowing me to study his business for this report
• To: Mr. Andrew Chan, who helped immensely with the two interviews.
• To: Miss Sophie Wong, who sent me the menu/pamphlet.
3. 1. Executive Summary:
This following report details the running and daily business of Kim Wah Chinese Restaurant. It will
delve deeper into the information on the business’ history (how the business began), operations (the
layout, prime function), marketing (target market, segmentation, 4P’s), employment relations (their
recruitment policy), financial conclusions, analysis of the advantages and disadvantages and a
conclusion.
To gather the information required for this report, interviews were conducted with an employee, and
they provided insights of their knowledge into the business. Both primary and secondary sources are
included in the appendix of the report, all gathered from the business employee and further research
into facts and policies regarding the business.
2. Introduction:
Kim Wah Chinese Restaurant is a small Chinese dine-in and take-away restaurant, Shop 2, 405
Concord Road, Concord West 2138, owned by a sole trader. It was purchased in 1999 by Mr
Raymond Chan, from the previous owner who established the business in 1995. Mr Chan had
purchased the business off a family member who was moving into a different industry. The main
function of the business would be to serve its customers freshly cooked food.
The location of the business is essential to its success over the years because of the advantages it
provided over its competitors. Kim Wah Chinese Restaurant has car park i. at the front of the store,
and is located near bus stops, two train stations, a public school and a hospital; all of where its target
market is.
Money was a large factor in purchasing the business, although because it was purchased off a family
member, it was sold for a price lower than the market value. Mr Chan had to go through many stages
before the banks would lend the start up costs to purchase the business, but in the end, it was able to
be proven that the business would be a safe investment, with a lower chance of failure compared with
other businesses.
3. Operations:
The prime function of Kim Wah Chinese Restaurant is to serve its customers freshly cooked food,
prepared to their tastes. In order to do this, two employees visit the market weekly to buy the needed
stock. They must estimate the stock needed during the week to avoid wastage of products as much of
the stock they purchase is perishable. However, there have been regular scenario’s where an excess
was bought and this resulted in wastage because the goods didn’t last more than a week. The
employees go every Friday morning before lunch hour, and they take the business van to Flemington
Markets to buy the needed stock. Often there is required stock, but it is unavailable for purchase, so a
trip later in the week is made to local grocery stores to gather the remaining inputs.
The stock is then stored in either the three industry sized refrigerators or in the back storeroom i.
which remains cool and dry. This is to ensure that the inputs last the duration of the week and remain
fresh for preparation at later stages.
4. The major equipment used in the process of preparation would be the stoves, ovens and various
cooking utensils. Raw inputs are put through their required processes before being served to
customers. The meat must be marinated and softened, most of the fats are removed, vegetables are
diced up and the sauces must be mixed prior to opening hours. Following this, the various inputs are
then cooked and prepared as customer’s order, to ensure freshness and quality.
However, if a complaint about the food arises, the original dish is recooked and served again with no
extra costs. Similarly, if customers have complaints with their drinks, they are replaced free of charge
too.
The outputs served to customers are measured in either in L, mL, Kg or g, depending on their nature.
Over the years, the dishes have remained a similar size, and the process and preparation have
remained the same.
4. Marketing:
Although Kim Wah Chinese Restaurant may be a small business, it still concentrates on the 4 P’s.
Firstly is the business’ product. It sells an image of authentic Chinese food from various parts of
China. Next is the price that the business sets. Kim Wah Chinese Restaurant aims towards providing
an economic-friendly family meal to its target market. Place isn’t much of a factor in this business’
market strategy because it’s a family restaurant or take-away, specifically targeting local residents and
a small market share. Lastly is Promotion, which the business has developed its own promotional
strategies and found that it works effectively.
The main target market for Kim Wah Chinese Restaurant is the local residents, parents picking up
their children at the nearby public school and the hospital visitors & workers down the road. The
customer base has changed in recent years due to the diner that opened next door. The diner brings a
Kim Wash Chinese Restaurant a bigger cultural diversity in customers because they target more
Italian and Australian based consumers.
In this business there really isn’t a specific season where customer flow increases or decreases,
however on public holidays and long weekends sales generally increase on average by at least 30%.
Kim Wah Chinese Restaurant has a small and specific customer base so advertisement is simple and
effective. It simply delivers pamphlets ii. to neighbourhood houses and encourages its customers to
grab a pamphlet on their way out. There is no need for business cards or newspaper/magazine
advertisement because this business relies heavily on and established customer base, word-of-mouth
and passerby’s.
The competition in this industry is very competitive, with a large range of restaurants, diners, and
cafes to eat in within a 5 minute walking distance. However, Kim Wah Chinese Restaurant has its
own advantages over its competitors in means such as; catering for banquets, lunch discounts, home
delivery, special offers and large set meals with an applied discount.
Market research is necessary in improving the business. Customers are asked to voice their thoughts,
likes and dislikes as they leaving. Thoughts of how their meal, or dish could be improved is also
valuable feedback, and this is how Kim Wah Chinese Restaurant discovers valuable feedback.
5. 5. Employment Relations:
Currently employed at Kim Wah Chinese Restaurant, there are 4 employees inclusive of the owner.
There are two employees who work full time, one who works part time and one is hired as a casual.
Each employee has his or her own job and responsibilities. The owner is the head of all decision-
making and has the job of chef. He makes all the main decisions and orders. The other three
employees rotate jobs of waitressing, cleaning and attending to the cashier. However, his wife, the
other full time employee, has the responsibility of making small orders and attending to major
customer complaints. The other two employees only attend to customer requests and minor customer
complaints.
Employees are hired and chosen through a series of interviews and applications. The business owner
will choose applicants with a friendly personality because the restaurant holds a reputation of attentive
and helpful staff. Employees are also more likely to be chosen if they have had some prior experience
and knowledge about waitressing.
The employees usually begin on a two week trial period, where they learn the basic workings of the
business, how to attend to customers and the other various jobs they are required to rotate around. In
these two weeks, employees must prove to be hardworking, friendly, cooperative and respectful.
6. Financial:
The financial side of Kim Wah Chinese Restaurant is left to the designated accountant. He has been
with the business since the businesses opening in 1955. It is difficult to analyse the financial aspect of
the business as financial records and sheets were not provided.
The balance sheets and records are done at half-year intervals, during which the owner meets with his
accountant and they proceed to work out the profits or losses made in that period of time.
However, growth has been evident in the business. The customer base of the business has now grown
to over 200% of what it started out to be in 1995-1996, and so it can be deduced that the financial side
of the business has also grown largely. Although, with the current economic downturn, the business
may not be going as well as it would be, because consumers are likelier to save and cook their own
meals instead.
6. 7. Analysis:
Kim Wah Chinese Restaurant has been operating successfully for the past 19 years. In comparison to
most other small businesses, it was the one in five small businesses which survived past its first year,
and it was the one in two businesses that continued trading in its second year. Although it was not
started by Mr Raymond Chan, its previous owner established the business’ foundations; the funds to
start a business, the location and the customer base.
In the years where Mr Raymond Chan was owner of the business, he has continued to increase the
customer base through the initial loyal customers who advertise through word-of-mouth. Kim Wah
Chinese Restaurant has continued to grow steadily with successful results and income growth.
However, the business could have improved its customer base if it sought out further advertisements,
such as in the newspaper or in a magazine. It would be brought the attention of many unaware people;
both a little further out from their segmented target market and from further suburbs of Sydney. The
business could also possibly branched out further and offer a ‘chef’s special’ each week to draw more
customers.
Though that being said, Kim Wah Restaurant has succeeded exceptionally well over all the years it
has been in business. For a small business, it has exceeded many perceptions on the failure rates of
small businesses and has continues for a lengthy time before reaching its end.
Just recently, in the early month of July, Kim Wah Restaurant was sold to its former competitor, the
diner next door. The diner owners had offered a great price for the restaurant in regards to the
economic downturn Australia is facing, and will continue to face in the many months. Mr Raymond
Chan sold his business and is now considering beginning his own new restaurant, also in the area. It is
most likely that it will be another Chinese take-away or dine-in restaurant, appealing to his old
customer base.
8. Conclusion:
Kim Wah Chinese Restaurant has been a very successful small business over its years of operations.
Purchased as a whim on wanting to be a business owner, it has taught Mr Raymond Chan that there is
a lot more to business than meets the eye. In every business there are many key component in order
for it to function successfully and this can be categorised by the operations, marketing, employment
relations and financial aspects. Each component of the business is crucial towards its everyday
functioning and it is important that all aspects are considered within any business.
In this report I myself have personally learnt a lot in regards to topics studied in class. I have seen
how each of the components we studied in theory works in a real business; how each component is
reliant on all the others, and the overall functioning of a business. It has taught me a lot about the
personal restrictions of owning a business, yet it has opened me up to possibilities of learning all
about the advantages and disadvantages of being in business.
