Downtown Tasty Delights – A New Restaurant In London Offering Traditional UK Food

Management of the New Business

Entrepreneurship refers to the process of discovering new days by combining a set of resources (Adeola and Evans, 2020). When the organization can generate a market value using a combination of resources that is greater than the market value of those resources, the entrepreneur will make a profit. An entrepreneur is the person who brings new set of innovations and ideas in the business model and aims to develop a profitable business that have good growth prospects in the environment. This report is based on a new business that belongs to the hospitality sector of the UK. The proposed business idea is a restaurant named Downtown Tasty Delights; the restaurant will be based in London UK (Hussain et.al., 2018). The restaurant will offer traditional English, Welsh, Scottish and Northern Irish dishes and desserts which is main USP to attract Customers. The restaurant will offer Dine-in services along with takeaway and delivery options for the customers. The exterior and interior design of the restaurant will be based on the Traditional UK theme which will attract more tourists and locals.

The management of the venture is one of the essential aspects of the newly proposed business as it will ensure that the business sustains the UK environment for a longer period (Assaf, Kock and Tsionas, 2022). The Key people that are associated with Downtown Tasty Delights are further discussed below:

• Restaurant manager- The manager of the restaurant is one of the key people who ensure that the operations are handled well at the managerial level (Chatkin, Correa and Santos, 2021). They are responsible for hiring, managing employees, checking incoming orders, regulating bills, and taking care of the table reservations. The key skills required for this job role are managerial, communication skills, and analytical skills.
• Chef- The essence of every restaurant is the food that is served at the particular restaurant. Downtown Tasty Delights will be hiring a professional chef that has relevant experience in the same industry and can give the local touch to the food. The key skills required for this role are cooking skills, managing skills, multitasking, and creativity skills (Bierly III, and Daly, 2017).
• Waiters- They are considered a representative of the restaurant and they are required to have good communication skills which will help in establishing good communication between the customers and the restaurant. The waiter should be open to listening to the requirements and feedback of the customers. The skills required in waitressing are communication skills, customer service skills, and good memory (Dizaji and Van Bergeijk, 2013).

The market gap that Downtown Tasty Delights are looking to fill is offering customers the UK ethnic food which will attract both tourists and the locals. Currently, there are very restaurants in the downtown streets of the London and therefore there is a requirement for the same. Downtown Tasty Delights is looking to offer traditional English food at a very reasonable and low cost as compared to other restaurants in the same area (Heimerl, et.al., 2020). This will help the firm in attracting more and more customers to the restaurants as they will be willing to taste new food at a comparatively better price than other restaurants. The main target market of the respective restaurant will be both locals and tourists as the restaurant will offer the tourists a new variety of food that they haven’t tried. The locals will be targeted by using the traditional English approach of cooking through which more and more local people of the city would prefer eating at Downtown Tasty Delights. The target market of Downtown Tasty Delights is further discussed below:

• The restaurant will be targeted people based on demographics as they will be targeting the people who are the locals of the city and the people who are visiting as a tourist in the downtown street of London. This will help the organization in increasing its growth prospects as the target customers of the company will be diversified which will decrease the dependency of the company on one particular market segment (Jewell, Lewnard, and Jewell, 2020). Setting up a target market will help in increasing the growth of the organization they will get an idea of the customers they want target. The strategies and products of the organization will be based on the target customers who add value within the business.
• The organization will only target the people who want to eat the English traditional food as the restaurant is looking to make this their USP (Johnson and Tuckett, 2021). Through this, the organization will be able to target the particular segment of people who prefer eating the English traditional over the other cuisines of food.

The objective of Downtown Tasty Delights is discussed below:

• The objective is to serve the quality and affordable prices in the downtown streets of London. Through this, the organizations aim to generate trust ability and assurance in the customers (Kaur and Rampersad, 2018).
• The organization is further looking to focus on the atmosphere and ambiance through which the business aims to attract more customers and the great ambiance will leave a huge form of an impression on the overall dining experience of the customer.
• Downtown Tasty Delights aims to provide authentic and most delicious English origin food that has the essence of every part of the UK.

The PESTLE framework analysis of the restaurant industry is further discussed below in the context of the new business venture-

Political factors- These factors help assess the extent to which the policies of the government interfere in the organization (Kontis, et.al., 2017). Several laws are related to safety and health, trade policies, taxations, environmental law, restrictions on trade, etc which directly impact the hospitality industry. The political stability in the environment helps ensure that the new proposed business idea of the restaurant will flourish. The government policies that may change over time will somehow impact the restaurant in positive and negative terms depending on the change introduced in the scenario. The health and safety-related policy in the downtown tasty delights must be according to the general hygiene and cleanliness standards otherwise the organization may have to face negative impacts of the same.

Objectives of Downtown Tasty Delights

Economic factors- These factors are helpful for the business as it directly helps in managing the long-term and short-term goals of the company. The economic factors help the company in encompassing the interest rate, inflation, economic growth, and the purchasing power of the consumer (Liu, et.al., 2020). The hospitality and especially the restaurant industry are highly dependent on the economic conditions of the country. This will lead to low-income growth of the people which will directly lead to fewer sales of the restaurants. Downtown tasty delights should keep up with the economic conditions as they are directly concerned with the performance of the new business idea in the market.

Social factors- The social-cultural aspect refers to the factors that a supply-demand model has to undergo. The traditions, beliefs, and cultural values are somehow dependent on how society reacts to the things around them. These factors directly impact the hospitality industry and therefore these factors must be assessed critically. The restaurants must assess the behaviour and taste of the consumer as it will derive profitability in the business (Hu et.al., 2020). The restaurant industry is one of the growing industries which are now moving towards organic food and therefore the proposed business should focus on the organic food segment as it is currently in demand. The growing population and further increasing demand of the customer are sensitive towards the employees as they have to indirectly or directly influence the restaurant industry.

Technological factors- This refers to the factors which include automation, innovation, and technical awareness which directly influenced the communication, distribution, and production operations of the business (Mo, Wang and Niu, 2016). The hospitality sector is dependent on technological changes as the innovations help in making the work much easier and more convenient. The new proposed business should be technically advanced as it will directly help in the quotation of more and more customers in the business. The downtown tasty delights should use advanced payment acceptance techniques and CCTV cameras which will directly help the customers in terms of convenience.

Environmental factors- The current ongoing crisis in the environment has given a rise to the environmental factors that impact business operations. These factors include carbon footprints, recycling, scarcity of raw material, and pollution. The new proposed business should consider these factors as a priority to sustain in the business environment for a longer period. The hospitality industry works on the beauty of nature and therefore downtown tasty delights should consider these factors as a top priority (Nandonde, 2019). The restaurant industry should work in collaboration with the government as this will directly help in lowering the risks of damage that can be caused by environmental issues. The industry that is related to food must appreciate and recognize the tendency of the consumers that are shifting to plant-based diets as they know that the meat industry is somehow damaging the environment.

Legal factors- These refer to consumer rights, product Safety advertising, and health concerns-related factors. The organization is required to play an essential role in the industry in terms of bringing the strategies that are composed of the same. The hygiene criteria and food quality are two crucial factors that the new proposed business should consider otherwise they may face legal complications against them. These safety standards and minimum daily wages must be maintained otherwise the organization is open to legal challenges against them (Riyadi, and Munizu, 2022).

PESTLE Framework Analysis of the Restaurant Industry

Initial Capital Requirement

In every organization, there is a need to procure finance. Finance is the lifeblood of the business which helps in running the operations of the enterprise. Finance is essential for various purposes such as diversifying the operations of the business, expanding and achieving the sound positions of the business, there is a need to raise the funds in the business. There are various sources of funding such as short-term, medium-term, and long-term sources. These sources are further classified into internal and external sources of funds (Chatkin et.al., 2021). The internal sources of funds are those which are generated within the organization whereas external sources are those funds that are generated outside the organization.

There are various forms of external sources which can be described as given below:

• Bank loan:It is a form of loan which is taken from the banks for a specific purpose. The customers have to pay the rate of interest on the borrowed amount which depends upon the nature and period of the loan (Saaddine, et.al., 2008). Bank loans are the common form of funding that is generally taken by new and small start-ups. They are generally a straightforward and quick way to secure some funding that is required for the operations and incorporation of a business. Downtown tasty delight can use this particular option for raising the funds that are required at the initial stage of the business. The bank loans are the fixed liability that the organization will need to pay along with the interest amount on the due date. The organization can currently opt for this particular method of raising funds and further the organization can pay after they can generate revenue enough to pay the bank. The option that downtown tasty delight currently has is a loan of 800,000 at an interest rate of 9.7%. The principal amount will be paid by the organization after five years of period.
• Angel investors-These are the people and groups of people who are looking to invest their money in new start-ups and business ideas who are looking to explore the business environment and actively contribute to it. The Angel groups are often found less and they are only willing to invest in the start-ups that can solve a big issue that the business environment is currently facing (Sigala, 2021). Downtown tasty delight is focused on enhancing the quality of the English food that is available in the downtown St of London. This is a good investible idea and there might be some Angel investors who are looking to invest in this particular business idea to generate a good amount of returns in the future. This amount is not a liability as the businesses only have to pay a certain amount of the company’s total profit once they have some profits in the company. The angel investors are the ones who increase the growth of the organization by investing their money as well as efforts. They also bring some expertise in the business from their core areas which help the organization in enhancing their productivity.

Financial performance indicator refers to the keep eyes and quantifiable measurements that help in determining, tracking, and projecting the well-being of the economics of the business. Several types of financial performance indicators can be used to provide a financial overview of the company to external investors. Through financial performance indicators the users of the accounts of the organization will get an overview of the business and performance which plays an important role. The key performance indicators that downtown tasty delight will use a further discussed below –

Gross profit margin- This factor helps the company in Analysing the situation of the company and if the prices of the products and services offered by the companies are fundamentally right or not (Tödtling, and Trippl, 2018). This is the overall profit that a person gains without covering up any fixed operational costs. The simple formula that can be used to calculate the gross profit margin of the restaurant is-

Gross Profit Margin = (Revenue – cost of goods sold) / revenue

• Debt asset ratio–This is another financial performance indicator that the organization can use to communicate the financial position of the company to external investors. This refers to the asset that is financed by the company using the debts. This refers to the financial leverage that is used by the company. A high ratio of downtown tasty delight will indicate that the organization is required to re-evaluate the maker of shareholders and debts wisely. This is considered a critical key performance indicator that helps in determining the credibility of the business in the eyes of the potential and current investors of the company (Wang, 2018).
• The expected profit margin and revenue per client-This is another financial performance indicator that the company is required to communicate to the external investors like the average revenue that is generated per customer will help in analyzing the profitability stricture of the company (Yoshino, Taghizadeh-Hesary and Otsuka, 2021). This will directly help in initiating the take me of analyzing the potential growth prospects of the restaurant.
• Expenses-this is another important aspect of the financial performance as higher expenses suggest that the cost of sustaining and the market is high (Zhang, et.al., 2020). An organization that has high expenses is less likely to sustain in a recession. And therefore, the investors generally ignore investing in such companies. The expenses of downtown tasty delight are not much as the expenses can be segregated according to the daily usage and customer retention.

These are the general financial performance indicators that can be used by the organization to bring the interest of the investors. These data must be clarified with the investors as this will help them in making an informed decision and there won’t be any problem in the future. Through this, the organization will be able to attain the desired goals by generating the resources and funding that they need to carry out the day-to-day activities within the company (Bierly and Daly, 2017). Through this, the goodwill of the new proposed business will also be enhanced as the organization is promoting transparency in terms of documentation which will attract more investors and customers.

The main aim of the organization is to generate a good amount of revenue by maintaining the financials of the restaurant in the best manner possible (Yousuf and Feng, 2021). The start-up is required to evaluate and predict the future financial position of the company. This is essential for the organization as the owner of the restaurant is investing the capital in the operations and therefore it is essential to predict the future profits and cash flows. These documents will help in evaluating if the investment option is viable or not. The estimated financial forecasts of the organization are attached in the Appendices of the report. Through this, the owner of the organization will be able to get a brief idea about the situation and how they can enhance their operations to deliver maximum results in the organization.

(Refer to Appendices for the estimated financial forecasts)

Conclusion

From the above report, it can be concluded that there is a range of challenges that the organization is required to face while starting up a new idea. The hospitality sector must be assessed critically as this will help the new venture of the restaurant in terms of making strategies and dealing in the business environment in the best possible manner. The new business must assess the external environment of the industry as it will further play a major role in deciding the sustainability and profitability of the business. The financial aspects of the new business venture are also critically analyzed as this will help in planning the financials and coming up with strategies to maximize the results and profits. The estimated forecasts of the company must be made as it helps in giving a proper structure to the company which can be followed shortly. This also helps in determining the feasibility of the business in long terms aspects.

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