Legal Status and Ownership
Sea-Sharp is about to launch the business in Mauritius on December 31st, 2018. The required paperwork has already been completed in accordance to the legal requirements of the Mauritius government. Access to the website and online mobile application has already been opened for the public to see through which they can develop understanding about the concept as well as the experience they can expect at the restaurant. Some of the most prominent dishes will also be mentioned for the customers to understand the type of food that will be served. Further marketing can advertisements will also be done in due course of time for promoting the brand and increasing awareness among the customer base (Leitch 2018).
Sea-Sharp will be providing a fine dining experience within a submerged aquarium that will allow the diners a full view of the sea life and the sea bed and will be managed by the owners as a one of one proprietorship business with no plans of opening any franchises. The restaurant will provide a one of a kind experience for the customers of the rich marine environment, ecosystem and geography surrounding the island which currently no other business provides in Mauritius. The application fees, registration fees and necessary licenses and permits have already been acquired from the government as well as the local authorities. Moreover, the permits from health and safety agencies have also been acquired and the premises have been built according to the industrial standards of health and safety (Koplovitz and Shenkar 2014).
Hospitality and Tourism has been a rapidly growing industry in Mauritius and has been one of the most significant sources of economy in the country. According to World Travel and Tourism Council Hospitality, Travel and Tourism contributed to 8.4% of the total GDP of the country, as of 2016, which rose by another 2.7% by 2017 and expected to rise to 9.2% of the GDP by 2027 and create employment for 45,000 people. This shows that there will be a significant increase in the industry in the next decade which can allow Sea Sharp to prosper and grow as it will provide both a fine dining as well as tourism approaches (wttc.org 2018).
The hospitality and restaurant industry in Mauritius have increased by 6.7% between 2014 and 2015 and is expected to increase to 10.6% by 2020 with annual revenues generated up to Rupees 36.4 billion (wttc.org 2018). Estimates also show that restaurant and hotel business will have total earnings of over 50 billion rupees by 2020, which shows a significant potential of growth of this sector (wttc.org 2018). There are several international businesses operating in the country, however none of the businesses currently offer the experience that is given be Sea Sharp and the concept can be understood to be at the first stage of the product life cycle (PLC) and is expected to grow within the first few years of being operational.
In terms of ocean based themes, the main players in the Restaurant and Hospitality industry in Mauritius includes Ocean Basket, Ocean Restaurant, Ocean Once beach and Club Restaurant and Le Flamboyant with provides a Sea or Ocean based experience for the diners. These companies have been operating for over 10 years in Mauritius and have developed a significant growth. However Sea-Sharp provides a unique experience that sets it apart from these companies, providing a complete underwater view for the diners and thus will be one of a kind in the country. Additionally, due to a strong tourism sector in the country, a significant amount of the customers will be tourists and nature enthusiasts who would like to imbibe upon the whole underwater dining experience. Other participants in the business can include marine biologists and conservation scientists that can educate about the various marine lives visible from the restaurant. Additionally, the business can also hire professional divers who can interact with the marine life forms to provide entertainment to the diners.
Business Description and Analysis
The main success factors that can help in the growth of the company includes the quality of the fine dining experience, the view of the marine habitat and sea bed as well as through the quality of food being offered in the restaurant including various sea food and cuisines from around the world.
Currently there is a rapid growth in the themed restaurant business, especially for those restaurants that captures the beauty of the Oceans like the ocean sides and oceanic food. Restaurants in Mauritius that offers such experiences for the customers have seen a lot of growth over the last 10 years mainly due to an increase in tourism in the islands and an increase in customers who are interested in the marine life. Due to this, more and more businesses are opening up providing an experience of the seaside and sea food for the customers.
It can be estimated that in the first 2 years, the sales of the restaurant can increase by 45%, and in 5 years it will be able to grow by almost 100%, doubling in the profits and become one of the top restaurants in the country. On the long term, the business can also expand further, adding new zones connected to the existing plan through underwater tunnels that can further enhance the experience of the customers.
The market for Sea-Sharp will include customers who wanted to get a unique dining experience including both locals as well as tourists. The main target customers would include tourists, business professionals as well as individuals wanting to have a fine dining experience in a unique way. The segmentation of the market therefore is made into two broad categories: tourists and fine diners. The table below provides an overview of some of the key characteristics of the two market segments or target market:
|
Characteristics |
Tourists |
Fine Diners |
|
Demographic |
Age: 5 to 60 years Income: Above Rs 20,000 Economic Status: Mid to high income |
Age: 10-60 Income: Above Rs 10,000 Economic Status: Medium |
|
Psychographic |
Values: Willing to pay for an exquisite experience Attitudes: Interest in the beauty of marine life and habitat, wildlife enthusiast, nature enthusiast Personality: Outgoing, interactive, open minded, prefers sea food |
Values: Willing to pay for a new fine dining experience. Attitude: Interested in different culinary dishes around the world Personality: Prefers fine dining restaurants as places for social interactions, business meetings and for personal leisure |
|
Geographic |
Country: Any country |
Country: Any Country |
|
Behavioral |
Spending ability: Moderate to high Benefits sought: New experiences |
Spending Ability: Moderate to high Benefits Sought: Ambience and Food Quality |
In the restaurant business, the consumer behavior is positive for the growth of the business. The target consumers are the ones who are willing to spend the extra money to get a unique dining experience that is ideal for tourists who cannot opt for adventure tourism activities such as scuba diving and snorkeling. Consumers who are environmentally friendly and are nature enthusiasts would also be drawn to this experience as it can allow them to see the marine life and the beauty of the ocean bed without disturbing the habitat for which they can pay the extra amount.
Currently there are no competitors for Sea-Sharp in Mauritius that provides the same experience for the diners, and Sea-Sharp is one of its kinds in the country. Similar concepts have been used by some restaurants such as the Ithaa Undersea restaurant in Maldives, Al Mahara in Dubai and Cargo Hold restaurant in South Africa. However this concept is completely new in Mauritius. However Ocean Basket and Ocean Side beach and resort provides an experience of the ocean side and sea food for the customers, who can be a significant competitor for Sea Sharp in terms of the food provided. Using the Porter’s Five Forces Analysis, an analysis of the competitor market for Sea-Sharp has been analyzed below:
Success Factors
Competitive Rivalry: No underwater restaurant in Mauritius, High Customer Loyalty, Fast growing hospitality and tourism industry.
Buyer Power: Growing hospitality and tourism, one of its kind venture in the country, large customer base.
Threat of Substitution: Other businesses following the same idea, high cost of change
Supplier Power: Many suppliers are available for seafood supplies from local market as well as international merchants, easy access to most of the supplies.
Threat of New Entry: Underwater restaurant is gaining popularity, advantage of being a unique idea, large hotel businesses can easily enter into this market segment.
In order to promote Sea-Sharp, the owner (Mr/Ms X) would utilize various marketing strategies for the promotion of the restaurant and increase awareness of the brand in the market. Listed below are the platforms that can be used for the marketing purpose:
Social Media (Facebook, LinkedIn, Twitter, and Instagram): These services can be used for online campaigns and promotions for Sea-Sharp in which free coupons will be distributed to attract new customers for the opening day (Hassan et al. 2015).
Print Media (Newspapers and Flyers): Newspapers will also have advertisements for Sea-Sharp and flyers will be distributed at several gas stations and tourist stands (Ertimur and Coskuner-Balli 2015).
Graphic Media (Billboards, YouTube) Billboard on the roadside will also be used to promote Sea-Sharp highlighting the experience and food offered and the promotional prices. Videos on YouTube will also be circulated and the links shared on social media (Ananda et al. 2016).
Public Media (Radio and Television): Advertisement campaigns will also be aired on radio and television channels on the primetime (Habibi et al. 2015).
Sea Sharp will provide buffet services in which assortments of various types of dishes will be available from which the customers can choose from (Lee et al. 2016). The buffets will be offered for Breakfast, Lunch and Dinner and will be assorted into the categories: vegetarian seafood, non vegetarian sea food, chef’s special buffet spread and traditional buffet spread.
|
Vegetarian Seafood |
Non Vegetarian Seafood |
Chef Special Buffet Spread |
Traditional Mauritius |
|
|
Buffet for 1 |
Rs 600 |
Rs 1200 |
Rs 1500 |
Rs 1000 |
|
Buffet for 2 |
Rs 1000 |
Rs 2000 |
Rs 3000 |
Rs 1800 |
|
A la Carte |
||||
|
Price |
As per menu price |
In order to promote the business, discount coupons will be distributed to the customers and free add on coupons for drinks or desert will be given to repeated customers to gain their loyalty (Barman et al. 2017). Also food bloggers will be approached to visit the restaurant and write about their experience which can help to promote the brand. The coupons and coupon codes will be distributed with newspapers and social media promotions as well as handouts at various gas stations (Panagiotopoulos et al. 2015).
Sea-Sharp will primarily target two main customer profiles, tourists and fine diners either living in Mauritius or visiting there. Promotions for the brand will be done at tourism centers as well as on various media platforms to attract more customers (Hanson et al. 2016). Weekly and monthly meetings will be held to discuss the profits and revenues of the business and assess the company’s performance. Management approaches by similar businesses in other countries will also be referred to develop Sea-Sharp management policies (Tracey et al. 2015). If the business shows significant growth in the next 5 years, plans for further growth will also be made in which additional floor space will be added by building more aquariums and interconnecting them to the existing one (Harrington et al. 2014).
The restaurant is located near the coast of Mahebourg near the Ile aux Aigrettes islands that provides the customers a clear view of the coral bed and the marine life forms and coral habitat of the region.
Listed below are the facilities and equipments needed for Sea-Sharp
|
Facilities |
Waiting Area |
|
Lounge |
|
|
Buffet Area |
|
|
Kitchen |
|
|
Storage Area |
|
|
Parking Space |
|
|
Washroom |
|
|
Transportation |
|
|
Emergency Exit |
|
|
Security |
|
|
Equipments: |
Kitchen Utensils |
|
Cold Storage Units |
|
|
Serving Utensils |
|
|
Tables and Chairs |
|
|
Lights |
|
|
Sound equipments |
|
|
Interior decoration |
|
|
Life jackets and life raft |
|
|
Water pressure monitors |
|
|
Water temperature monitors |
|
|
Sensors on the aquarium walls |
|
|
Fire prevention equipments |
|
|
Surveillance systems |
|
|
Infrastructure |
2000 square feet aquarium |
|
Parking Space on land |
The HR approaches that will be used for the development and implementation of the HR policies includes developing understanding of the company values, analyzing existing policies used by other businesses, analyzing the internal and external influencers of the policy, identifying scope of development/improvement for the policy, referring with managers, stake holders and consultants and developing a full working policy (Knies et al. 2015).
The HR policies that has been developed for the staff at Sea-Sharp includes recruitment policies, compensation and benefit policies, labor management policies, employment practice policies, workplace diversity policy, Health, Safety and Security Policies, HR Research policy and, Training and Development policies (Kramar 2014).
The management team for Sea-Sharp will consist of the following personnel: Chief executive Officer with at least 10 years of experience will overlook the entire operations, Operations manager, Logistics manager, marketing manager, accounts manager and Facilities manager with experience of at least 5 years who will report to the CEO, 2 experienced Chef and 8 assistants to the chef. Other personnel reporting to the managers include sales personnel, waiters, bartenders, security personnel, receptionist and valet parking personnel (Nieves and Segarra-Ciprés 2015).
The CEO will be at the top of the management hierarchy to whom the middle management team will report to, and the executive personnel will be reporting to the management. The diagram below shows the company reporting structure.
The sources of funds for Sea-Sharp include personal investment of RS 1,500,000 from the owner of the company, investment from stakeholders of RS 500,000, loans from Development Bank of Mauritius of RS1,000,000 and from Investec Bank of RS 1,500,000. Loan from Investec Bank is used for planning and building the facility (underwater aquarium in which the restaurant facility was developed), the loan from Development Bank is used to develop the restaurant, while the amount injected by the owner is used for setting up the restaurant, hiring personnel and marketing for the business. The table below shows the funding sources:
|
Category |
Financing |
Amounts |
|
Equity Contributions: |
||
|
Personal Investment |
1,500,000 |
|
|
Stakeholder Investment |
500,000 |
|
|
Total Equity Financing |
2,000,000 |
|
|
Bank and Lenders |
Development Bank of Mauritius |
1,000,000 |
|
Investec Bank |
1,500,000 |
|
|
Total Debt Financing |
2,500,000 |
|
|
Total Financing |
4,500,000 |
It can be estimated that the business will be able to make an approximate turnover of Rs 450,000 per month. The estimated expenses of the company include Costs of electricity wages, transportation of guests and materials and other expenses. It can be estimated that Sea-Sharp can make approximately Rs 339,667 profit per month and thus the total funding for Rs 4,500,000 can be covered in 13 months time to reach the break-even point, and within 2 years of operation, the company can make a total profit of Rs 8,202,000. However it can be estimated that the business will increase by 5% every year.
The table below shows the break even analysis for the next 3 years of operation
|
Year 1 |
Year 2 |
Year 3 |
|
|
Monthly Net profit |
339,667 |
343,833 |
352,167 |
|
Annual Net Profit |
4,076,000 |
4,126,000 |
4,226,000 |
The graph below shows the yearly profits in the first three years:
Consumer behavior
The projections below demonstrate how Sea-Sharp plans to achieve break-even in the first year and make profits from the second year onwards:
|
Year 1 |
Year 2 |
Year 3 |
|
|
Sales |
6,000,000 |
6,060,000 |
6,200,000 |
|
Total Costs of Sales |
50,000 |
60,000 |
100,000 |
|
Gross Profit |
5,950,000 |
6,000,000 |
6,100,000 |
|
Expenses |
|||
|
Salaries |
1,200,000 |
1,200,000 |
1,200,000 |
|
Marketing Costs |
24,000 |
24,000 |
24,000 |
|
Operations Cost |
60,000 |
60,000 |
60,000 |
|
Depreciation |
0 |
0 |
0 |
|
Electricity |
240,000 |
240,000 |
240,000 |
|
Fuel |
120,000 |
120,000 |
120,000 |
|
Insurance |
50,000 |
50,000 |
50,000 |
|
Taxes |
25,000 |
25,000 |
25,000 |
|
Other Expenses |
60,000 |
60,000 |
60,000 |
|
Total Operating Expense |
1,779,000 |
1,779,000 |
1,779,000 |
|
Profits before interests and taxes |
4,171,000 |
4,221,000 |
4,321,000 |
|
EBITDA |
50,000 |
50,000 |
50,000 |
|
Interest Expense |
45,000 |
45,000 |
45,000 |
|
Taxes Incurred |
0 |
0 |
0 |
|
Total |
95,000 |
95,000 |
95,000 |
|
Net Profit |
4,076,000 |
4,126,000 |
4,226,000 |
The balance sheet below shows the growth of the business in the next three years:
|
Assets |
|||
|
Current Asset |
|||
|
Cash |
2,000,000 |
1,000,000 |
1,000,000 |
|
Other Current Asset |
0 |
0 |
0 |
|
Total Current Asset |
2,000,000 |
1,000,000 |
1,000,000 |
|
Long term Assets |
|||
|
Long term Asset |
2,500,000 |
2,500,000 |
2,500,000 |
|
Accumulated Depreciation |
0 |
0 |
0 |
|
Long Term Assets |
2,500,000 |
2,500,000 |
2,500,000 |
|
Total Assets |
4,500,000 |
3,500,000 |
3,500,000 |
|
Liabilities and capital |
|||
|
Current Liabilities |
0 |
0 |
0 |
|
Current Borrowing |
0 |
0 |
0 |
|
Long term Liabilities |
500,000 |
500,000 |
500,000 |
|
Accounts payable |
0 |
0 |
0 |
|
Total Liabilities |
500,000 |
500,000 |
500,000 |
|
Capital |
1,000,000 |
800,000 |
700,000 |
|
Retained Earnings |
500,000 |
700,000 |
1,200,000 |
|
Total Capital |
1,500,000 |
1,500,000 |
1,900,000 |
|
Total Liabilities and Capital |
2,000,000 |
2,000,000 |
2,400,000 |
The table below shows the projected flow of cash in the next 3 years:
|
Year 1 |
Year 2 |
Year 3 |
|
|
Cash from Operations |
|||
|
Cash Sales |
6,000,000 |
6,060,000 |
6,200,000 |
|
Subtotal cash from Operations |
0 |
0 |
0 |
|
Subtotal Cash |
6,000,000 |
6,060,000 |
6,200,000 |
|
Expenditures |
|||
|
Expenditures from Operations |
|||
|
Cash Spending |
2,000,000 |
1,900,000 |
2,200,000 |
|
Bill Payments |
500,000 |
400,000 |
450,000 |
|
Subtotal spent |
2,500,000 |
2,300,000 |
2,650,000 |
|
Additional cash Spent |
0 |
0 |
0 |
|
Sales Tax, VAT, Payout |
0 |
0 |
0 |
|
Recurring payment of current borrowing |
0 |
0 |
0 |
|
Long Term liabilities principal repayment |
300,000 |
300,000 |
300,000 |
|
Purchase other current asset |
0 |
0 |
0 |
|
Purchase long term assets |
0 |
0 |
0 |
|
Dividend |
0 |
0 |
0 |
|
Subtotal spent |
2,800,000 |
2,600,000 |
2,950,000 |
|
Net Cash Flow |
3,200,000 |
3,460,000 |
3,250,000 |
The table below shows the approximate milestones for the project:
|
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
|
|
Planning |
|||||
|
Permits |
|||||
|
Construction |
|||||
|
Setup |
|||||
|
Launch |
|||||
|
Break Even |
|||||
|
Profits |
|||||
|
Expansion |
References:
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