Business Plan Marcha s Brooklyn

Transcription

1 Business Plan Marcha s Brooklyn

2 Table of Contents I. EXECUTIVE SUMMARY... 2 II. BUSINESS OVERVIEW... 3 III. COMPANY AND OWNERSHIP STRUCTURE... 5 IV. PRODUCT DESCRIPTION... 6 V. MANAGEMENT STRUCTURE... 7 VI. OPERATIONS... 8 BUSINESS OPERATIONS... 8 SUPPLIERS... 8 LOCATION & OUTLAY... 8 CAPITAL EQUIPMENT & START-UP REQUIREMENTS VII. STAFFING VIII. MARKET ANALYSIS TARGET SEGMENTS PRICING STRATEGY SALES & PROMOTION COMPETITORS COMPETITIVE EDGE SWOT ANALYSIS IX. FINANCIAL ANALYSIS START-UP COST REQUIREMENTS PROFIT & LOSS FORECAST FOR YEARS NOTE: This business plan sample was prepared by Greg Newton. Although based on a real plan, company name, financials and other pertinent information has been modified for client privacy and protection. Any similarities with actual companies are purely coincidental.

3 I. Executive Summary Introduction Marchas Brooklyn is a Mexican, Tex-Mex style restaurant that sells fresh tacos made to order from scratch. Its combination of creative Tex-Mex dishes, authentic tastes and popular margaritas brings a unique flavor to the Brooklyn marketplace, and has built up a loyal following over the past 5+ years since opening in September The business generates approximately $20,000 per month, and is owned and operated by Mr. Grant Brooks and Mr. Joseph Smith. Grant owns Marcha s 5th Avenue and Joseph owns The Restaurant Shop in Park Slope, and together they have founded and managed 10 different start-up restaurants throughout Brooklyn. Grant and Joseph plan to bring their restaurant experience, cash flow management skills and knowledge of the local market to open 3 new Marcha s locations in Brooklyn over the upcoming 5 years, and share its Marcha s Mexican, Tex-Mex flavors with NYC customers. The first proposed location opening is at 123 Vermont Place in Brooklyn, NY. The Market Mexican food is the 3rd most popular menu type in the USA, representing 8% of the total national restaurant landscape. The industry is still in the growth phase of its life cycle, and is in its sixth consecutive year of real growth. Over years the Mexican Restaurants industry has grown by 3.1%, surpassing estimated annualized GDP growth during this period. New York State has a booming restaurant industry, where it generates $35.8 billion annually. Marchas target market is made up primarily of (a) neighborhood locals, (b) young, hipster transplants and (c) NYC Texans seeking good queso and Tex-Mex flavors. Brooklyn is home to a wide range of traditional Mexican restaurants and food trucks, and Marchas stands out by offering unique Tex-Mex flavors together with its high quality Mexican ingredients and delicious fresh tastes. Management sees ample demand and profitable opportunity to expand Marchas into new locations throughout Brooklyn. Financial Considerations The company will require estimated $1 million to open 3 new Marchas locations over the next 5 years. Projected start-up costs for the first Vermont Ave location is $213,500. In return, the business is expected to generate sales of $1,300,000 in its first year of operations. SALES SUMMARY Year 1 Year 2 Year 3 Year 4 Year 5 Revenue $1,300,000 $1,339,000 $1,379,170 $1,420,545 $1,463,161 Gross Profit $772,085 $795,247 $819,105 $843,678 $868,988 Net Income $129,545 $184,138 $205,144 $226,780 $249,064 This target is seen as attainable through a key location and management s experience opening similar profitable restaurant start-ups. This business plan will discuss the tactics and strategies to generate the revenues as stated, and the implementation to successfully become a profitable Mexican, Tex-Mex chain in the Brooklyn marketplace. 2

4 II. Business Overview Business Overview Marchas Brooklyn ( is a Mexican, Tex-Mex style restaurant that sells fresh tacos made to order from scratch. The combination of creative Tex-Mex dishes, authentic tastes and popular margaritas gives a unique flavor to the Brooklyn marketplace and has allowed the taco restaurant to successfully build up a loyal following customer base. Marchas is located at 401 Washington Ave. Brooklyn, New York, and has been in operations for over 5 years, since opening in September of The taco restaurant is co-owned and managed by native Brooklynites Mr. Grant Brooks and Mr. Joseph Smith, who bring a high level of restaurant experience to the company. Grant owns Marcha s 5th Avenue and Joseph owns The Restaurant Shop in Park Slope, and together they have founded and managed 10 different start-up restaurants throughout Brooklyn. The Marchas Concept The taco concept comes from Joseph's upbringing in Texas, as does the name of the restaurant. Some of the recipes are traditional, while others are original creations based on foods Joseph and Grant themselves would love to eat. They developed their love of Mexican food over the years through dozens of trips to Mexico, and by enjoying a variety of street food and tacos growing up. The restaurant has been well received both by locals born and bred in the neighborhood and newcomers alike. The restaurant generates approximately $25,000 each month in revenue. In the warmer weather the sidewalk cafe adds 30-40% more business. Marchas fills a gap that exists in the Brooklyn food and beverage market, and management sees an excellent opportunity to expand 3 new Marchas locations over the next 5 years. The first proposed location opening is at 123 Vermont Place in Brooklyn, NY. Commercial Viability of the Business Driven by an improving economy, restaurant industry sales are expected to have hit an estimated record high of $709.2 billion in 2015, which represents the sixth consecutive year of real growth in restaurant sales 1. Mexican Food Restaurants: A Growing Market Mexican food is the 3rd most popular menu type in the USA, representing 8 percent of the total national restaurant landscape 2. According to IBISWorld, the US Mexican Restaurants industry is in the growth phase of its life cycle, where it generated $38 billion in 2015 and saw 2.9% positive Restaurant Industry Forecast by the National Restaurant Association, The Mexican Restaurant Industry Landscape by CHD,

5 growth between the years The industry has benefitted from (a) an increased acceptance of Mexican cuisine in the mainstream American palate, (b) increasing immigration populations and (c) domestic adaptations of Mexican food, such as Tex-Mex cuisine. As a result of these major trends, industry revenue is expected to continue growing during the years to Industry Growth Projected Over the five years 2015 to 2020, industry value added, which measures an industry's contribution to US GDP, is forecast to grow at an average rate of 3.1% per year, compared with estimated annualized GDP growth of 2.5% over the same period. Thus, the US Mexican Food Restaurants industry is exhibiting consistent, long-term growth, at a faster rate than the economy as a whole. Likewise, the number of industry establishments is expected to grow at an average rate of 3.0% per year over the five years to The industry is comfortably outpacing the broader foodservice sector 3. This market research combined with Marcha s consistent sales growth over the past 5 years demonstrates a strong commercial viability for additional Marcha s Brooklyn locations. Daily Sales The average purchase per person at Marchas is $13.75, where the weekend is the busiest time of the week for sales. Daily Sales Breakdown $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Mon Tue Wed Thurs Fri Sat Sun Management Marcha s Brooklyn is owned and managed by Mr. Joseph Smith and Mr. Grant Brooks, who combined have opened 10 restaurants throughout their careers. 3 Mexican Restaurants in the US: Market Research Report by IBISWorld, April

6 Joseph Smith Owner-Manager Joseph has worked in the food and beverage industry since the age of 15, where he has managed restaurants ranging from high-end Mediterranean to a raw oyster and fried fish shack. He worked as the Associate Food and Beverage Director for InterContinental Hotel Group, and has owned and operated four successful independent restaurant concepts in the Brookyn marketplace - all of which are in business today. Grant Brooks Owner-Manager Grant opened his first French pastry shop with his wife at the time in 1992, which grew to two additional locations and a production site. In 2000 they opened the bar The Restaurant Shop, which he later took over fully owning and managing. Since 2008 Grant has worked with Joseph to open (a) The Restaurant Shop which receives accolades and enters NY magazine competitions each year, (b) Marchas Restaurant in 2010 and (c) NYC slice place ABC Pizzeria in As business partners Joseph and Grant have an excellent working relationship and have worked together in several different restaurant projects. Duties are split based on schedules and a work dynamic for maximum restaurant productivity. Joseph and Grant will bring a high level of management knowledge, experience and cohesiveness the new Marcha Brooklyn locations. III. Company and Ownership Structure Business Structure The company is Marcha s Restaurant Inc. DBA Marchas Brooklyn, and operates as an S corporation. Percent Ownership The company is co-owned 50% by Grant Brooks and 50% by Joseph Smith. 5

7 IV. Product Description Tacos & Queso Marchas sells different tacos ($ ) at any given time: 2 chicken, 3 pork, 3 beef, 2 seafood, and 3 vegetarian taco options are available. Marchas also specializes in quality queso - a Tex-Mex hot cheese dip served alongside chips, guacamole and salsa - that is also used to top the Marchas ($7.00). Although queso is very rare in New York, it is ubiquitous in Texas and loved by Texans as well as New Yorkers who get their opportunity to try it. The menu also includes very popular healthy option: our cup of Black Beans and Collared Greens. Fresh Juice Margaritas & Food Prepared by Hand Marchas mix of creative new Tex-Mex items and authentic Mexican recipes is unique, especially to this area of the country. The joint offers properly prepared fresh juice margaritas and corn tortillas handmade from masa ground onsite at Tortilleria Nixtamal in Corona, Queens, and delivered fresh daily. Housemade flour tortillas are finished on the griddle throughout service, and Marchas offers next-level ballpark Marchas that are seriously addictive. 6

8 Breakfast Tacos - a Texan Staple Marchas offers breakfast tacos ($3.50) for brunch on the weekends, which is yet another Texas staple that is very rare outside of the state. It is essentially an omelette with your choice of several different toppings or mix-ins served on a fresh housemade flour tortilla and served with fresh salsa verde. A serious favorite for Texans and curious Brooklynites who give it a try. V. Management Structure Organizational Chart Marcha s Restaurant operates under the following organizational and pay structure: Co-owners Grant and Joseph Manager, Sara Fernandez - $550 per week salary (plus tips when working on the floor) Assistant Manager, Cat Fernandez - $11 per hour (plus tips when working on the floor) Kitchen Manager, Mike Gomez - $650 per week salary Cooks/FOH - Several cooks at $11-$13 per hour. Several FOH (front of house) at $10 per hour. Table 1 - Organizational Chart Owners (Grant & Joseph) Manager Sara Fernandez Assist. Manager Cat Fernandez Kitchen Manager Cooks/FOH 7

9 Marcha s Brooklyn currently employees 15 staff. Upon expansion, each new location will grow to between staff members by Year 1 of operations (variable based on sales levels and shift scheduling). VI. Operations Business Operations Marcha s Brooklyn operates as a typical restaurant business operation, offering table service, takeout and delivery services. Staff maintains a continual workflow to match the customer volume - from greeting/taking customer orders, to cooking and preparing dishes, to payment and table cleanup. Everything is done to maximize pleasure of experience for the customer, and create a consistent experience of delicious food, cleanliness and professionalism, with positive and friendly staff interactions. Food ingredients are bought locally, purchased for projected levels of demand. Management works to ensure the business runs fluidly with excellent cash flow management. Suppliers Management purchases all food fresh and sourced from local market to ensure quality and taste of dishes, while simultaneously supporting local growers and reducing overhead costs. Location & Outlay Current Location Marcha s Brooklyn is located at 401 Washington Ave. in Brooklyn, NY, near the Brooklyn S line shuttle. The business occupies: 450 sq feet. restaurant space first floor 400 sq ft of garage storage first floor 450 sq ft basement space The restaurant draws customers from the following surrounding neighborhoods: Crown Heights, Prospect Heights, Bed Stuy and Clinton Hill. 8

10 Proposed New Location Management intends to open 3 new Marcha s Brooklyn locations over the next 5 years to 2021 with a focus on the following neighborhoods: Downtown Brooklyn, Park Slope, Fort Green, Clinton Hill, Bed Stuy and other hip yet underserved Brooklyn neighborhoods as far north as Bushwick, and south to Windsor Terrace and Kensington. Management is planning its first new location at 123 Vermont Place: 9

11 Hours of Operations Marcha s Brooklyn is open the following hours: Mon Friday 4-11pm Sat 11am-11pm Sun 11am-10pm Hours for future locations will be based on neighborhood, where Marchas menu is flexible in that it can equally satisfy breakfast, lunch and dinner. 10

12 Capital Equipment & Start-Up Requirements Capital equipment required for the new opening location will include: Kitchen equipment for $20,000, POS (Point of Sale) equipment for $20,000 and new table and chairs for $5,000. Additional required equipment includes a tortilla press, a deep cleaner and a margarita machine. Management projects total start-up cost requirements to be $213,500, with the most significant costs being property lease payments, cash on hand requirements, start-up inventory and equipment purchases. Management is seeking funding to finance start-up expenses for this opening restaurant branch. Please see Section VIII for a list of all start-up expenses for the opening 387 Vermont Ave. location. VII. Staffing Each new location will require between hired staff (full-time and part-time combination) for the following roles: manager, assistant manager, kitchen manager, cooks, and FOH/BOH staff (bussers/cleanup, servers/cashier). All staff members will be hired before Months 2-3 of operations, and personnel costs are projected at $364,000 per year. Annual Personnel Plan Managers 85,000 Assistant Manager 45,000 Kitchen Manager 40,000 Cooks 62,000 Bussers/Cleanup 50,000 Servers 42,000 Cashiers 40,000 Total People Total Payroll $364,000 11

13 VIII. Market Analysis Marcha s Brooklyn s primary target markets are: Young, hip, artsy transplants. Neigborhood locals, predominantly African-American (young to middle-aged). NYC Texans seeking good queso and Tex-Mex flavors. Target Segments Management segments its customers evenly into 50% locals and 50% transplants. Additionally, 75% of customers dine in, whereas the remaining 25% order take-out or delivery. Customer Segmentation NYC Texans, 20% Hipster Transplants, 30% Neighborhood Locals, 50% Pricing Strategy Management will continue with its penetration pricing strategy, where the restaurant will offer its high quality food at a slightly lower price than neighboring competitors. This will encourage customers new to Marcha s to trial the food and spread word-of-mouth. Sales & Promotion Marcha s Brooklyn currently implements a successful social media strategy through Facebook and Instagram. This allows the restaurant to communicate offers, showcase its menu items, spread word of mouth and promote timely deals. Marcha s also offers simple dollar off discounts such as dollar-off tacos and beers for happy hour from 4-7pm Monday to Friday and dollar-off two tacos and beans. 12

14 Competitors Major Players The 5 largest players in the US Mexican restaurant industry are: Chipotle Mexican Grill, Del Taco, Qdoba, Taco Bell and Moe s Southwest Grill. These chains make up approximately 26% of market share 4 and have large brand awareness and convenient locations throughout the country, however they fall short in terms of quality and authentic Mexican food in the eyes of the true Mexican and Tex-Mex food lover. Local Competition Management considers its top 5 direct competitors to be: Calexico, Dos Toros, Tacombi, Kimchi Grill and Oaxaca. 1. Calexico (Calexico.net) Founded originally by three brothers from Calexico, California, today Calexico has 4 locations throughout Brooklyn and offers a wide range of traditional Mexican foods and dishes. Its food trucks and restaurant locations has been touted for its delicious tacos and burritos throughout NYC. 2. Dos Toros ( - Similarly to Calexico, Dos Toros was founded by two brothers who came over from California to bring true Mexican flavors to NYC. Touting fresh ingredients and quality meats, the chain has 10 locations throughout New York with 2 locations in Brooklyn. 3. Tacombi ( Founded in 2005 in Yucatan in Mexico, Tacombi began from selling tacos out of a VW bus, and brought its Mexican flavors to NYC. The restaurant aims to deliver Mexican hospitality through quality food and service, including made to order Mexican juices and foods made from scratch. Tacombi has locations in Nolita, Flatiron, Montauk and Bleeker Street. 4. Kimchi Grill ( Kimchi Grill has a popular Kimchi Taco arm of the business and Taco Truck that drives throughout Brooklyn and other parts of NY selling unique Korean-style tacos, big belly burritos and bowls. The Taco Truck is a popular appeal for the young hipster crowd, and NY taco lovers. 5. Oaxaca ( - Oaxaca aims to offer the Taste of Mexico by bringing traditional Mexican fare inspired by the flavors and ingredients of Oaxaca, Mexico. Like Marcha s, the restaurant sources its ingredients from local, organic and sustainable sources through its 12 locations throughout New York (with a 13 th opening soon in the upper East Side). 4 The Mexican Restaurant Industry Landscape by CHD,

15 Competitive Edge Marchas competitive edge lies in its combination of (a) high quality ingredients - flavorful food made from scratch and fresh-squeezed juice margaritas, (b) consistent, quality service - with smiling staff in a hip atmosphere and large sidewalk café and (c) delicious Texas-style Tex-Mex favorites not available in other NYC Mexican restaurants. Management additionally stands behind fresh locally sourced ingredients and offers a consistently great experience - through prompt and friendly service and consistently delicious food. This combination has resonated with customers to create a strong, loyal base, and management aims to replicate this successful formula to its new opening locations. SWOT Analysis Strengths Strong management with track record of success with start-up restaurants in the local market. Management can leverage its newness factor as a new entrant to the neighborhood (with second location), and generate interest, curiosity and excitement. Focus on food made with fresh local ingredients from sustainable sources. Existing loyal customer base. Weaknesses Higher food cost. Newer business than several competitors, weaker brand recognition. Opportunities Growing popularity of Mexican dishes and reality shows such as MasterChef, Man v. Food, Kitchen Nightmares, Hell s Kitchen and Top Chef is increasing both customer awareness and appreciation for delicious, quality foods as Marchas offers. Great expansion opportunities both in NYC and other parts of the US. Mexican and Texan communities throughout Brooklyn (and the US). Threats Intense competition (e.g. entrant of popular authentic Texan restaurant chain). Rise in local food costs A worsened US economic state could have a negative impact on disposable income levels, economic outlook and spending habits of Americans. Any of which could negatively affect company profits. 14

16 IX. Financial Analysis Start-up Cost Requirements The following are the required start-up costs for the business. Management projects to require $1 million in funding to open the next 3 locations. Startup Requirements Key Money (total $135,000) 75,000 1st, Last and security 19,500 Kitchen Equipment 20,000 Tortilla Press 3,500 Deep Clean 1,500 POS 20,000 Margarita Machine 3,000 Paint 5,000 Wall Decoration/Maps 5,000 New Lights 5,000 Table/Chairs 5,000 Liquor Inventory 3,000 Food Inventory 7,000 Lawyer Fees 4,000 Liquor License 7,000 One Month Payroll Reserve 30,000 TOTAL REQUIREMENTS $213,500 Funding Allocation Breakdown Inventory, $10,000 Reno/Furnishin g, $20,000 Other, $41,000 Equipment, $48,000 Lease, $94,500 15

17 Profit & Loss Forecast for Years 1-5 The following is the 5-year projected profit and loss for the opening Vermont Ave Marcha s Brooklyn location. 1st year 2nd year 3rd year 4th year 5th year Sales Revenues** 1,300,000 1,339,000 1,379,170 1,420,545 1,463,161 Minus: Sales Tax 8.629% -112, , , , ,256 1,187,823 1,223,458 1,260,161 1,297,966 1,336,905 Minus: Cost of Goods Sold 35.0% -415, , , , ,917 GROSS REVENUE $772,085 $795,247 $819,105 $843,678 $868,988 Operating Expenses: Income and expense for Vermont Place Marcha's Payroll 364, , , , ,000 Rent ($5800 3% increases each yr) 52,200 80,340 82,750 85,232 87,790 Real Estate Taxes 1,000 1,000 1,000 1,000 1,000 Telephone/internet 3,200 3,200 3,200 3,200 3,200 Gas, electric, garbage, pest (3% increase per year) 42,000 42,000 42,000 42,000 42,000 Licenses, permits, fees and fines 14,000 14,000 14,000 14,000 14,000 Credit Card Fees (1.1% of total rev) 14,300 14,729 15,171 15,626 16,095 Payroll Taxes (6% of payroll) 21,840 21,840 21,840 21,840 21,840 Payroll Service 4,000 4,000 4,000 4,000 4,000 Supplies (bar, kitchen, take out and office) 32,000 32,000 32,000 32,000 32,000 Legal and Accounting Fees 5,000 5,000 5,000 5,000 5,000 Insurance: general, liquor liabilty, workers comp 14,000 14,000 14,000 14,000 14,000 Repairs/upkeep 10,000 10,000 10,000 10,000 10,000 Key Money Payback 1st year only 60, Other: Misc. 5,000 5,000 5,000 5,000 5,000 Operating Expenses $642,540 $611,109 $613,961 $616,898 $619,925 Net Profit or Loss $129,545 $184,138 $205,144 $226,780 $249,064 Net Income as a % of Sales 9.96% 13.75% 14.87% 15.96% 17.02% Total Net Profit/Loss: 5 years $994,671 Weekly Revenue Breakdown Sales Payroll Total 28% $25,000 $7,000 **3% increase in revenue per year 16

18 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Annual Sales Performance $