The sales budget is developed with assumptions that there will be variations in sitting capacity occupancy in all the four quarters. It is developed by multiplying seating capacity occupancy with no. of days in the quarter, unit price (15 pounds),no. of shifts (4) and total seating capacity (100) as given below:-
The other direct costs is developed with an assumptions that 100000 pound to start the business and it will be arranged by our finance department from the bank in the ratio of debt: equity 50:50 i.e. 50 percent will be from bank and 50% from the promoters. The interest rate will be 5% per year i.e. 1.25% per quarter. The leasing expense will be 10000 pound per month and the total overhead expense will be 2% of total sales. The tax rate used is 30% and depreciation on initial investment will be using straight line method for 10 years. Besides we also assume all payments will be made on cash and all collections will be made instantly
No business or BBQ restaurants offering Korean Buffet in London
The analysis clearly shows that there is huge opportunity to start and get good return in starting a BBQ restaurant in London. The NPV comes out as positive which means restaurant is going to be profitable in near future and presenting a good business opportunity for KIT. Hence, it is recommended to start and grow this business in London using funds from banks and promoters. Besides, there will be no credit and also all purchased will be made on cash basis to get maximum discounts and to improve the return.
The various contributed by business to the environments are as follows:-
Our restaurants will be one of its kinds and will use green initiatives to support its operations. It means it recycles water and other things to protect environment.
It takes parts in CSR activities so as to support the development of nearby areas.
The potential to grow business is Good because of following reasons:-
Industry is growing at rate of 15% as mentioned in the beginning of report
The profitability is good in first year showing the good return which can be used for future development