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Planning for an Arabic Restaurant

Abstract

This paper describes the planning for an Arabic Restaurant. We want to open an Arabic Restaurant called “Summit Arabic Food”. The Unique aspects of the restaurant will be: separate service for men by men and for women by women. It will be convenient for business and professional people. I will also be suited to Parties and celebrations. It will be an Arabic Restaurant with a seating capacity of 90 for each gender (180 totals). The service will be for three meals with additional service for coffee, tea, and snacks. We’d like to make enough money to support the family. We want to expand our interest in Arabic Food. We wish to serve the community and express our Arabic culture.

The restaurant would be in Riyadh, Saudi Arabia, on a famous street such as “Altahlyah St.” It would serve people from the malls and businesses in the area. The Restaurant would be specialized for same gender service to be very convenient for eating in a relaxed setting. It would be open on Holidays and pay extra to the holiday help. We analyzed the risks and costs and expected profits and found all of them to be manageable. The Total Opening cost will be $187,201 or 702,003.75 SR. Total Operating cost will be $75,260 or 276,375 SR per month. A conservative estimate of the monthly revenue indicates a monthly profit of $168,550 or 632,062.47 SR, based on the operating costs above. This supports the intended family income from the restaurant. We actually expect better performance than this.

Background

This section discusses different material pertains to background information for the project.

The purpose of the project

We want to open an Arabic Restaurant called “Summit Arabic Food”. The Unique aspects of the restaurant will be: separate service for men by men and for women by women. It will be convenient for business and professional people. I will also be suited to Parties and celebrations. It will be an Arabic Restaurant with a seating capacity of 90 for each gender (180 totals). The service will be for three meals with additional service for coffee, tea, and snacks.

Reasons for this project

We’d like to make enough money to support the family. We want to expand our interest in Arabic Food. We wish to serve the community and express our Arabic culture.

Restaurant owners

It is hoped that when all of the conditions are met that my husband and I (Salem and Aishah Almutiri) will own this new restaurant

Location of the Restaurant

We want to open the restaurant in Riyadh, Saudi Arabia, on a famous street such as “Altahlyah Street.” We could serve people from the malls and businesses in the area.

Target Opening Date

We’d like to open for business by the end of 2012.

Provided Attributes for Customers:

The Restaurant would be specialized for same gender service to be very convenient for eating in a relaxed setting. It would be open on Holidays and pay extra to the holiday help.

Requirements for Employees:

Service personnel will be well trained in preparing and serving traditional Arabic meals with frequent refresher training provided. The manager will visit our competitors frequently to stay current.

Problems & Issues

This section describes problems and issues divided under the following categories.

Identify and secure a location

The restaurant must be suited to the desired restaurant format. It must have separate eating areas for men and women. It must be convenient for the desired clientele that is business men and professionals. We must negotiate a lease with a clear termination clause.

Write and price a menu

The menu must have a clear composition for start up. It can be changed later as needed. The menu must standard enough so that ordering is convenient but different enough to make the restaurant appealing. It should be colourful and interesting.

Pricing is critical. The pricing must draw customers and also make a profit. We want to be in the middle of the prices of our competitors.

Investigate Regulations

We must identify all building codes and regulations. We will need to know all personnel and clientele safety regulations, especially regarding food preparation and storage conditions.

Identify Costs

We will need to know all the costs before we begin. This starts with the cost of opening. The building will need to be prepared to suit our needs, particularly the separate eating areas. We’ll need to price the equipment and furnishing. We’ll need to price advertising for both the staff and the opening. We’ll also need to price the necessary licenses and Permits. We also will need to know the continued Cost of operating the restaurant. This will include Lease, insurance, utilities, Staff (including the Chef), Food and Beverages.

Identify funding

We’ll need to prepare a business plan to support funding requests and assure payback. We may need to obtain a loan for the opening. This will probably come from a silent partner or limited partnership.

Risk Analysis

This section describes the risks we anticipate for the project and the precautions we will take to manage them.

Risks

Bad Location

We could get less traffic or less predictable traffic than expected. We might have a higher crime rate than expected. We might get a less affluent clientele than expected.

Staff Problems

The Chef or other key staff might leave.

Overestimated sales to investment ratio

We may spend too much on furniture & decorations. The operating expenses may go up, including Lease or rent, and food.

Trouble with hired alien’s documentation

Un-documented workers may cause problems with the authorities.

Disturbances at site

There may be disagreements between the staff and the customers which could hurt future business.

Catastrophic damage

Emergencies such as fire, bad weather could cause damage and closures with loss of business. Vandalism and theft could also cause damage.

Health problems

We could have sickened customers due to contaminated food.

Failure to manage bookkeeping

We could experience employee theft or unexpected taxes.

Expand facility beyond customer demand

We may expand capacity and not get the expected increased business.

Risk Management

Examine proposed Location

We’ll need to determine the expected flow of traffic and verify the traffic in the area for different days and months. We’ll need to minimize the threat of crime. We can do this by Verifying a low crime rate and by interviewing the police and the neighbours. We can also restrict operating hours to avoid late night traffic.

Establish client quality

We’ll need to observe dress of people and vehicles in the proposed area before committing to the location.

Avoid Staff problems

We’ want to offer the staff competitive salaries and incentives for staying. We should also give key personnel, such as the chef, some form of profit sharing.

Assure healthy sales to investment ratio

We must limit opening expenses, such as the costs of furniture and decorations.

Assure operating expenses are as stable as possible:

We must negotiate a good lease with a predicable rent. We should determine reliable food suppliers nearby to the site.

Avoid trouble with hired alien’s documentation

We’ll need to determine and follow all government regulations concerning foreign workers. We should not hire any undocumented workers.

Minimize Disturbances at site

We will establish good relations with all staff, and promote a culture of respect. We’ll Train the staff to handle difficult customers with role-playing. The management should set the example in all interactions with the staff.

Mitigate risk of catastrophic damage:

We should carry sufficient catastrophe insurance to cover reasonable anticipated damage.

Avoid Health problems:

We should get proper health certification from the appropriate agencies. We’ll need to learn and observe all of the relevant health regulations. We will assure that the staff is properly trained regarding these regulations.

Manage bookkeeping:

We will hire a good accountant to check the books. We’ll inform the staff that cheating will result in dismissal.

Avoid risky Expansion of facility

We will assure that any expansion plan is well justified by a carefully revised business plan.

Costs

In this section we will describe opening and continuing costs.

Opening costs

We’ll need to pay fees for various licenses. We’ll need to prepare the building. We will need to negotiate a good lease and pay the first month’s rent and deposit. The estimated monthly cost for a typical property (1500 sq. ft at $14) would be $21,000 per month. We’ll need to buy equipment and furnishings.

Table 1 - Opening Cost

Item

$US

SR

Rate

$1

3.75

Building preparation(separate eating areas)

$30,060

112,725.00

licenses and Permits (at .2% of cost)

$60

225.00

Contractors for modifications & installations

$30,000

112,500.00

First month and deposit

$42,000

157,500.00

Equipment

$40,500

 151,875.00

Kitchen

$16,800

63,000.00

Stove

$6,600

24,750.00

Sinks

$1,500

5,625.00

Refrigeration

$2,000

7,500.00

Dishwasher

$2,000

7,500.00

Preparation tables

$700

2,625.00

Cookware

$5,000

18,750.00

Dry storage area

$1,000

3,750.00

Dining room

$20,800

78,000.00

Chairs & Tables (2x90=180 seats)

$18,000

67,500.00

Decoration (budget)

$500

1,875.00

Wait stations

$800

3,000.00

Beverage Dispensers

$1,500

5,625.00

Reception

$1,900

7,125.00

Front desk

$400

1,500.00

Waiting area furniture

$1,000

3,750.00

2 Cash Registers

$500

1,875.00

Advertising

$1,000

3,750.00

For staff

$500

1,875.00

For opening.

$500

1,875.00

First month operating cost

$74,641

279,903.75

All Opening costs

$187,201

702,003.75

Red=Group total; Blue = Sub-Total

Total Opening cost will be $187,201or 702,003.75 SR

Operating costs

This will include Lease, insurance (based on 10% annually for investment), utilities, Staff (including the Chef), Food and Beverages.

Table 2 - Operating Cost

Item

$US

SR

Lease

$21,000

78,750.00

Interest

$1560.01

5850.00

Insurance

$1,800.00

6,750.00

Utilities

$900.00

3,375.00

Electricity

$500.00

1,875.00

Gas

$200.00

750.00

Water

$200.00

750.00

Staff – Salaries

$10,000.00

37,500.00

1 Chef

$1,500.00

5,625.00

3 Kitchen helpers

$300.00

1,125.00

4 Servers

$400.00

1,500.00

2 buss people

$300.00

1,125.00

2 Receptionists

$500.00

1,875.00

Staff Food & Lodging*

$7,000.00

26,250.00

Food & Beverages

$24,000.00

90,000.00

Non Food Consumables

$16,000.00

60,000.00

Total cost

$75,260.00

$276,375.00

Red=Group total

*Compensation will include food and lodging

Total Operating cost will be $75,260 or 276,375 SR per month.

Project Profit

A conservative estimate of the monthly revenue indicates a monthly profit of $168,550 or 632,062.47 SR, based on the operating costs above. We actually expect better performance than this.

Table 3 - Meal Revenue

Item

$US

SR

Meal

$30

112.50

People

$90

337.50

Meals

$3

11.25

Days

$7

26.25

Weeks rev

$56,700

212,625.00

Months rev

$243,810

914,287.50

Months profit

$168,550

632,062.47

Summary

We have investigated opening an Arabic Restaurant called “Summit Arabic Food”. The Unique aspects of the restaurant: separate service for men by men and for women by women slightly affected the opening cost. It is to be an Arabic Restaurant with a seating capacity of 90 for each gender (180 totals). The intent was to make enough money to support the family and this seems justified. We intended to serve the community and express our Arabic culture.

The restaurant would be in Riyadh, Saudi Arabia, on a famous street such as “Altahlyah St.” It would serve people from the malls and businesses in the area. The Restaurant would be specialized for same gender service to be very convenient for eating in a relaxed setting. It would be open on Holidays and pay extra to the holiday help. We analyzed the risks and costs and expected profits and found all of them to be manageable. The Total Opening cost will be $187,201 or 702,003.75 SR. Total Operating cost will be $75,260 or 276,375 SR per month. A conservative estimate of the monthly revenue indicates a monthly profit of $168,550 or 632,062.47 SR, based on the operating costs above. We actually expect better performance than this.

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