Indira School of Business Studies

Global Management Program

PGDM-IB
Batch 2012-14

Business Plan On Setting up theRestaurant (Western Islands )

Submitted BY: Prateek Agarkar PGDM-IB ROLL No.:- D-32

Contents
Executive Summary ............................................................................................................ 4 Company Name: ............................................................................................................. 4 Key Personnel: ................................................................................................................ 4 Brief Description:............................................................................................................ 4 Services ........................................................................................................................... 4 Customers ....................................................................................................................... 4 The Menu ........................................................................................................................ 4 Restaurant Location ........................................................................................................ 5 Vision And Mission Statement ....................................................................................... 5 Management Summary ....................................................................................................... 6 Management Team.......................................................................................................... 6 Managing Partner Responsibilities ................................................................................. 6 Personnel Plan................................................................................................................. 7 Restaurant Operations: .................................................................................................... 7 Business and Industry Profile. ............................................................................................ 8 Market Demographics ..................................................................................................... 8 SWOT Analysis. ............................................................................................................. 9 Weaknesses ..................................................................................................................... 9 Opportunities................................................................................................................... 9 Marketing and Sales strategy .............................................................................................. 9 In-Restaurant Marketing ............................................................................................... 10 Sales strategy ................................................................................................................ 11 Sales Forecast .......................................................................................................... 12 Critical Job Description Summary ................................................................................ 13 Web Plan Summary ...................................................................................................... 14 Future Personnel Plan(After 5 yrs) ............................................................................... 15 FINANCIAL PLAN.......................................................................................................... 16 Start up Costs ................................................................................................................ 17 Investment Opportunities .............................................................................................. 18 Risk Analysis/Mitigation .............................................................................................. 18 Balance Sheet .................................................................................................................... 22 Expansion, Payback & Exit Strategy ................................................................................ 22 2

Expansion as a Business Goal....................................................................................... 22 Exit Strategy to Retire the Business.................................................................................. 23

Executive Summary
Company Name: Western Islands F.C road Pune Key Personnel: Business Manager General Manager Assistant Manager

Brief Description: A Western Islands is a West Indian themed restaurant that will be located in the Northeast quadrant of the City of Anytown. The restaurant will focus on West Indian cuisine, island atmosphere, background music (reggae and calypso) and traditional West Indian hospitality. The locWestern Islands on of the restaurant will offer patrons "something different" in an area swamped with Italian, American, and Mexican restaurants. Services Ethnic recipes will be used to provide the customers with a diverse, unusual menu. Chef Mario will also be emphasizing healthy dishes, recognizing the trend within the restaurant industry for the demand for healthy cuisine. Customers Western Islands believes that the market can be segmented into four distinct groups that it aims to target. The first group is the lonely rich which number 400,000 people. The second group that will be targeted is young happy customers which are growing at an annual rate of 8% with 150,000 potential customers. The third group is rich hippies who naturally desire organic foods as well as ethnic cuisine. The last group which is particularly interested in the menu's healthy offerings is dieting women which number 350,000 in the Portland area. The Menu The menu is going to be extremely simple but changing every day. We will keep a small group of constants on the menu and then feature a chef's recommendWestern Islands on that we plan to have 85% of meals ordering. This will help us to reduce waste and plan ingredients and purchasing. 4

Restaurant Location The market has been carefully selected and tested for the necessary demographics and retail traffic necessary to meet the goals laid down for profitability. The busy Midtown commercial/residential location has been chosen based upon a successful demographic model and a traffic count of more than 33,000 cars daily. Western Islands is unique to Midtown Pune. The restaurant features 3 venues in one (a concept called Multi-Branding'): A Tapas Lounge, Cosmopolitan Bar, and Full Service Dining. This concept offers customers variety, offering multiple dining and entertainment options within a single establishment. The spatial and menu divisions will broaden our appeal and provide our customers with a different experience on each visit. Vision And Mission Statement Vision. The objectives for A Western Islands for the first five years of operWestern Islands on is: a. Grow two units within the first five years. b. Keep food costs below 35% of revenue. c. Keep employee labor costs between 16-18% of revenue. d. Maintain tight controls on cost and operWestern Islands ons through partnership management. Mission. A Western Islands will strive to be the premier specialty restaurant in the Northeast Heights of Anytown, AnyState. We want our guest to have the total experience of the Caribbean Islands, not only with a great meal, but also be provided with the atmosphere. We will be doing unique things, such as Island style brunches, and West Indian Festival and Holiday celebrWestern Islands ons. Our focus will be concentrate on four major areas: We will serve quality food for a competitive price, with a large selection of West Indian Cuisine. Our customer service support will show that we want to be the restaurant of choice for families and singles, young and old, male and female. Employee welfare will be equally important to our success. We want our employees to feel as a part of the success of A Western Islands Happy employees make happy guests. We will combine menu variety, atmosphere, ambiance, and friendly service to customers. 5

Management Summary
The strength of our management staff positions us for success. We have assembled a team that embraces different disciplines, accomplished professionals with expertise in all areas of the business, including marketing and restaurant management. The owners, Prateek Agarkar (Managing Partner) and Mohit Maru (Executive Chef), have considerable experience in the restaurant industry. In Year 2, we will hire a General Manager to handle the day-to-day Restaurant management. This will assist Western Islands 's Restaurant & Lounge to grow even further. You can't build investor confidence based on what you will do, but you can inspire confidence based on what you have done. Attached is the portfolio of past success. This Western Islands Management team has deep roots in the restaurant segment, and have the practical experience to make this venture another great success. Management Team Western Islands Restaurant & Lounge, with more than 48 years of experience between the key officers, understands the importance of a strong management team. The strength of our management staff positions us for success. Day to day operational management will be conducted by Prateek Agarkar and Mohit Maru, as hands on managers. They will advised and supported by their Advisory Board. Managing Partner Responsibilities In addition to the management of day to day operations, both managers, as principals within the company, will oversee menu development, purchasing, portioning, pricing and inventory control, including approval of all financial obligations of the company. They will plan, develop, and establish customer service policies and objectives, and write, explain, and enforce an employee's manual for all employee-related policies. Responsibilities for hiring and firing employees lie solely with the two operations managers, and any decisions in these areas will be made jointly. They will: Manage working capital, including receivables, inventory, cash and marketable securities. Perform financial forecasting, including capital budgeting, cash flow analysis, pro forma financial statements, and external financing requirements.

Prepare financial analyses of operations for guiding management, including reports which outline the company's income, expenses, and earnings. Direct preparation of budgets and financial forecasts and arrange for audits of company's accounts.

Personnel Plan We believe the personnel plan is in good proportion to the size of the restaurant and projected revenues. The staff will include 13 full-time employees and 8 part-time employees, who will work a total of 754 manhours per week and generate an average monthly gross payroll of Rs27,308 for the first year in business. The estimated gross annual payroll of Rs399,588 (including Partner Salaries) is 37% of total sales. Wage salaries for service personnel (waitstaff, busboys, bartenders) do not include anticipated tips. With average tipping rates for the Atlanta, Georgia area, and our menu prices, service employees should average at least twice the minimum wage in any given shift. Skilled waitresses and bartenders on weekends and evenings will make substantially more.

Kitchen: The Executive Chef will be assisted by:

An Assistant Chef from a national search (1). A Sou chef with considerable experience in different restaurants (1). Cooks that work directly with Peter or the sous chef (2). Prep cooks/dishwasher (2). People cleaning the restaurant (2). Restaurant Operations: Prateek Agarkarwill manage the Financial Management, Bookkeeping, PR/Media Advertising, and Investor Services. Prateek Agarkarwill also manage the daily Restaurant Operations. Mohit Maru will be the Restaurant Manager. He will be the primary responsible for daily Restaurant Operations, taking care of Wait and Bar Staff. Peter will also take lead as the Executive Chef working with the Head Chef. To help Peter, he will have servers that will work as captains' (these people have experience in managing, waiting tables and bartending) and take care of service and make sure the restaurant is in excellent shape (2). 7

Servers that work part time (4). Full-time bartender (1). Part-time bartender (1). Full-time busboy (2). Part-time busboy (1).

Business and Industry Profile.

Stage of Growth. A Western Islands is a start-up venture. Although it is not an ongoing operWestern Islands on, the three partners have extensive experience in West Indian Food Service (see key personnel). The selected locWestern Islands on for the restaurant is located in a high traffic, shopping area of Anytown. This locWestern Islands on will assist in the success of the venture.

Industry Analysis. The current restaurant industry in the Anytown market is strong. According to recent estimates, there are 9 major restaurants started each year, with a very high success rate. Restaurants with nWestern Islands onal affiliWestern Islands on (Olive Garden, Landrys, etc.) dominate the American food and more popular cuisine markets (Italian, French, etc.) and small to medium, locally owned enterprises, dominate the Mexican food markets. Market Demographics: The target market for A Western Islands includes families with disposable incomes above the area mean. The target market demographic breakdown includes the following:

a. Total PopulWestern Islands on (Anytown Metropolitan Area): 292,627 Households with a mean disposable income of Rs15,853.00. Of this, the spending potential index for restaurants is 94. The Anytown market holds a lifestyle rank of 61.

b. Median income: Rs38,326, with a majority above the median income between 45 and 64 years old. (A Western Islands target market) Growth Rate: In order to be successful, a new restaurant must control its growth to match the demand for its cuisine. A Western Islands includes expansion to two restaurants within the first 5 years only. Each restaurant will be designed for small to 8

medium patron count (+/- seWestern Islands ng for 75). SWOT Analysis. Strengths. In terms of product strengths, A Western Islands (WESTERN ISLANDS ) has several distinct advantages over its competitors. WESTERN ISLANDS s menu will be different, with unheard of entrees. The atmosphere will be authentic, with calypso and reggae music, West Indian costume and island setting. Managements extensive experience in West Indian cuisine will also be a strength for this venture.

Weaknesses. Constriction in this venture include pricing, ethnicity, and wage demands. Competition may present differences with lower prices, informal (less expensive) atmosphere, and national chain affiliation. The worst threat that ATI will face is the indifference toward its theme. These weaknesses can be overcome with extensive planning and on target marketing efforts

Opportunities. Dining out is becoming a regular occurrence in the Anytown area. Households dine out an average of 4 times per week (AnyState Restaurant Association), and continue to seek different cuisines. ATI can create a niche for its patrons, if properly executed. The addition of a lunch or brunch menu will also increase the opportunity to attract patrons. Catering to the casual dining market requires good service, excellent food, and a memorable environment The Competition. WESTERN ISLANDS competition includes 15 specialty restaurant types. Many of the restaurants listed in 3.2 above, do not include a themed atmosphere, and rely on the popularity of their food. WESTERN ISLANDS will include an atmosphere that will be as memorable as its food, reinforcing the desire to return. The competition (especially themed restaurants) product price is within the range offered by WESTERN ISLANDS

Marketing and Sales strategy

Promotions. WESTERN ISLANDS will utilize special promotions to advertise the grand opening, special events, and seasonal finales. These promotions will be targeted to residents and employees in the Northeast quadrant of Anytown. The promotions will 9

concentrate on the age group between 45 and 64, the bunch for lunch crowd, and businesses entertaining out of town guests. a. OpeningPromotion.Local DJ on site. b. Special Promotions. Popular Reggae artists, live. c. Seasonal promotions. A Taste of the Islands special menu changes based on seasonal foods. Advertising. The advertising program (see cash flow) includes funds for the promotions outlined above. Advertising will also be done with four 30 second spots during drive time radio, morning and afternoon, five days per week. The advertising will be sponsored by a

Advertising will be concentrated on Radio, with very little print advertising (flyers at restaurants, coupons in entertainment books, and weekly local magazines). The media message will be "you don't have to go to the islands to experience them, you can do it right here!" It will be important to differentiate "West Indian" from other ethnic cuisines. In-Restaurant Marketing Restaurant Night: Every first Monday of the quarter, we will have a special evening for restaurant people. A perfect night for the local area's restaurant owners, chefs and staff to get together to discuss the market and food trends, and possible Co-op efforts to promote the Midtown district. This is not a conflict of interest, it is an effort to increase visibility and patronage across the Midtown district. We will also invite the Midtown Alliance committee for their participation.

Monthly Dating Connection: With the increasing appeal of Internet and speed dating, the restaurant will offer a monthly dating night. In addition to food and beverages, customers can choose from an array of dating packages up for auction.

Wait Area Marketing: Wait staff will service appetizers to customers waiting to be seated or on the wait list.

Live Entertainment parties Special Events Valentine's Day Western Islands Halloween Masquerade party Wine tasting weekend 10

New Year's Eve party Sales strategy Our strategy is simple: we intend to succeed by giving our customers a combination of delicious and interesting food in an appealing environment, with excellent customer service, whether on their first visit or their hundredth. Our marketing strategies are designed to get critics and initial customers into our doors. Our sales strategies must take the next step and encourage customers to become repeat customers, and to tell all their friends and acquaintances about the great experiences they just had at Western Islands . New restaurants often make one of two mistakes: they are unprepared or underprepared for opening, and initial poor service, speed, or quality discourages customers from returning, or they spend all of their efforts at opening, and are unable to maintain the initial quality customers expect on return visits, decreasing word of mouth advertising and leading to poor revenues. Western Islands 's sales strategy requires consistently high quality food, service, speed, and atmosphere. We can accomplish this by:

Hiring employees who genuinely enjoy their jobs and appreciate Western Islands 's unique offerings

Continually assessing the quality of all aspects mentioned above, and immediately addressing any problems

Interacting with our customers personally, so they know that their feedback goes directly to the owners Marketing Mix

The description of the marketing mix for this venture includes:

Product - a complete West Indian menu and environment (ambiance). The hours of operWestern Islands on will be 10:00 AM to 10:00 PM with full breakfast, lunch and dinner menus. Alcoholic beverages will include beer and wine only.

Place Predominantly Northeast quadrant of Anytown, with some patrons for the remainder of our County. Price Breakfast through lunch to be competitive - Rs9.55 Dinner - Rs18.55 Promotion - Advertisement in media (print, radio) as required based on target market research. Promotion will concentrate on target customer needs and wants. 11

Sales Forecast The following sales graph is based on first year start-up estimates only. We anticipate that the business will not be at full operating capacity until the sixth month of operations. This is due to the competitive nature of the market and existing customer loyalty. All factors governing our sales progress are outlined below in the Important Assumptions section. Our sales forecasts for years 3 through 5 are very conservative, compared to industry standard growth rates. (See Ratios table for comparisons.) Although we hope to do catering for local businesses and government offices with time, we will insist on payment at delivery - we will not sell on credit.

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HUMAN RESOURCES Philosophy. A Western Islands has adopted the human resource philosophy that You are your environment. All staff members of the establishment are an integral part of its success, and will strive to create an environment of mutual respect, fair treatment and equitable compensWestern Islands on. Policy. A Western Islands will implement human resource policies to effectively brand the establishment to have the highest-quality, pre-qualified potential employees approach the establishment for employment, by its reputWestern Islands on alone. Key Personnel Business Manager Principal EducWestern Islands : of Professional Studies, Regis University, CO. Associate of Applied Science Degree, Business AdministrWestern Islands on, Anytown Technical VocWestern Islands onal Community College, NM Experience: 9 years experience as Office manager. My responsibilities include supervision of day-to-day operWestern Islands on and administrWestern Islands on, purchasing, contract management, human resource management, general entry accounting, accounts receivable and payable management, payroll, budget, strategic planning and records management. Present- Business AdministrWestern Islands major, School

Skills: NWestern Islands ve West Indian with demonstrated communicWestern Islands ve, organizWestern Islands onal,

and administrWestern Islands ve skills; proficient in business management computer software programs to include word processing, spreadsheet, data base, accounting, scheduling and programming. Critical Job Description Summary Supervisor The supervisory cook is responsible for directing the activities of other kitchen staff, menu planning, recipe creWestern Islands on, food and supply requests, specialty cooking duties, presentWestern Islands on and be responsible for environmental health 13

regulatory compliance. The supervisory cook will report to the General Manager and serve on the quality assurance team.

First Cook The first cook will act as supervisor in the absence of the supervisory cook. Duties of the first cook will include the preparWestern Islands on of menu items in accordance with recipes prepared for each dish, supervise pastry and salad preparWestern Islands on and perform cooking duties for day to day menu orders.

Hostess The hostess will be responsible for all aspects of table management. This include taking reservWestern Islands ons, coordinWestern Islands ng of wait staff levels in dining rooms, assignment of tables and sections to staff, greeting and seWestern Islands ng customers, logging and tracking of members checks, logging of events and functions in the reservWestern Islands on book, and coverage of the dining room phone during business hours.

QUALITY CONTROL/CUSTOMER SERVICE Quality Control. Quality control will implement Demmings 14 points of integrWestern Islands ng Total Quality Management (TQM) into every day business operWestern Islands ons. The management staff will create an environment to instill Quality as Everyones Business. Quality control techniques will include product, service, reception, presentWestern Islands on and environment.

Web Plan Summary Western Islands Restaurant & Lounge will have a dedicated website. It will be the virtual business card and portfolio for the company, simple, contemporary and well designed. Our site will offer our menus, prices, reviews and happenings at Western Islands . We will also have a monthly Paparazzi Review about what did happen at Western Islands to get new customers interested in our restaurant. Our website will be used to try out new offers, starting with an on-line order feature for the Sunday Market Brunch, and expanding if the concept gains favor with our customers. A customer will be able to order a selection for pickup using a credit card. Selections will

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be based on our pre-packaged meals available during the Sunday Market Brunch. This is also a potential for customers needing catering. The website will include email capabilities and online reservations and special events scheduling. Future Personnel Plan(After 5 yrs)
Year 1 General Manager (Year 2+) Partner/Manager Partner/Asst. Manager/Exec. Chef Hostess (Full Time) Hostess (Part Time) Waitperson 1 Waitperson 2 Waitperson 3 Waitperson 4 Waitperson 5 Waitperson 6 Waitperson 7 Waitperson 8 Waitperson 9 Wait/Barperson Bartender 1 Bartender 2 Busboy 1 Busboy 2 Busboy 3 Assistant Chef Sous Chef Cook 1 Rs25000 Rs48,000 Rs32,160 Rs24,000 Rs13,200 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs10,440 Rs14,400 Rs7,200 Rs9,120 Rs11,760 Rs7,200 Rs44,400 Rs32,400 Rs24,240 Year 2 Rs27000 Rs48,000 Rs32,160 Rs24,500 Rs13,500 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs10,440 Rs14,400 Rs7,500 Rs9,120 Rs11,760 Rs7,200 Rs44,400 Rs32,400 Rs24,240 Year 3 Rs28,000 Rs48,000 Rs32,160 Rs25,000 Rs14,000 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs10,440 Rs14,400 Rs7,500 Rs9,120 Rs11,760 Rs7,200 Rs44,400 Rs32,400 Rs24,240 Year 4 Rs28,500 Rs48,000 Rs32,160 Rs25,500 Rs14,300 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs10,440 Rs14,400 Rs7,500 Rs9,120 Rs11,760 Rs7,200 Rs44,400 Rs32,400 Rs24,240 Year 5 Rs29,000 Rs48,000 Rs32,160 Rs26,000 Rs14,800 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs5,640 Rs10,440 Rs14,400 Rs7,600 Rs9,120 Rs11,760 Rs7,200 Rs44,400 Rs32,400 Rs24,240

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Cook 2 Prep Cook/Dishwasher Prep Cook/Dishwasher/Cleaning Dishwasher 1 Dishwasher 2 Cleaning/Dishwasher Open Total People Total Payroll

Rs18,960 Rs12,288 Rs12,960 Rs8,640 Rs5,700 Rs11,760 Rs0 20 Rs 21577752

Rs18,960 Rs12,288 Rs12,960 Rs8,640 Rs5,800 Rs11,760 Rs0 24 RS 21642552

Rs18,960 Rs12,288 Rs12,960 Rs8,640 Rs5,800 Rs11,800 Rs0 25 Rs 23210712

Rs18,960 Rs12,288 Rs12,960 Rs8,640 Rs5,800 Rs11,800 Rs0 25 Rs23280912

Rs18,960 Rs12,288 Rs12,960 Rs8,640 Rs5,800 Rs11,800 Rs0 25 Rs 23367312

FINANCIAL PLAN
OVERVIEW. A WESTERN ISLANDS is organized as a Domestic LLC organizWestern Islands on, under the requirements for organizing a AnyState Limited Liability Company (53-19-7 to 55-19-10 NMSA 1978) wi th Articles of OrganizWestern Islands on filed with the Public RegulWestern Islands on Commission, CorporWestern Islands ons Bureau, Chartered Documents Division, City, AnyState. Income taxes will pass to OrganizWestern Islands on Partners, and is assumed at the rate of 27%

The financial models contained in this plan are based on important assumptions, most of which are shown in the following table. Assumptions made on the financial models presented as exhibits to this plan are listed under Financial Plan Assumptions, and illustrated in more detail in the referenced appendices or financial analysis sources cited.

The Owners intend to invest Rs254,700 at start up (Rs84,900.00 each). The economy will remain strong, without a major recession. That there are no unforeseen changes in consumers tastes or interests to make our concept less competitive.

That personnel burden rates will remain at the current rate during the period of the financial models represented.

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Start up Costs Facilities A WESTERN ISLANDS will be located in the North Eastern Quadrant of the City of Anytown, in leased facilities located within a major shopping hub offering ample parking, access and visibility from a major thoroughfare. Facility costs associated with Start-up costs include the first and last month lease payment, due upon execution of the lease. The facility will include approximately 1,500 square feet of dining area, 600 square feet of kitchen area, 200 square feet of storage, and 350 square feet of waiting/entry area. It is assumed that the facility will cost Rs14.00/square foot/year, under a one-year lease agreement with 4 automWestern Islands c extensions (5 year lease). Annual facility costs will be Rs37,104.00.

FURNITURE, FIXTURES AND EQUIPMENT Furniture, fixtures and equipment contained in the start-up costs include all major food preparWestern Islands on equipment, appliances, tools, dining furniture and serve ware necessary for a dining capacity of 75 patrons. The Major food preparWestern Islands on equipment (freezers, ranges, work tables, etc.) will be leased through a major supply house in Anytown, and the remainder of the equipment needed (Rs32,760.00) will be purchased with start-up capital.

MARKETING It is the intent to conduct special promotions to kick off the venture, prior to opening. The advertising started in these promotions will continue during popular drive slots, as shown on the projected cash flow (Exhibit FP-4). Marketing and Promotion also includes print material, menus, and office stWestern Islands onery.

REGULATORY Regulatory compliance costs include all costs associated with the permitting, licensing and environmental inspections necessary prior to the start of business. These costs also include the first year lease cost of the beer and wine license. FEES In order to ensure that proper programming and planning are conducted throughout the 17

first year of operWestern Islands on, A Western Islands will engage the services of The InnovWestern Islands ons Group (hospitality professional advisors). These services will include market planning, facility layout, initial financial records processes, and assistance in selection of staff. Start-up costs will include the initial 6 months of advisory service. Investment Opportunities The Western Islands Investment Program allocates equity position of 20% for a total of Rs200,000 in investor capital. The Investment structure is as follows: Investment Opportunity Total Investor Funding Opportunity: Minimum Investment Amount Investment Term (Investor Selection) Total Equity Offering (1% per Rs15,000 Investment) Starting Year 2 Silver: Projected Annual IRR on Investment of Rs15,000 - Rs49,000 Gold: Projected Annual IRR on Investment of Rs50,000 - Rs99,000 Platinum: Projected Annual IRR on Investment of Rs100,000 or more 11% 12% + Residuals 10% 20% Max Rs200,000 Rs15,000 3-5 Years

Risk Analysis/Mitigation 1. How do we allow an adequate startup period and capital to launch the concept and grow our customer base in a competitive sector? Our financial plan is budgeted to support the Worst-Case business scenario. We addressed the financial risk as follows:

We looked at our monthly break-even. We calculated worst-case monthly financial shortfall based on the ramp-up sales percentages outlined in our financial assumptions.

We budgeted operational shortfall in an operational contingency budget that we will utilize if the need arises. 18

2. How do we ensure we have addressed all resource gaps, and have the right industry knowledge? Owners Prateek Agarkar and Mohit Maru have a combined 20 years of Restaurant Management, Operations and Business Management Experience. The Financial Plan incorporates a budget for an Atlanta Restaurant Consulting group. Their services are budgeted for the business start-up analysis, rollout, and on retainer for 4 months of business operations. The selected firm has experience with over 72 Restaurant launches, specializing in the Atlanta Market. We will be recruiting a seasoned chef (national search) whose style is in accord with the Restaurant concept and our market segment. We will be offering an equity interest to our select Chef to maintain the industry knowledge. Our Accounting service will be contracted to a firm specializing in Restaurant accounting. 3. The current Economic slowdown and recovery state was a key consideration in our restaurant concept. How do we manage a successful restaurant in current market conditions? Our original effort was to open a restaurant twice the proposed size. As we are in the midst of an economic recovery, we have scaled back the size to reduce business overhead, startup requirements, and business operating capital. Another mitigation has been our overall Restaurant concept. We have the menu priced at a mid-tier level with no entre over Rs20. In addition, we have an extended Tapas and Appetizer selection priced between Rs160- Rs600, allowing budget dining in a distinguished restaurant.

4. How do we confirm that our Funding Requirement is sufficient? Mohit Maru has an extensive background in restaurant startup. He is currently an International Consultant for various restaurant ventures, and we will use his expertise in past projects as a comparative basis. We have leveraged our membership with the National Restaurant Association to look at industry averages for this market segment for Restaurant startup and Operations. Additionally, we included a contingency buffer in the financial estimates to account for any potential cost variance.

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We have worked with our Restaurant Consulting firm to validate our cost estimates to their industry knowledge. 5. How do we know we have selected the right location for this concept? Again we will draw on the Consulting group that has the expertise in site selection and lease negotiation. In all, there are no guarantees with location, but we took a very objective approach with our concept. Instead of going in with a predefined business concept, we let the Market Analysis define the need. Based on the results, the Western Islands Restaurant concept was formed specific to Midtown Atlanta. Site selection was based on space, visibility, and functionality; the city grant award confirmed our decision. 6. What if there is an additional need for Business Capital after the Restaurant has exhausted its 6-month buffer? Our intent is to be a self-sufficient business far in advance of the 6-month probation period. But as we are considering all contingencies, we have looked at this risk. We have accounted for an operational contingency budget that will be used to supplement any slow periods. Our next step would be to approach our private investors for capital by extending their return on investment. We would also look to the partners' capital reserves as another source of funds. PRE-OPEN Pre-opening costs include all costs associated with opening the doors on the first day. These costs include staff orientWestern Islands on and training, special opening promotion, interior decorWestern Islands ng (West Indian Artifacts), and facility cleaning and set-up. FINANCIAL PLAN EXHIBITS START-UP COSTS A. Limited Partners will invest Rs84,900 each, with initial funds of Rs64,900 and Rs10,000 due at the beginning of Western Islands on, and an additional Rs10,000 due at the end of the first month of Western Islands on. The additional Rs20,000 will be used as cash injection for operWestern Islands on. B. Funds not used as specified in start-up expenses will be deposited in the reserve account, or included in operWestern Islands ng cash flow. C. Additional start-up costs (if any) will be shared equally by the limited partners, as described in the Articles of Western Islands on. Funds needed for additional start-up will not be deducted from cash flow injection. 20

INCOME STATEMENT and CASH FLOW

Hours of Western Islands : 10:00 AM to 10:00 PM 7 days per week Hours of Staffing: 9:00 Am to 11:00 PM 7 days per week Western Island Capacity: 75 Number of patrons: Evening 240 Max/day, Daytime 480 Max/day Assumed number of patrons at start: Evening 66/day, Daytime 49/day Assumed number of patrons after 2 months: Evening 150/day. Daytime 50/day Occupancy Rate at Beginning: 27% After 2 months: 62%

PER PLATE

EVENING

DAYTIME

Raw food costs Dry Goods Sundries Condiments Paper Goods Linen Labor with burden Marketing Allowance Other Expenses Total

160 25 17 65 55 30 28 130 180 Rs 700

120 25 25 65 55 0.00 40 137 120 Rs 590

Menu Price Per Plate: Gross Profit Per Meal:

Rs 18.55 23.5%

Rs 9.55 18.2%

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Marketing Costs: 1. Radio Advertising: Drive time Rs130/60 second slot at 4 slots per day 2. Printed Material: Coupons and brochures at area hotels at Rs.85 each at 22,000 3. Promotions: Area DJ on site at Rs4,800 each visit scheduled 3 events

Balance Sheet
A. Current Assets includes starting capital of Rs30,000 (Rs10,000 each partner) and initial supply purchases (inventory) for start-up. B. Fixed Assets includes lease amounts (Equipment and sign leases have low buy-outs). C. Current Liabilities includes unpaid (2 week) expenses and salaries. D. Long-Term Liabilities includes exposed lease payments (1 year terms). E. Balance sheet includes projections at start-up and at the end of 12 months operWestern Islands on.

Expansion, Payback & Exit Strategy

In addressing this question we look at the Exit Strategy as a definition of our business vision and goals, as well as a contingency in the event the business is unsuccessful. We have addressed this question at several levels: Expansion as a Business Goal We have set multiple financial goals to grow the success of the Western Islands concept, and compound the profit return for Western Islands Investors. Expansion (Option 1): Our overall goal to maintain Western Islands as a unique and eclectic concept. Based on projections, the business has captured market share by the end of the first year. In addition Year 2 brings an increased sales and profit margin to sustain the addition of a full-time General Manager. By second quarter of Year 2, the owners will look to launch a second restaurant concept. Expansion (Option 2): Throughout our business plan we have stayed focus that Western Islands would be successful as a larger venue, with greater sales capacity 22

and revenue potential. Our objective with the site selection and lease negotiation is to have the opportunity to expand the restaurant as a logical growth and profit plan. Private Sale: We are in the business of making money. At the close of Year 3, we see Western Islands as meeting 80.4% of its optimum sales potential with the current seating and space allocation. At this stage the business debt is reduced, profit margins are increasing, and Western Islands has established market share. We will look at the private sale of the majority interest via A) Leveraged Buyout, or B) A larger Restaurant consortium. In both cases, our interest is in delivering healthy profits to our Investors and Financial backers. Sales and profit margins will be based on the restaurant valuation in Year 3. Financial Solvency: The financial projections indicate that exit will be achievable over 3 years for the operating capital line of credit. Under a realistic scenario the Company should have over Rs70,000 in cash in the bank after income taxes the second year. The entire financial debt would be retired by Year 7.

Exit Strategy to Retire the Business

We at Western Islands are committed to our concept and its viability. We step into this venture with confidence and the success of our respective prior business efforts. No one attempts a business anticipating failure, however sometimes ventures do not fulfill their promise. In the event that our venture cannot achieve profitability and retire the encumbrances, we will first attempt to sell the operation and use the proceeds to clear all outstanding balances. If we are unable to sell the operation for sufficient proceeds we will forced to default whereby the SBA loan will be in senior standing.

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Restaurant map

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