This is a business model of Street 6 Foods Place an upcoming restaurant in Texas City. Street 6 Foods Places is a registered company, owned by Martin Smith, Tanya Hughes, and Alex Friedman. Realizing that we are entering into a competitive business venture, we will capitalize on our strategic location, high quality foods, and price advantage.
We will be located at Laxcon Business Place, Sixth Street Austin, Texas. The restaurant facilities will include the main sitting place, with a ground floor just at the entrance of the building and an upper sitting place with a balcony overlooking the city, which will give a wide view of Texas City to our clients as they enjoy their delicacies.
We enter the market with many prospects informed by the results of our market survey, which reveals a stable market sector with a regular flow of clients in our business. We will also take advantage of the growing demand for Asian, Chinese, and African dishes in the United States and develop creative recipes for these dishes. Our target market will be young professionals and businesspersons.
The restaurant also comes with a high quality and low cost model, which is just what the young professionals and students will be looking for in this prime area of the City. Using a simple restaurant business model, we will be serving customers at different times including breakfast menu, lunch menu, dinner menu, special menus for occasions, and other considerations driven by the market need. We have adopted a moderate price model even though we will be running our business in the heart of the City. Our prices will only target a gross profit margin of 40%. We target our sales to comprise 70% restaurant sales and 30% catering sales.
Street 6 Foods Place
Texas City has an estimated population of 1.8 million comprising Anglo, Black, Hispanic and Other populations. It is a multiracial city that is known for thriving businesses. Sixth street is one of the busiest streets in the downtown region located in Austin, Texas. The street is the entertainment hotspot of Texas City. This street is historic and was initially known as Pecan Street, with three east-west streets, which had names of trees, and three north-south streets, which were named after Texas Rivers. The street is also known for its amazing ethnic diversity and co-existence. Street 6 Foods Place will capitalize on this ethnic diversity to serve the richest delicacies from all the groups at very fair prices to beat our competitors.
Street 6 Foods Place is an upcoming restaurant that will serve high quality foods in downtown Texas City. The restaurant‘s location will be on the Sixth Street. The selection of this location is based on the level of human traffic flow in the morning, lunch hour, and evening, which presents opportunity for booming business. It is also a street dominated by entertainment joints and this makes it a busy place over the weekend and evenings.
The menu offered in the hotel will be unique and we will use differentiation strategy geared to ensure that the foods served to customers will be high quality and affordable prices. There are three other similar restaurants on the street that we will be competing with, and we will use a fair cost model and high quality dishes as our distinctive features that will attract customers to our hotel.
Street 6 Foods Places is a registered company, owned by Martin Smith, Tanya Hughes, and Alex Friedman. Realizing that we are entering into a competitive business venture, we will capitalize on our strategic location, high quality foods, and price advantage. This will bring many customers and referrals to our business. The hotel will be launched through an aggressive marketing promotion aimed at sending the message that we are the preferred eating-place in downtown Texas.
Street 6 Foods Places is a realized dream by Martin Smith, Tanya Hughes, and Alex Friedman who are students who have just graduated from The University of Texas at Austin. They look forward to a vibrant business that will help them harness the skills they have acquired from the University as they launch their career life. This will also be the beginning of their business ventures. Martin Smith is a graduate from the School of Business with a degree in Accounting. Tanya Hughes has graduated with a degree in Nutritional Sciences. Alex Friedman has graduated with a degree in Communication, specializing in advertising.
Street 6 Foods Place will have an initial capital outlay of $60,000. Martin Smith, Tanya Hughes, and Alex Friedman will each contribute $10,000 from their savings. They have all also confirmed to have a promise of $10,000 from their families, amounts they intend to repay in the first two years of their business.
Business Location Facilities, and Ownership
Street 6 Foods Place will be located at Laxcon Business Place, Sixth Street Austin, Texas. The restaurant facilities will comprise the main sitting place, with a ground floor just at the entrance of the building and an upper sitting place with a balcony overlooking the city, which will give a wide view of Texas City to our clients as they enjoy their delicacies. The total seat capacity of the restaurant is 80. The restaurant will also have the inner rooms, which will house the kitchen well stocked with ovens, cookers, and fridges. Next to the kitchen will be the supplies store where the hotel’s ingredients will be stored.
As the business is launched, it will be a partnership of Martin Smith, Tanya Hughes, and Alex Friedman who are the founders of the business. The Restaurant is already an incorporated company trading in the name of Street 6 Foods Place. There are no immediate plans to change the company structure although the directors are open to review this in future based on the growth of the restaurant and the expansionary requirements.
Street 6 Foods Place will be the ideal place for people touring Sixth Street to look for their breakfast, lunch, and evening meals. Additionally, the restaurant will be offering additives and take away packages. The take away packages are specially designed for students and office workers who need to carry a snack or light meal on the go.
Industry Analysis and Trends
Street 6 Foods Place enters the market with many prospects informed by the results of our market survey. We have identified a market sector that is stable which guarantees a regular flow of clients in our business. Survey conducted by the National Restaurant Association has identified the Restaurant Industry in Texas as one of the fastest growing industries. The sales in this sector are expected to hit a record high in 2015 of at least $680 billion. The last three years in the sector have been years of real sales gains, growing at over 2% annually.
Although the sector was hit hard by the 2008 economic recession and its growth slowed down during the recovery phase, the sector has now gathered momentum and represents a sector where investors are assured of return for their investments. The fast food industry is especially more robust and stable as it is not affected largely by external factors like falls in tourist numbers. The improving household financial situation in the United States and Texas in particular is good news to the industry. This is because the consumer’s spending power is improving, the notably the middle-income class.
With more jobs being generated due to the recovery in the small and medium enterprises sector, The restaurant industry continue to grin with hope and Street 6 Foods Place relies on these growth prospects in its business formulation.
The increasing prevalence towards healthy lifestyles has caused many consumers to prefer cultural foods, which are considered healthy. Several exhibitions in the City have confirmed the growing popularity of traditional foods. Street 6 Foods Place will capitalize on this trend to prepare the best quality traditional dishes. This will also make the hotel an ideal eating destination for tourists who are always keen on sampling cultural foods.
Street 6 Foods Place will also take advantage of the growing demand for Asian, Chinese, and African dishes in the United States and develop creative recipes for these dishes. Most of the Asian dishes are prepared with olive oil and sesame seeds, which are known to bring healthy benefits (Aguilera, 2011). Arabic dates and fruits are also becoming popular every day as they contain essential minerals and vitamins. These are some of the opportunities that the company will capture in our menus.
Target Market Description
Street 6 Foods Place targets the downtown section of Texas. It has been located in a potentially busy section of Texas City with a regular flow of potential customers, notably young professionals and businesspersons.
Our target population has been further analyzed below:
- Young professionals in Texas City – A recent survey has established that Austin has a 17% population lying within the 25 and 34-age bracket and with a median income of $30,816. This population continues to grow every year.
- College students – The University of Texas Austin has a student population of 52,186 and this presents a good catchment for the company.
- Tourists- the growing number of tourists visiting the city is also a prime target for the restaurant especially for traditional foods.
- Visitors to Entertainment Joints – Sixth Street is the entertainment hub of Texas City and this means there is a regular flow of people visiting the entertainment spots which is a good catchment for the restaurant.
Marketing and Sales Plan
The restaurant has already identified a unique location at Laxcon Business Place. Being one of the most visited places in the city, it presents a viable business or the restaurant. The restaurant also comes with a high quality and low cost model, which is just what the young professionals and students will be looking for in this prime area of the City. We have aligned our business objectives with market expectations and we have identified the needs in the market, which the restaurant will be meeting, in the course of our business operations. Our restaurant will be equipped to attract young customers, which is congruent to our target market.
The victory of our enterprise will be determined largely by our ability to convince the market and to make our customers buy into our idea. In order to assert Street 6 Foods Place as the eating-place to be in, we have taken the following strategies:
- We will serve high quality and authentic traditional dishes that compete with our business rivals.
- Establish a vibrant networking strategy that will involve using our clients for referrals especially in companies and colleges.
- We will design state of the art publicity materials such as posters and flyers, which will be spread strategically in the City. We have also embraced the use of social media and email marketing since our target customers are very active on social media and internet.
- Studying the tastes of our clients on a regular and using our client database to capture feedback so that we can our recipes will match their tastes.
- Creativity and innovativeness as well as sensitivity to client needs will always inform our business decisions and models.
The directors view the serving traditional foods alongside modern delicacies as an ambitious yet achievable venture owing to the fact that it calls for their ability to master tastes and preferences of different ethnic groups without losing track of the contemporary consumer. There are already other restaurants serving cultural foods on Sixth Street and the city at large. However, the market survey conducted by the directors has established that there is big room for growth in this sector and new ideas are needed to craft high quality menus that will ensure a flow of customers. Street 6 Foods Place will capitalize on fresh ideas as well as borrowed ideas to provide meals that will leave our customers craving for more. The motivation for this business idea is the urge to meet a genuine need with better value for our customers. The business combines expertise in the main areas of business management that will be required by the restaurant.
Our model of a restaurant business is not complicated since it will majorly involve availing the appropriate foods to customers at different times including breakfast menu, lunch menu, dinner menu, special menus for occasions, and other considerations driven by the market need. Every business has to consider its areas of specialty and understand its niche. For Street 6 Foods Place, we are using a composite business model since we will serve both traditional and modern delicacies. Our product assortment and range will include whole meals for lunch and dinner, customized breakfast menus, varieties of drinks ranging from beverages, fresh juices, and soft drinks, desserts with both cultural and modern tastes, and salads.
Our business model is one of quality with a price advantage since we target the middle-income earners who form the better part of the population in Texas. Located near several entertainment joints and recognizing Sixth Street as the entertainment hub of Texas City, we are aware that there will be traffic of young professionals and business people and we have developed a menu targeting that segment of the population. Our model will be that of a fast food place with an allowance for customers who wish to sit longer. We also intend to take up more space on the upper floor and have a restaurant designed for small group meetings, which are common with young professionals.
Our moderate pricing model will not mean compromise the quality of our meals. We will utilize an articulate supply chain management model that will ensure we source our ingredients at the lowest possible prices and take advantage of the technical economies of scale in leveraging a price advantage to our customers.
The business idea that we have formulated will enable us to target a sufficiently wide pool of customers and we are sure the business will break even within one year and become a profitable venture. We have undertaken a market survey on the tastes of customers in Texas City, which we believe, is the first key step in formulating a business concept (Blythe, 2013). The demand for fast foods is growing steadily in the city as well as that of cultural foods and the timing of this business is therefore good enough. The existing restaurants have not exhausted the market and the population especially for young professionals and students continue to grow in the city at a rate that calls for more investment in the food and beverages industry.
Our business location is also well accessible to our target clients especially the young professionals and businesspersons. Additionally, our business will be meeting a great need owing to the fact that food and drinks are consumed daily in large quantities therefore our business does not face the risk of exhaustion or lack of customers as a result of declining demand. Our business concept is therefore viable and daily sales are guaranteed as long as we keep to our model of high quality and fair price.
As far as embracing technology is concerned, the restaurant front office and back office operations will be automated. We will use a restaurant managemt software known as BIM POS which is an Easy-to-use yet advanced solution for the hospitality management and the food service industries.
Martin Smith, Tanya Hughes, and Alex Friedman will form the management team. Tanya Hughes will be the Chief Operating Officer (CEO). Tanya is a graduate in nutritional studies and will help the restaurant in the design of recipes and menus as well as other aspects of catering. Martin Smith will be the Finance Director. Smith holds a degree in Accounting from The University of Texas, Austin. He will be very resourceful in the formulation of budgets and financial strategies for the company as well as ensure proper internal controls are maintained in the company. Alex Friedman will be the Marketing Director . Friedman has graduated with a degree in Communication, specializing in advertising. He will be very resourceful in formulating and coordinating all the marketing aspects of the restaurant. Five qualified chefs and caterers will be recruited. The company has already identified three experienced chefs who have been working with big restaurants in the City.
Street 6 Foods Place will be launched on August 1 2015 at Laxcon Business place. The management team is currently acquiring the key assets that will be used in running the restaurant. On the launch date, the company will offer free goodies to first time clients. The Management will use the first three years of the business to monitor the growth of the restaurant simultaneously designing strategies for expanding the business in the next strategic phase.
Street 6 Foods Place has designed a financial plan, which has been put together by Martin Smith, the Finance Director. The plan so established comprises of the company’s projections in the first three years. In includes, a projected balance sheet, projected income statement, and projected cash flows statement.
Street 6 Foods Place will avail our dishes at moderate prices even though we will be running our business in the heart of the City. Our prices will only target a gross profit margin of 40%. We target our sales to comprise 70% restaurant sales and 30% catering sales. The company will base its success on the technical economies of scale emanating from a large clientele.
Our restaurant has a sitting capacity of 60. We expect 160 customers for breakfast each paying an average of $2, 180 customers for lunch each spending an average of $4 and 180 clients for dinner, each paying $5 on average. We have summarized the revenue projections in appendix 2. We also estimate that the business will raise 20% of our revenues from outside catering.
Aguilera, J. M. (2011). Food engineering interfaces. New York: Springer.
Blythe, J. (2013). Consumer behavior. London: SAGE .
Schmidgall, R. S., Hayes, D. K., Ninemeier, J. D., & Baker & Taylor, Inc. (2002). Restaurant financial management basics. New York: John Wiley & Sons