XYZ restaurant business venture

XYZ restaurant business venture

Introduction

This paper presents an opportunity analysis report of the XYZrestaurant business venture aim at catering for the various needs and expectations of staycationers in the UK.

Business overview

Over the past few years, the domestic tourism business has increased tremendously. This has, in turn, made the hospitality and leisure business evolve and grow rapidly to meet the increasing expectations and needs of different groups of people on holiday. According to research, several hospitality and leisure business enterprises in the UK have seen an increased demand for domestic tourism. As a result, many hospitality establishments have reported growth in their revenues, whether from the high number of visitors or services provided by or these organizations or a combination of both.Staycation business has grown rapidly in the UK to cater to the needs and expectations of domestic holidaymakers (Pawłowska-Legwand and Matoga 2016). According to the survey report by the Barclays Corporate Banking involving more than 2,000 local holidaymakers and 500 business leaders in the hospitality and leisure sector, several staycationer of all ages plan to spend their holiday at home (Pyke et al.,2016).

Summary of XYZ restaurant business venture

The XYZ restaurant business venture will be established in the United Kingdom to cater for the increased demand for accommodation and other services among the domestic holidaymakers in the UK. The XYZ restaurant business venture target market staycationers of all ages who wish and plan to spend their holiday at home.The business venture will specifically target the millennials( young individuals aged between 25-34) as the leading market segment. This is because this group of individuals has a higher preference for undertaking domestic holidays. Also, this group of individuals takes local holidays to escape from their busy daily schedules, and even in most cases, they want to spend their time with their loved ones when compared to any other generation (de Bloom et al. 2017).

Therefore, the establishment of the XYZ restaurant business venture will help to provide accommodation and other services to this particular market of young Individuals who yearn to spend their holidays within the British Countryside. The establishment will provide convenience to the staycationers to access various tourist attraction destinations in the UK. The restaurant will have ample comfortable space for dining of food with different sections in and outside depending on the place the customer is interested in dining. Those who will choose to dine inside the restaurant’s premises will be enjoying every form of entertainment. Take away foodstuffs will also be provided whereby the restaurant will have a separate through lane where our take away customers will be served with minimum interference.

Personal swot analysis

Having studied business administration in school, I will apply the skills and knowledge gained in running and managing the XYZ restaurant business venture. Also, I will bring in to business venture my skills and experience in website development and designing. This helps the organization in carrying out marketing activities, identifying prospective holidaymakers, and also serves as a booking engine where potential customers will able to make a reservation online.To minimize some of t external threats such as competition from other established hospitality and leisure industries in the UK, I will use my administrative skills and experience to ensure that we o employ a team of qualified employees who are capable of providing personalized quality services to our targeted consumers.

Providing digital services such as online reservation systems in our XYZ restaurant will give us a competitive edge than our rivals in the hospitality and leisure industry. This is because digital services will ensure that young individuals who are our primary target market for our staycation business venture can book their accommodation services using their smartphones. Based on the market search conducted, the trends associated with the hotel industry include high growth rates of hotels because of the ever-increasing tourist numbers in the United Kingdom.

 Market Research

SWOT analysis;

This is an essential tool that helps business organizations in evaluating their position in the market. In this case, the SWOT analysis for the XYZ restaurant business will be as follows;in terms of strengths, the restaurant will offer cheaper and affordable accommodation services and personalized quality services and products to our target consumers. Weaknesses of our business venture include;it is a new establishment and has limited financial resources. The opportunities for our XYZ business enterprise include;  offering digitized services to our target consumers. The threats include; stiff competition from other hospitality and leisure industries as well as the high cost of running the business.

Pestel analysis

The pestel is an essential framework that is used by marketers to examine macro-environmental factors that are likely to have a high impact in an organization (Milohnićet al. 2019).The pestel framework aim at addressing political, economic, social, technological, environmental, and legal factors that are likely to influence the business organization.

 Competitors

The XYZ restaurant business venture is likely to receive stiff competition from the other established hospitality and leisure organizations within the UK that also offers accommodation, food,  beverages entertainment, and recreational services to the domestic holidaymakers. Our USP and value proposition will be to offer digitized services to our targeted consumers who, in this particular case, are the Millennials. To differentiate our business from our main rivals, we will ensure that we offer cheaper and affordable prices to our consumers who, in this case, are the young holidaymakers. Businesses do not operate in a vacuum; in this regard, other players may get the go-ahead from the government and decrease the market share, thereby reducing the profits of the company. Competition poses a severe challenge as the company has to remain competitive to stay in the market. Increased competition will lead to a change of strategies where the company may be forced to lower the price without changing the quality, thereby reducing the profit as a result of increased production cost as well as decreased bag prices.

Porters five model analysis

The potters five forces framework helps business organizations in evaluating and defining its competitive landscape.In this regard, the XYZ restaurant is likely to face a strong force of competitive rivalry from other players in the hospitality and leisure sector in the UK. The bargaining power of buyers and consumers will be high due to the high level of switching costs. The suppliers’ bargaining power of the XYZ restaurant is likely to be high since it is a new establishment in the market. The threat of substitute products and services will be a high due high number of players in the market. The risk of new entrants in the market will be low due to the high costs incurred in starting running the enterprise. The XYZ will use the same value chain that is used by other players in the hospitality and leisure industry.The cost of production is an essential aspect of the business. Increased value reduces the profit margin of the company. The economic condition of the country is not stable to the high inflation rate as well as other related factors.

 Growth potential

The number of domestic tourists planning to undertake holiday has risen majorly being fuelled by the young millennials who seek to space their daily busy routines. An increase in domestic tourism in the UK presents a golden business opportunity for Hotels, restaurants, and other tourism destinations (Fennell and Cooper 2020). According to research, several hospitality and leisure business enterprises in the UK have seen an increased demand for domestic tourism. As a result, many hospitality establishments have reported growth in their revenues due to increased demand (Sørensen, F., Bærenholdt and Greve 2019). Therefore, given the growth trends in the number of domestic tourists planning to undertake a holiday in the United Kingdom, there is a greater potential that our proposed XYZ restaurant will grow in the future and become profitable. Since the XYZ restaurant venture is an income-generating asset, if it develops, it will generate supernormal profits in the future.

The XYZ restaurant product life will involve various activities such as; defining the type of products and services that will be offered to our prospective targeted consumers who, in this case, are the young individuals aged between 25-34 years who have a preference for holidays in the UK. Besides, it will also involve defining the scope of the project as well as the budget needed to deliver that scope.

The basic marketing strategy will be price-based to ensure an affordable price attracts many clients. The hotel will be branded as a 4-star hotel, a category, which requires the hotel pricing to be slightly lower compared to the of the first-class hotels, 5-star hotels. On narrowing down to promotional mix, XYZ restaurant will use mass advertising, sales promotion, and online marketing to ensure its range of goods and services are known widely. XYZ restaurant advertisements will be conducted using print and electronic media. The electronic media advertising will be evident in international and local TV and radio sources.

Capital requirements

Huge amounts of capital will be required to start the XYZ restaurant business venture in UK. This capital will be required to cater to various expenses such as buying assets, equipment, furniture, supplies, and other expenses such as labour, rent, marketing, legal expenses, and insurance, among many others. The funds to finance the project will be sourced from various investments, such as personal investments such as savings. Besides, the funds will also come from commercial business loans from financial institutions. The loan will be paid back to the financial institutions within four years. The remaining amounts of capital will be sourced from friends and relatives. The mentioned sources of funds will provide us with adequate capital to start the business enterprise in UK.

The financial plan of XYZ restaurant will include the initial start-up cost, profit and loss, the cash flow, and the break-even analysis. The total cost of starting up is estimated at $300,000. The amount of capital required will be allocated as follows;

Since the business will be at its establishment stage, it is not expected to produce great performance in its first year. The business will assume a slow growth in its first year. The gross margin of the business is projected to grow slowly as the restaurant will be new, and there will be many challenges in adapting.

References

Pawłowska-Legwand, A., and Matoga, Ł., 2016. Staycation as a way of spending free time by city dwellers: examples of tourism products created by Local Action Groups in Lesser Poland Voivodeship in response to a new trend in tourism. World Scientific News, 51.

Pyke, S., Hartwell, H., Blake, A., and Hemingway, A., 2016.Exploring well-being as a tourism product resource. Tourism Management, 55, pp.94-105.

De Bloom, J., Nawijn, J., Geurts, S., Kinnunen, U., and Korpela, K., 2017. Holiday travel, staycations, and subjective well-being. Journal of Sustainable Tourism, 25(4), pp.573-588.

Milohnić, I., Bonifačić, J.C., and Licul, I., 2019. Transformation of camping into glamping–trends and perspectives. Tourism in southeast Europe…, 5, pp.457-473.

Sørensen, F., Bærenholdt, J.O., and Greve, KAGM, 2019. Circular economy tourist practices. Current Issues in Tourism, pp.1-4.

Fennell, D.A., and Cooper, C., 2020. Sustainable Tourism: Principles, Contexts, and Practices. Channel View Publications.