Italian Corner restaurant business plan

Executive summary

The Italian Corner business plan is based on how the current project is using its available assets and capital to operate an old restaurant in a new way. The new owner is going to take a loan and improve the place to be a unique Italian restaurant that is successful and profitable.  The place is located in Sultan Qaboos Street Park near The Avenues Mall Oman and it will be made for serving the local people of Muscat, tourists and shoppers who like to try new food types while shopping. There are not too many Italian restaurant s in Oman which makes the new place opportunities are big. The plan is based on serving 170 customers to be well seated and served. Kitchen is going to be renewed and improved via equipment and chefs. High income families growth is a main aim of the current project as the restaurant is tending to have more than 30% of its customers from this category. The Italian Corner will be established in a prime location where good food is presented in a nice innovative way with strong management and a strong working crew through a warm Italian atmosphere that is like a grocery store that attracts people who seek new taste and ambiance.

Mission

The Italian Corner mission is to present a full service family Italian restaurant that offers high quality food dishes from the Italian cuisine in affordable prices to families and groups of friends who like to visit a unique place and enjoy an eating experience there. The place has a goal of providing customers with an entire eating experience that goes far beyond what they expect each time they visit the place. The place is focusing on the concept of hygiene and cleanliness as main customers' needs in addition to taste, good service and high quality. The place values people who are working for it as workers' satisfaction is a main objective of the Italian Corner as this ensures loyal employees who work hard for improving the service of the place. 

Objectives

The project objective is to purchasing the current available assets of the old place and improving them through converting the place into an Italian high quality restaurant that presents different types of pastas, pizzas and other Italian foods. Having a strong in-depth management; the current objectives can be achieved:

1. Providing customers with the finest and highest quality Italian food and service they can have in Oman.

2. Creating a cooperative working atmosphere where workers can feel home and belonging to the place according to certain set goals for success and making high profits.

3. Having a hit of first year sales 1.5 million RO or more with a 10% growth rate in the following years. 

4. Reaching a high gross margin.

5. Maintaining both labor and food costs to be consistent with the business high ridge.

6. Maintaining good reputation and building a good brand in Oman.

7. Being a respectable family restaurant that can attract high income people.

8. Being the first Italian restaurant in the area. 

Keys to Success

• The strong and supportive location where the restaurant is based in.

• The professional managers and workers the place depends on.

• Uniqueness in products and decoration of the restaurant.

• Innovation in techniques of presentation.

• Experienced chefs and managers.

Company Summary

The Italian Corner is a family Italian restaurant that is based in a nice area in Muscat, Oman near the Avenues Mall which makes it interesting for shoppers and visitors who look for good eating experiences. The company depends on an innovative dinning program that attracts customers through providing them with offers and parties that can please them and enable them to treat a free sample of our food and desserts. The place is tending to make parties at the weekends and attract people to try small free samples of the food presented in the place including main dishes, pastries, desserts and drinks. There are gift certificates that are tended to be delivered to customers based on the spent money in the place and the number of visits they make to it. The program also includes gifts as birthday parties for distinguished customers and their families. The Italian Corner restaurant will represent an intimate charm and atmosphere of an Italian Grocery Store supported with framed Italian pictured and prints as well as Italian American pop music. Both the menu and ambiance will attract individual customers, couples, friends, youth and workers as well as the entire family.

Company Ownership

The company is owned and operated by two main owners who are graduated from business administration and are having MBA certificates. One of them is acting as a president and the other is acting as a secretary. The place is opening under the name of Italian Corner and will be run by a number of professional managers.   

Start-up Summary

The Italian Corner will be supported by the owners with equipment, raw materials, kitchen equipment, improvements, staff and management costs. The loan will be taken from National Bank of Oman in a sum that is estimated with 325.000RO, start up expenses are 350.000RO, cash input are 75.000RO and the loan balance will equal 600.000RO to be repaid over 15 years time with an interest that equals 9.5%. The two owners keep a sum of money that is 90.000 RO that will only be used when needed if there are sudden or unexpected costs needed related to the start up. The start-up equipment will include the different required items that will be purchased for improving the current place including its kitchen such as mixers, stoves, ovens, freezers, dishes, cups, decoration, kettles, coffee machines, refrigerated systems for keeping pizzas and other pastries. 

Table: Start-up

Start-up
Needed items
Expenses for start up
Expensed needed items	RO0
Small equipments	RO3,000
Place License	RO400
staff and Mangers	RO10,000
Advertisements	RO1,000
Insurance costs	RO3,000
Other Expenses	RO0
Total Start-up Expenses	RO17,400
Start-up Assets
Cash needed	RO90,000
Inventory Start-up	RO10,000
Other needed Assets currently	RO10,000
Long-term Assets	RO547,600
Total Assets	RO657,600
Total Requirements	RO675,000

Table: Start-up Funding

Start-up Funding
Start-up Expenses for Fund	RO17,400
Start-up Assets for Fund	RO657,600
Total Funding need	RO675,000
Assets
Non-cash start up Assets	RO567,600
Cash Requirements from Start-up	RO90,000
Additional Cash collected	RO0
Cash Balance on begining Date	RO90,000
Total Assets	RO657,600
Liabilities and Capitals
Liabilities
Current Borrowed	RO0
Long-term Liabilities	RO600,000
Accounts Payable ( Bills)	RO0
Other Current Liabilities free ofinterest	RO75,000
Total Liabilities	RO675,000
Capital
Investment plan
Owner	RO0
Investor	RO0
Additional Requirements for investing	RO0
Total Planned Investment	RO0
Loss of Start-up	(RO17,400)
Total Capital	(RO17,400)
Total Capital as well as Liabilities	RO657,600
Total Funding	RO675,000

Services and products

The Italian Corner menu has a variety of 30 types of pasta and 15 chicken types added to a variety of vegetables, soups and sea food entries. There are a number of appetizers, snacks, salads and sandwiches. There aren't any types of wines or ham meat as Halal food is a main concept of the place. Special salads and family meals are served on the restaurant's main menus. Fresh juices, cocktails and smoothies are on the menu in addition to a number of delicious Italian desserts. The restaurant focuses on using the freshest ingredients of raw materials and the finest pasta imported from Italy and special sauces prepared by chefs. Meat and chicken are fresh and come from special farms in Oman. The menu of the restaurant also includes a diet list that presents the same products in low fats and low calories portions to provide customers with the needed dietary meals they may ask for. There is also a menu for children that contain a variety of meatballs pasta, burgers, fried potatoes and pizza as well as different types of fruit ice cream and cheesecakes; it is based on a concept of Sponge Pop presentation meals to attract children to such meals that come with a gift toy. The restaurant focuses on presenting a variety of new tastes from the Italian cuisine in an innovative technique that tends to improve current Italian dishes and develop them to match the Arabian needs and tastes.

Market Analysis

The Omani market is a great wide business market that depends on high national and individual incomes that make the trade movement is rich and strong. Restaurants are a good choice for making a successful business in Oman because the social behavior of Omani people tend to prefer outdoor foods and to enjoy the fun and pleasure of eating outsides in superb places that are interested in taste, cleanliness and quality in addition to the friendly service. The Omani people are such friendly people who are highly civilized and used to trying different verities of food from different cultures as in Oman; there are different restaurants from different cultures such as Chinese, Arabian or Italian. Oman is a big consuming country for different types of food and this high food consumption is said to be at a rate 3.7% compound annual growth rate in 2017. Oman consumes meat in a big rate that is increasing yearly in a percentage of 5.1% and fruits and vegetables are consumed with a 4% yearly growth rate each and milk as well has the same ratio. This tells that food consumption is high and the restaurant's opportunities are big. Hospitality industry is flourishing in Oman and there are different foreigners who are either working there or visitors. Omani people are consuming different food types rather than other GCC countries as the population in Oman is growing fast and the tourism industry is flourishing. The food consumption is generally high in the GCC region as within the time period between years 2012to 2017, the food consumption rate of the GCC area is potential to be greater at a CAGR of 3.1 % to be 49.1 million MT by the end of 2017. It is supposed that The GCC region's per capita food consumption will get by 2017 to be 983.0 kg. The performance of the Omani food industry is quite good to a big extent and the business and trade movement is flourishing in Oman which is promising and helps in improving people's incomes. The life style in Oman is not a bedwin one but on the contrary; people are very modern and they like eating in restaurants. They have different food demands and needs based on the family structure, cultural background and life style and other factors related to each group of Omani people. Oman is a country that also includes different varieties of people from different cultures and they all prefer eating outside and this will help The Italian Corner attract different types of customers from different nationalities. There are some Italian restaurants in Oman but the need for more of such types is high. (The report, 2013)

Market segmentation

The market of Oman has different customers' segments but the current project is focusing on some of them mainly families, workers, students and friend groups and tourists. This can be as shown in the following figure:

Figure 1 Customers segmentation

Market needs

The Omani market needs are different and based on the type of industry and related to hospitality and food industry, the needs of the market in Oman can be summarized as follows:

1. Receiving the best and most kind and friendly service that match with high tastes.
2. Having best quality related to all details of food and service.
3. Being welcomed and entertained specifically.
4. Relaxing and enjoying the eating experience.
5. Eating good food made with fresh clear and well known ingredients.
6. Having tasty and delicious and sufficient portions of food.
7. Eating Halal food that is well ensured and guaranteed.
8. Cleanliness and hygiene of all details and ingredients on high levels.
9. Affordable prices compared to the service level.
10. Enjoying the presentation, comfortable stay and love eye images.

Market trends

Market trends are very important for any business to start and succeed as they have to be well identified and realized in order to be followed. The current project is a restaurant for families mainly and the market trends it should focus on can be the families' needs of comfort, relaxation, being at ease, having fun and pleasure with the family, feeling safe and secured and talking freely. This is highly regarded by the Italian Corner as families have the biggest area in the place as there are areas that are separated and protected from other places in the market where families can eat and enjoy at a great ease and comfort. Other customers' scales such as students and workers are also considered by the company as there are sandwiches and snacks for easy eating and there are diet meals for those who like to keep healthy and not to gain more weight. Meals prices suit all social scales as there are cheap ones and expensive rich ones according to the needs of customers.  The business is following a marketing trend that depends on having the best and finest suppliers who can provide the restaurant with best raw materials, sauces, pasta, flour and other food ingredients in specific times without delay. The strong supply chain is meant to ensure fresh food that is clean and organic and free from bad materials. The customers' satisfaction is a great desire of the place and it is a main goal to be achieved by collecting all the positive factors that should work together to ensure it. Contracts' terms and conditions can help in maintaining the suppliers at their best performance and under control which ensures that the company is safe and well protected. Checking raw materials and supplies can make the work go right so the company depends on its managers to do such an important process. (Hoyle, 2002) 

Competitor analysis

The Italian Corner has some competitors in the Omani market; most of them are not found near the Avenues Mall although being in Muscat. The following ones are the main and most important competitors to the current project:

Trattoria Italian Restaurant & Café

The restaurant is based in Salalah towers and it is an Italian restaurant that is presenting different Italian dishes such as pasta, rositto and others. Many people like it but some complain of the taste and service.

La Fattoria Della Pizza

This is a strong competitor because it is known for its excellence and fine tasty Italian food dishes and good service and friendly place. There are some complaints from some customers related sauces and pizza ingredients.

Romano's Macaroni Grill

The place is presenting different types of pasta and grilled meat and chicken. It is famous among foreigners living in Oman and tourists. Service is good but the area is not very suitable for Omani families.

ITALIANO

The place is simple and presenting different services for buying Italian dishes such as eating in the place or home delivery or take away. Food is good but not very superb. (tripadvisor, 2016).

SWOT analysis

Strengths

The Italian corner has main strengths that can help it succeed as the following:

1. The owners of the place have studied business administration and they have a MBA.
2. Managers are professionals as well as chefs and other workers.
3. The place area is wide and well divided for families and other customer categories.
4. The staff is working in a cooperative work environment and they are well appraised and motivated.
5. There is a uniqueness in presentation, promotion and marketing strategies.
6. The location of the restaurant is strong and vivid with people.
7. Innovation and creativity are main concepts the place is based upon.
8. The small number of market competitors in Italian food service in the same area.

Weaknesses

There are some weak points related to Italian corner as follows:

1. Being a new restaurant that is not known or common among people in Oman.
2. The owners' experience is not wide or enough.
3. Costs of improving the place and of staff and managers are high.
4. Loan repay will be difficult.
5. Profits may be late than expected.

Opportunities

The opportunities the Italian Corner can have are as the following ones:

1. The uniqueness in design, dishes, chefs, managers and raw materials.
2. The good area near the Avenues Mall can provide a support for the restaurant and bring in more customers and build a good name for the place.
3. Focusing on families and providing them with what they need.
4. Having a great variety in menus and presentation.
5. Reaching success easily by the help of the effective management.
6. Providing customers with innovative ideas such as gifts for distinguished customers and surprising birthday parties for special customers.

Threats

There are some threatening points that the place should study well and consider as:

1. The existence of resembling restaurants in Oman, Muscat and the strong brand name they have.
2. Rarity of high quality Italian raw materials in some markets.
3. The probability of having problems with Italian chefs and staff. 

Strategy and implementation summary

The current project is established is Oman's capital city that is Muscat because the city is rich in tourism and shopping movements and many people like to visit the new restaurants open in Muscat. The restaurant presents the three main meals in addition to the brunch which is late lunch and snacks at any time.

Competitive edge

The current are the main competitive edge factors related to the Italian Corner:

1. Unique high superior dishes of pasta and rice and uniqueness in Italian desserts.
2. Friendly clean highly educated waiters and working men who are keen on being so kind and welcoming to all customers.
3. Focusing mainly on families and providing them with the needed atmosphere they like in addition to seating them well and in a way that they all feel at great ease.
4. Focusing on hygiene and cleanliness in all the place parts

Marketing strategy

The Italian Corner has a strong supportive marketing strategy that makes it unique compared to other market competitors. The company focuses more on different business details especially tiny details such as tables, sheets, napkins, sauces, spoons, dishes and forks as such things are so important to customers who seek superiority and quality. Hygiene and cleanliness are applied highly in kitchen and in all areas of the restaurant to ensure safety and health of customers. 

Advertising strategy

The Italian Corner depends on a promotion campaign that can help greatly in making the place well known and realized by pizza lovers and different customers' scales. Competition is high among restaurants in Muscat so advertisements about the new place have to be distinguished and supportive. According to Hardy, (2010) promotion of today depends mainly on a variety of channels that may be very modern and coping to the age advancement or traditional as mixing between the two types can lead to a successful promotion campaign. The following advertising techniques are those ones to be used with The Italian Corner:  

1. Paper and wall ads

Paper and wall advertisements will be used to be added to daily newspapers that are sent to people's homes as this method can show customers pictures of the new place and the menus they can choose food from and can also declare the offers and events the place is doing. This method can also be used in shopping malls near the restaurant as people who go shopping in malls as the Avenues Mall can have some paper ads from the place they are buying their needs such as grocery shops and others. This can make people aware that a new Italian restaurant that is beautiful and clean is opening and this will make them eager to visit it.

2. TV ads.

TV ads is a good idea in making people aware of the services and dishes of the restaurant as the image will be the tool the place is depending on as details of dishes can be shown, pictures and videos of chefs cooking can also be shown in TV ads with the nice Italian music that is found in the place as this will attract people and affect their passions to visit the place. Omani actors or sports figures can also be in such ads as they can support the place with their nice words as being customers of it. Waiters who are friendly smiling and very neat and good looking can also be shown in the TV ads to attract customers to the place.      

3. Online ads.

Online ads are the most interesting today as most people like them and follow them so there will be a great focus on them and the restaurant will use them effectively to reach as many people as possible. Omani forums will be the place where people can discuss the restaurant and its details and there will be a specialized site for the place on a high technological level showing pictures of the place and discussing how different dishes are made. The site will be linked to a Facebook page to make people aware of the restaurant. Google ads will also be used to show the place on online sites of people living in Oman. 

4. Social media ads.

The Italian corner is using social media ads to attract people who are online and focusing on them to realize the place, its concept and the dishes presenting there. There will be a site that is linked to a Facebook page and a Twitter page. Instagram and Pinterest will also be used to show pictures of the place and leave nice comments recommending it. TV ads will be shown on You Tube channels and on Facebook as well. These sites will be used for opening discussions among people living in Oman about the place and its advantages.

5. E mail newsletters and phone numbers

E-mail lists will be bought by the management of Italian Corner in order to use these e-mails and send the people bullet-in about the restaurant and its offers. E-mails newsletters will be used to make people aware of dates when the restaurant is making offers or events. Special customers will be gifted via these e-mails to make them more interested in checking them regularly. Phone numbers of customers will be used to make them acknowledged with the new dishes and updates and offers of the place. 

Brand challenges

The Italian corner may face problems and challenges when it is trying to build its brand in the Omani market. These challenges in building its new name and brand may include customers' satisfaction, employees' satisfaction, conflicts between management and owners or between employees and management and other challenges such as need for money or for new staff.  

Pricing strategy

Pricing of dishes and drinks at the Italian Corner will depend on understanding the demands of the customers, calculating costs of meals and realizing medium prices of competitors and then to decide prices of different dishes to be reasonable and profitable.

Positioning statement

Positioning of the Italian corner will be based on addressing the needs and demands of the market, customers and employees as the company focuses on stressing its position in the market with the high quality products and efficient well motivated employees and professional managers. Meals, dishes, napkins, forks and spoons will all be considered in positioning the restaurant in Oman as details are very important for customers who can help in positioning the place well.

Sales strategy

Sales in The Italian Corner are considered very important because they can make the required profit level needed for making the place successful. Profits are not to be collected in the first year but costs and loans have to be recovered.

Sales Forecast

The Italian corner is expected to have increase in sales estimated with 5% based on factors such as being known among visitors of the Avenues Mall Oman and by positioning itself using high quality and efficiency. Loyal customers can also bring other friends and relatives to the place. The promotion campaign can help a lot in making the place attractive which will be confirmed by the professionalism of its workers in presenting more than expected from customers. Coupons will be sold to interested customers who need a discount in next visits to the restaurants.

Table: Sales Forecast

Sales Forecast
	Year 1
Sales
Food and drinks Sales	RO1,638,070
Merchandise	RO5,478
Coupons	RO37,700
Total Sales	RO1,681,248
Sales Direct Cost	Year 1
Sales + Merchandise at 25.7%	RO421,053
Other	RO0
Subtotal Direct Cost of Sales	RO421,053

 Personnel Plan

Management fixed costs of the Italian corner are as follows:

Owner 1 = RO30,000

Owner 2 =RO60,000

Boss manager =RO39,000

Dining Room Manager =RO32,000

Kitchen Manager =RO25,000

Total Management Costs  =RO186,000

Management Team of the Italian corner 

Owner 1

Owner 2

Boss Manager

Dining Room Manager

Kitchen Manager

The Kitchen labor would represent 11.3% of sales. 

Dining Room labor would represent 6.1% of sales.

Payroll taxes are 10% of sales.

Table: Personnel

Personnel Plan
	Year 1
Salaries of managers	RO186,000
Kitchen Labor at 11.3% of Sales	RO185,604
Dining Room Labor at 6.1% of Sales	RO99,834
Total People	65
Total Payroll	RO471,438

Financial Plan

The financial plan of the Italian restaurant is made in order to meet the financial needs of the company and balance them and it is based on the following:

1. The growth of the place is expected to be moderate and the cash flow is to be steady.
2. Increasing of sales is expected to be 4% yearly.
3. There may be an increase in costs estimated with 1% to 2% yearly.
4. Maintenance and repairing works will be kept up in order to get a solid operation.  

Table: General Assumptions

General Assumptions
	Year 1
Plan Month	1
Current Interest Rate	5.50%
Interest Rate Long-term	9.50%
Tax Rate	22.03%
Other	0

Projected Profit and Loss

The profit margin is the most important part in the projected profit and loss statement as the first year, it doesn’t show much change or jump in a dramatic way but within time, it is supposed to raise as a result of the restaurant success and development and building a good name and a reputation.

Profit and Loss
	Year 1
Sales	RO1,681,248
Direct SALES Cost	RO421,053
Other Costs related to Goods	RO0
Total sales Cost	RO421,053
Gross Margin	RO1,260,195
Gross Margin %	74.96%
Expenses
Payroll	RO471,438
Promotions of Sales and Marketing	RO0
Depreciation	RO66,144
Discounts of Credit Card	RO21,692
Advertisement	RO104,142
Rent Fixed Rate	RO112,200
Utilities 2.4% of Sales	RO40,350
Insurance	RO35,304
Costs of papers	RO30,262
Coupons cost	RO158,555
Trash Disposal	RO1,500
Uniforms of workers	RO3,000
Telephone costs	RO3,000
Maintaince cost	RO13,500
Smallwares	RO1,500
Outside Services	RO3,000
Cleaning and washing	RO11,769
Menus and checks cost	RO1,200
Laundry and sheets	RO1,500
Music and games	RO1,500
Advertising	RO1,500
Over/Short	(RO180)
Professional Fees	RO4,500
Taxes & Licenses costs	RO1,980
Bank Charges	RO936
Control	RO1,500
Payroll Taxes	RO70,716
Expense of office work	RO3,900
Other	RO2,100
Total Operating Expenses	RO1,168,508
Profit without Interest and Taxes	RO91,687
EBITDA	RO157,831
Interest Expense	RO56,050
Incurred Taxes	RO7,868
Net Profit	RO27,769
Net Profit/Sales	1.65%

Cash flow

Cash Flow
	Year 1
Cash that Received
Cash gained from Operations
Cash of Sales	RO1,681,248
Subtotal Cash got from Operations	RO1,681,248
Additional received Cash
Sales Tax, Received	RO0
New Current Borrowed	RO0
New Other Liabilities from interests	RO0
New Liabilities Long-term	RO0
Sales of different Current Assets	RO0
Sales of Assets Long-term	RO0
New Investment gained	RO0
Subtotal Cash gained	RO1,681,248
Expenditures	Year 1
Expenditures from different Operations
Cash Spend	RO471,438
Bill Paid	RO1,053,685
Subtotal Spending on Operations	RO1,525,123
Additional spentCash
Sales Tax, Paid Out	RO0
Principal Repayment of Current loans	RO0
Other Liabilities Principal Repaid	RO7,500
Long-term Liabilities Principal Repaid	RO26,664
Purchasing Other Current Assets	RO0
Purchasing Long-term Assets	RO0
Dividends	RO0
Subtotal spent Cash	RO1,559,287
Net Cash Flow	RO121,961
Cash Balance	RO211,961

Balance sheet of the Italian corner

Projected Balance Sheet

The current projected Balance Sheet of The Italian Corner is solid. It is not anticipated to meet the debt obligations providing that the company's specific goals are well achieved.

Table: Balance Sheet

Balance Sheet
	Year 1
Assets
Current Assets
Cash	RO211,961
Inventories	RO39,382
Other Current different Assets	RO10,000
Total Assets	RO261,344
Assets of long term
Assets of long term	RO547,600
Accumulated Depreciation	RO66,144
Total Assets on long term	RO481,456
Total Assets	RO742,800
Liabilities as well as Capital	Year 1
Current Liabilities
Accounts Payable	RO91,595
Current Borrowed	RO0
Other Current Liabilities	RO67,500
Subtotal Current Liabilities	RO159,095
Liabilities of long term	RO573,336
Total Liabilities	RO732,431
Capital that is paid in	RO0
Earnings that are retained	(RO17,400)
Earnings	RO27,769
Total Capital	RO10,369
Total Liabilities and Capital	RO742,800
Net Worth	RO10,369