A BUSINESS PROPOSAL

ON
FAST FOOD CAFÉ

“Chav”

Prepared by:

Vijay Sahu
 Abstract

In today’s context fast food business is regarded as one of the most popular
business venture with immense opportunity. Yet, concerns about health issue and
busy schedule is the challenge. This fast food business proposal shall meet the
ongoing challenge that currently fast food restaurant in Mumbai are facing. Fast
food is a privately held fast food restaurant with prime objective to provide
comparatively hygienic food to people at an affordable price. With scientific market
survey on eating habit and and current status of fast food restaurant, fast food aims
to be the leading fast food outlet and expanding beyond.

The outlet of fast food will initially be established at Mulund (W) area targeting
mainly office worker and students as well as local people further more extending
branches in Mumbai city. With the help of market research, strategic planning on
operation, marketing and pricing, we shall overcome the hurdle of today’s fast food
challenge. Our goal is to become the best-loved and most competitive fast food
chain in Mumbai with leading brands across all major market sectors. We strive to
ensure the continued happiness of our customers, staff and shareholders, and to
benefit our communities.

We believe in delivering innovation consistently, market insights and leadership in

the areas of service excellence and professional management, we are committed to
providing the public with fast food services which are healthy, delicious, value for
money and impeccably safe.
Table of Content
1. Introduction

1.1 Background:

1.2 Objectives

1.3 Mission

1.4 Methodology

1.5 Ownership/ Shareholders

1.6 Products and Services

1.6.1 Product Description

2. Operational Plan

2.1 Location and Facilities

2.2 Human Resource Plan

2.3 Business Operation

2.4 Supply Management

2.5 Waste Management

2.6 Inventory Policy

3. Marketing Strategy

3.1 Target Market

3.2 Pricing Strategy

3.3 Promotional Strategies

4. Financial Planning

5. SWOT Analysis

5.1 Strength

5.2 Weakness
5.3 Opportunities
5.4 Threats
6. Feasibility Study 7. Conclusion
 1. Introduction

1.1 Background:

The world is moving fast, people are getting busier every day. Now people have no

longer time to sit and wait hours for preparing meal. Despite busy schedule people

has to eat, which lead to the concept of ready cooked food for sale. Along with the

economic growth, people started to spend more and buy more as the economy

boomed and a culture of consumerism bloomed. As a result of this new desire to

have it all, both members of the household began to work outside the home. Eating

out, which had previously been considered a luxury, became a common occurrence,

and then a necessity. Workers, and working families, needed quick service and

inexpensive food for both lunch and dinner. This need is what drove the

phenomenal success of the early fast food giants, which catered to the family on the

go (Franklin A. Jacobs).Fast food became an easy option for a busy family, as is the

case for many families today.

However, despite the ease, the fast food has come under the criticism concerning

negative effect on health. With the aim of complying with busy schedule and health

concern, Chav is a fast food outlet opened to fulfill these requirements. Chav will

provide a combination of excellent food at value pricing, with fun packaging and

atmosphere. Chav is the answer to an increasing demand for hygienic fast food.
1.2 Objectives

The main objective of Chav is to establish successful and most competitive fast food

chain in Mumbai with leading brands across all major market sectors by providing

comparatively hygienic food to people at an affordable price. We also aim to deliver

consistent innovations, market insights and leadership in the areas of service

excellence and professional management, we are committed to providing the public

with fast food services which are healthy, delicious, value for money and impeccably

safe.

1.3 Mission

Our Mission is to provide a unique and relaxing eating experience – similar to at

home. We will strive to achieve this goal by:

• Providing menu items incorporating quality ingredients at reasonable

prices, and
• We will be mindful of the well-being of our customers and staff– treating

each and every one with dignity and respect – just like we would at our

own home.

• We strive to ensure the continued happiness of our staff providing them a

consistent motivation by giving some incentives and rewards for their

work. This will ultimately benefits our company leading it to the peak of

excellence.
1.5 Ownership/ Shareholders

Chav is a privately held restaurant. It will be registered as a Limited company under

PAN regulation of Mumbai Government and is to be opened in a joint ownership of

Kuldeep Karkera and Vijay Sahu initially investing on the startup. Later the shares of

the company will be distributed to the employees to motivate them and developing

the sense of ownership. We believe in mutual understanding between owners and

employees.

1.6 Products and Services

Chav focuses on hygienic foods and sophisticated eating environment with the

facility of fast service and Wi-Fi.

1.6.1 Product Description

Chav will provide the best of the menu around central Mumbai. Our primary focus is

to provide Nashik original misal that consumer can enjoy away from home as they

can easily carry and enjoy it at any place. Below are the food items and the

categories that will be served at Chav:

Food Items:

Other services:

• Great customer service

• Clean environment.
• Strategic promotion offers
• Wi-Fi
• Mobile charging service
2. Operational Plan

2.1 Location and Facilities

Chav locations will range in size from 250 – 300 sqft and will seat from 15 – 20

guests. Our location will be on the larger end of this range. We will equip the

outlet with modern furniture and aim for cleanliness and an open feeling.

The space selection will be chosen based upon the following criteria:

• Community size: minimum of people within a radius of 8 kilometers.

• Large number of office and colleges
• Easy access
• Large percentage of teenagers in the community

All of these qualities are consistent with Chav goal of providing a top quality fast

food experience. We want "word-of-mouth" to be our best form of marketing,

where our customers value our brand as something exciting and cannot wait to tell

their friends and neighbors.

2.2 Human Resource Plan

Chav is a partnership business with two people: Kuldeep Karkera and Vijay Sahu.

They will be working together side by side as owners of Chav. The business will

run with full cooperation and information sharing between the owners and the

hired staffs as well. There is no distinct power distribution and job separation

between the owners of this company. Full transparency will be maintained between

owners regarding any kinds of actions and decisions made by them.

The salaries of the owners and employees are not specified since the company is

run under their investment and loan, and they are liable for all the profit or loss

the company makes. The details of the employees that Chav will hire initially are
given in the table below:

Employee Monthly
Job Description Qualification/Experience
Post/No. Salary

Restaurant • Rs. • Recruiting, training and supervising Minimum 3 years of work

Manager 8,000 staff experience in relevant field.
(2) • Agreeing and managing budgets Bachelor degree in hotel
management. Must be able
• Planning menus to
• Handling customer enquiries and conduct job description.
complaints

• Ordering supplies
• Problem solving
• Preparing and presenting
staffing/sales
reports
• Keeping statistical and financial
records

5 years of work experience

Head Rs. 25,000 • Handling the preparation of the pre in
Chef(1) • listed food and items related field with creativity.
• Preparing menu Must be able to prepare
• Executing price menus and execute it.
• Managing kitchen
• Preparing food routine

Assisting and helping Head Cook 3 years of work experience

Assistant Rs. 9,000 • on in
Chef (1) • preparation of food related field.
• Managing kitchen in the absence of
• Head Chef
• Managing orders
 • Training kitchen staffs

2 years of work experience

Kitchen Rs. 7,500 • Helping chefs for preparing foods in
Helper (2) • Performing kitchen duties (cleaning relevant field.
utensils, chopping vegetables, etc.)

Cleaner (1) Rs. 7,000 No experience needed

Table 1: Personnel plan for Chav

Figure 5: Hierarchical Chart of Human Resource Planning

2.3 Business Operation

What is Chav?

Chav is a new innovative Nasik missal outlet which full fill today’s need of fast

service with hygienic food. Using the concept of home cooked food, we serve

people authentic missal with different varieties. Our outlet provides clean and fun

ambience. We open every day and serve quality food with variety.

Chav Service Schedule:

The restaurant will be open every day with hours as follows:

Sunday 10:00 am – 10:00 pm

Monday 10:00 am – 9:00 pm

Tuesday 10:00 am – 9:00 pm

Wednesday 10:00 am – 9:00 pm

Thursday 10:00 am – 9:00 pm

Friday 10:00 am – 10:00 pm

Saturday 10:00 am – 10:00 pm

2.4 Supply Management

Supply management is one of most crucial part of the fast-food business. Proper

supply management plays great role in the success of the restaurant. Chav shall

implement the most effective procedure of supply management using vendor. Open

lunch shall recognize, negotiate and choose the vendor of high standard. For

different kinds of products different kinds of supply management is undertaken.

A Vegetables
At just about few kilometers from the Chav location, there is a vegetable wholesale

market near Mulund E station. It has now become the alternative for the biggest

fruits and vegetable market in the city. Among the wholesaler we will choose the

most effective one to supply for our fast food.

Our vendor shall deliver the order requested by the kitchen. We shall have bank

transection at the end of the month for all the delivery.

B. Dairy Products

C. Other Miscellaneous Food Materials

2.5 Waste Management

The fast food restaurants are the main sector that produces maximum amount of

wastage, whether it is compostable or non-compostable. The production of waste

from restaurants is obvious but managing and reducing the waste is the major

challenge for any restaurant.

Chav’s focuses on waste reduction and waste management by utilizing the existing

waste in the best possible way. We have planned to achieve this by doing the

following actions:
Motivate an individual employee to be responsible for Managing the Garbage
Chav will carry-out different activities to motivate and educate every concerned

employee (Kitchen staffs and cleaners) of restaurant about monitoring, storage and

recycling of waste products as they are familiar with the amount of wastage produce

daily from kitchen. So it will become easy to manage the waste.

Restaurant Waste Audit – Monitoring and Analysis of Garbage

Monitoring and analyzing the garbage and preparing an audit/record regarding its

quantity will be helpful for managing the waste.

Identifying Quantity of Different Types of Waste

Identification of waste products, whether it is decomposable, non-decomposable or

recyclable will be the best action that will help us to categorize the waste, and then

utilizing it all in a best possible way. Chav will supply decomposable wastage to local

recycler where they can produce compost manure, and utilize it in an agricultural

field.

2.6 Inventory Policy

Chav’s policy is to minimize the amount of inventory as far as possible. Initially, all

kinds of products will be purchased in small quantities. The in-flow of customers and

their demand of different kinds of products during the evaluation and testing period

of three months will be analyzed and the future need for inventory of goods will be

anticipated. The inventory policy of Chav is closely comparable to JIT (Just-In-Time)

inventory technique.

We will also install advanced storage facility in our restaurant to preserve food for

long time without any degradation. Similarly, we will make a policy of day to day
purchase order to minimize waste and increase the quality of food.

The basic ground that supports this inventory policy of Chav is the close proximity

of its suppliers. All of its suppliers for all kinds of products including preserved

goods and fresh groceries are located within the radius of 2 kilometers from the

facility location of Chav groceries. Chav will purchase the products in quantities just

enough to save the transportation cost.

3. Marketing Strategy

Our strategy is based on serving our markets well. We will start our first outlet as a

"market tester" that could become a model of the expanding number of outlets in

the future. Concentration will be on maintaining quality and establishing a strong

identity in the local market.

To succeed in this business we must make the following market strategies:

• Create a unique, innovative, entertaining menu that will differentiate us

from the rest of the competition.
• Control costs at all times, and implement a conservative approach to
growth policy.

• Sell the products that are of the highest quality, as well as keeping the
customers happy with all of our product category.
• Provide 100% satisfaction to our customers and maintaining the level of
excellent services among other competitors.
• Encourage the two most important values in fast food business: brand and

image, as these two ingredients are main drivers in marketing

communications.

• Promote good values of company culture and business philosophy.

3.1 Target Market

Since our service is mainly targeted for the office people and students, we are

currently looking at several possible sites in Mulund E, Mumbai.

Mulund E is mainly an upscale residential area with schools, shopping complex and

small street shops

3.2 Pricing Strategy

Price is another factor that plays crucial role in the business and our fast food is no

exception. Customer flow, company’s profit, company’s growth, company’s decline

and eventually company’s long term sustainability all depends on the price of the

product. Any bad decision on the pricing strategy might be the downfall of the

whole company. Understanding all these factor pricing strategy requires detailed

study and research. Several fast food restaurant are pricing their food product in

comparison with other fast food restaurant without any detailed research on

targeted customer expenditure pattern and capability and also not using any kind of

pricing strategy. Whereas fast food restaurant using simple cost-plus strategy are

adding unreasonable amount of price over their total cost neglecting the factor of

value pricing.

We on the other hand will be using simple cost-plus strategy and also considering

other factor like customer expenditure capability, raw material fluctuation, and also

cost effective raw material purchase without compromising on the quality of the raw

material. We will also consider value pricing strategy to make our price more robust.

After analyzing our survey on the cost of raw material, existing fast food restaurant’s

price, fixed cost and other overhead cost we will be able to price our product at

15% less than the average price of existing fast food restaurants. Furthermore on the
long run we will be using data analysis technique to make our price more effective

and rational. We will be considering the value of our food and consider if customer

are willing to pay more, and we will also be considering other pricing strategies like

bundle pricing, customary pricing and penetration pricing underlying the simple

method of cost-plus pricing strategy.

3.3 Promotional Strategies

Organisations spend huge amount of their capital in the promotion of their business

and product. New business like ours requires promotion and publicity to attract

customer. Initially, at this stage we have planned to use cheapest and most effective

marketing or promotional tactics to increase customer awareness of Chav.

1. Grand opening promotion

The grand opening promotional event will serve as an opportunity for
inviting the customers, showing off what you’ve accomplished and building
the relationships necessary for the business. So, in grand opening event of
Chav, we have planned to provide 5% discount offer in every food items
to our customers.

2. Brochures/Flyers
We have planned to print out brochures/flyers for making customers

known about the products and service that Chav will going to provide.

3. Social Media: Facebook and Instagram

The social media is becoming the best platform for carrying out

promotional activities as it is the fastest way to flow the information to

public. So, we have chosen Facebook and Instagram, highly popular online

social media for the publicity of Chav.

4. Happy hour
We will be introducing happy hour policy to attract more customer during

lazy hour,when customer can enjoy happy hour meal in discounted price

of 20%
4. Financial Planning
Financial Planning is a crucial factor for the success and longevity of the restaurants.
Poor financial planning is known to be one of the most common killers of new
businesses. Here are some things that we need to include in our financial planning
to ensure success:
Cover all your bases and ensure that you have cash flow to see to daily and monthly
costs. Consider your options before investing in equipment, property and other
assets. Approach the hiring of staff with care. Include the marketing of your new
restaurant in your financial planning etc. Before establishing our service, we did
market research and separate the amount into different headings.
Startup Cost Estimation

Kitchen and Fixture Rs 2,00,000

Furniture Interior and

computers Rs 1,50,000

Legal Rs. 50,000

Rent (Per month) Rs. 25,000

Salary (Per month) Rs.60,000

Packaging and Stationery Rs. 50,000

Contingencies Rs. 50,000

Total Start-up Expenses Rs 5,85,000

Table 2: Start-up Expenses

Sustainability and Investment Return:

We have analyzed the existing market and customer’s choices and then have made a
relevant strategy for starting up the business with an aim to gain a lot of profit. But
it is obvious that at the starting phase it might not be possible to achieve what we
have actually thought of. We may have to face many operational difficulties and
losses and sometimes a little profits as well at beginning. So, despite of this
situation, whether company can sustain in the market or not, what will be the
sustainability plan of the company could be the biggest query. So as a sustainability
plan we have reserved certain amount of money as a backup solution for the worst
case. And also we can run our company for 2 years without any profit or unexpected
loss.
Investment Return Estimation
Average estimated daily sales= 10,000
Total monthly sales = 3,00,000
Estimated raw material cost=50,000
Management cost= 60,000
Fixed cost= 40,000
Estimated Miscellaneous cost= 25,000
Estimated Total Cost= 1,75,000
Estimated Total net profit = Total sales revenue - Total cost = 1,25,000
we will be saving 40 % of profit in expansion of the business and other will be
distributed to the shareholder quarterly.
Estimated expansion savings=40%of 1,75,000=50,000 Estimated profit distribution=
75,000

Estimated investment return time = Total investment / distributed profit= 2 years

along with expansion fund.

Exclusive of value added tax.

5. SWOT Analysis

SWOT analysis is a valuable step in firm’s situational analysis. It shows the strength,

weakness, opportunities and threats of our fast food restaurant Chav. It is a very

simple process that can offer powerful insight into the potential and critical issues

affecting a venture.

5.1 Strength

• Innovative range of foods under a roof

• Hygienic food and quick service
• Sound financial situation
• Comparatively reasonable price

5.2 Weakness

• Cannot serve food outside the location

• No branches at the initial phase
• Low marketing Budget

5.3 Opportunities

• Location : Multiple numbers of big and small organizations, schools and

households
• Easy access : Easy access for people and supply
• Health factor : More health conscious people
• Existing food outlets : Existence of high priced fine dining restaurant
• Service and Taste : Excellence service and taste
5.4 Threats

• Negative publicity arises as a new entrance

• High competition from other competitors
• Increasing price of ingredients used in fast food

6. Feasibility
The feasibility study is an evaluation and analysis of the project’s potential of

success, which is based on extensive investigation and research to support the

process of decision making.

It is an ability to complete a project successfully, taking into account

technical, scheduling, legal, and economic and other feasibility factors.

1. Technical Feasibility - The technical feasibility assessment focused on gaining

an understanding of present technical resources of the organization and their

applicability to the expected needs of the proposed project. In Chav we have

planned to install a computer system for maintaining a database to store the

data related to our daily activities (Inventory Records, Cashflow Records etc.).

Since all the owners of Chav have technical knowledge, use of computer

system will not be the issue. So, Chav is technically feasible.

2. Economic Feasibility - The purpose of the economic feasibility assessment is

to determine the positive benefits to the organization that the proposed

project will provide. It includes quantification and identification of all the

benefits expected. This assessment typically involves cost and benefits

analysis. We have estimated all required financial expenses needed for the

startup of Chav and analysed that our business can probably make higher

profit than the cost in future. So, we can consider Chav to be economically

feasible.
3. Legal Feasibility - Legal feasibility measures the legal implications and ethical

considerations that business have to follow before starting any project. Chav

have taken permission from the Industry ministry to establish our business by

accepting the legal written provisions. We have also followed the rules

regarded to social media.

4. Operational Feasibility- Operational feasibility measures of how well a

proposed project solves the customer’s needs, expectations and how it
satisfies the requirements identified in the market analysis phase. Chav have
tried to consider each and every expectation of customers regarding fast
service, hygienic food and other services. So, Chav is operationally feasible.
5. Scheduling Feasibility- It is an estimation of how long the project takes time
to complete and if it can be completed in a given time period then project is
said to be scheduled, hence feasible. We have targeted to finish our task to
establish our Chav within three months.
7. Conclusion

Despite the fact, today’s fast food are battling criticism over the health issues, fast

food business is flourishing. People being busy, both husband and wife working, and

increase in the income has created the culture of outdoor eating. Thus fast food

business has immense opportunity. Grasping the opportunity, minimizing the

criticism and creating food variety is today’s fast food greatest challenge.

Considering all these factors and analyzing the sample we collected, we have an

idea of innovative fast food chain i.e Chav. With innovative hygienic food menu,

variety considering people’s taste along with meeting people’s busy schedule and

reasonable price, Open lunch will change the trend of existing fast food.

Chav first outlet will be Mulund E, targeting office workers, students and local. From

the survey we found there is chance that we can invite maximum number of people

as our customers. From financial perspective, since we are not taking loans and we

are investing on our own, it is feasible. The partnership between owners and

employees maintain the equal power distribution between all that leads the better

relationship between owner and employees.