Assignment on project management

Topic: To setup a fast food outlet in south Mumbai.

By Karan singh bhella Roll no : B -07 MMS Marketing - Sem IV

TABLE OF CONTENTS Sr.No. 1. 2. Tile Chapters Page No.

.............................................................................................................................2

Introduction ................................................................................................................2 A Product / service ...............................................................................................3 B Technology ........................................................................................................5

3.

Cost of project A Land ..................................................................................................................6 B Plant and machinery ........................................................................................7 C Building .............................................................................................................8 D Preliminary & pre-operating cost .................................................................8 E Margin money ...................................................................................................9 F Contingencies ...................................................................................................9

4. 5. 6. 7. 8.

Means of financing ......................................................................................................9 Performance assumptions ...........................................................................................9 Profitability.................................................................................................................10 Commercial ................................................................................................................10 Environment problems ..............................................................................................11

Executive summary:
The rapid rate at which the fast food industry continues to add outlets is as much a reflection of consumer demand for convenience as it is a reflection of demand for fast food itself. Fast-food outlets have become popular with consumers for several reasons. One is that through economies of scale in purchasing and producing food, these companies can deliver food to consumers at a very low cost. In addition, although some people dislike fast food for its predictability, it can be reassuring to a hungry person in a hurry or far from home. The Indian economy is becoming increasingly service-oriented, and over the past several decades, the foodservice industries that offer the highest levels of convenience have been rewarded with strong sales growth. In the face of rising population, incomes and increasingly hectic work schedules, a nearly insatiable demand for convenience will continue to drive fast food sales. The business plan that we trying to set up here include the items like burgers, sandwiches, soups and rice .and elaborate menu would be further explained in the product section. There would be a requirement of updated technological devices, cooking range, equipments for cooking. The cost of the project would include the cost of land & building, machinery, equipments, preoperating expenses, cost of the technology and other expenses. To make a successful fast food outlet it is necessary to know your target market, are you targeting the family crowd, teenagers or seniors? Knowing your target market before you start planning will not only help you solidify your menu. Selecting a Service Style & Food Concept What type of restaurant do you see yourself owning. Typically, your service style will either be fast-food, which offers food types that range from burgers, fries, soups and sandwiches; midscale, which has full course meals at value. Create the Menu The menu can make or break a restaurant, and should be in accordance with the overall concept of the restaurant. Revisit the business plan to make sure the menu is attractive to the target market, is affordable within specified budget. Choose a Location & Layout It is important to find a location that has a continuous stream of traffic, convenient parking, and is in proximity to other ,Be Familiar With Safety Regulations and Hiring Employees.

1. Title: To setup a fast food outlet in south Mumbai.

2. Introduction :
Fast food is food which is prepared and served quickly at outlets called fast-food restaurants. It is a multi-billion dollar industry which continues to grow rapidly in many countries. A fast-food restaurant is a restaurant characterized both by food which is supplied quickly after ordering, and by minimal service. The food in these restaurants is often cooked in bulk in advance and kept warm, or reheated to order. Many fast-food restaurants are part of restaurant chains or franchise operations, and standardized foodstuffs are shipped to each restaurant from central locations. There are also simpler fast-food outlets, such as stands or kiosks, which may or may not provide shelter or chairs for customers. Because the capital requirements to start a fast-food restaurant are relatively small, particularly in areas with non-existent or medium income population, small individually-owned fast-food restaurants have become common throughout in India. Generally restaurants, where the customers sit down and have their food orders brought to them, are also considered fast food.

The Fast Food Restaurant Market is a growing industry in India relying heavily on the changing lifestyle patterns, population growth of the target age group and the related increase in employment of women. With today's hectic lifestyles, time-saving products are increasingly in demand the most obvious being the fast food. The rate of growth in consumer expenditures on fast food has led most other segments of the food-away-from home market for much of the last one decade. Demand for convenience has driven expenditures where people want quick and convenient meals; they do not want to spend a lot of time preparing meals, travelling to pick up meals, or waiting for meals in restaurants. As a result, consumers rely on fast food. Knowing this, fast food providers are coming up with new ways to market their products that save time for consumers.

The fast-food industry is popular in India, the source of most of its innovation, and many major international chains are based there. The presence of multinational fast food chains like McDonalds, KFC, Pizza Express, Pizza Hut, Subway etc. have somewhat catered to the high income segment therefore developing a niche as upscale fast food restaurants. Multinational corporations such as these typically modify their menus to cater to local tastes and most overseas outlets are owned by native franchisees to ensure that cultural, ethnic, and community values are taken care of.

a. Product /service : Our main Proposed Product Mix The proposed project is assumed to provide customers with a variety of fast food items as outlined in the following menu:

Soups Hot Soup Chicken Soup &

Burgers Sour Chicken Burger

Rice Chicken Rice

Sandwiches Fried Chicken Sandwich Egg Sandwich

Extras Cole Slaw

Corn Chicken Cheese Egg Fried Rice Burger Cheese Burger Vegetable Rice Zinger burger Schewan rice

French Fries

Fried Club Sandwich

Soft Drinks

fried Vegetable sandwich

Sauce chutney

Combos Items Price Combo Deal 1 Zinger Burger / French Fries / Regular Drink Combo Deal 2 Chicken Burger/ French Fries / Regular Drink Combo Deal 3 Club Sandwich / French Fries / Regular Drink

b. Technology: In order to make speedy service possible and to ensure accuracy and security, many fast food restaurants have incorporated hospitality point of sale systems. This makes it possible for kitchen crew people to view orders placed at the front counter or drive through in real time. Wireless systems allow orders placed at drive through speakers to be taken by cashiers and cooks. Drive through and walk through configurations will allow orders to be taken at one register and paid at another. Modern point of sale systems can operate on computer networks using a variety of software programs. Sales records can be generated and remote access to computer reports can be given to corporate offices, managers, trouble shooters, and other authorized personnel. Food service chains partner with food equipment manufacturers to design highly specialized restaurant equipment, often incorporating heat sensors, timers, and other electronic controls into the design. Collaborative design techniques, such as rapid visualization and parametric modelling of restaurant kitchens are now being used to establish equipment specifications that are consistent with restaurant operating and merchandising requirements.

Collaboration: Nil

The business plan would be a new setup so no collaboration would be done with any existing fast food chain. A new brand would be created with a new menu with a unique name and logo.

3. Cost of project :
The cost of project would include the cost of the land purchased in the area of south Mumbai, furniture in the outlet & stationery cost, machinery for preparing the food items. Construction Cost (all inclusive) Rs 13, 00,000 Dining & Office Furniture Rs 540,000 Equipment & Machinery Rs 965,000 Advance Rent Rs 12,00,000 Preliminary Expenses Rs 50,000 Working Capital Rs 10,00,000

a. Land : Land Requirement The land requirement is around 2,000 sq.ft. In densely populated area where all utilities and facilities are properly available. It is recommended that the fast food outlet be opened on the ground floor of flats or shopping mall wherein the consumer traffic will be a maximum. The more the shop is near the main road the better sales potential it will have.

Dedicated Area Requirement The floor space needs to be carefully allocated to allow for maximum dining space for customers in rush hours. The allocation of space between different sections would be as follows: The proposed premises will be acquired on a rental basis with 6 month deposit and 6 months advance rent after which rent will be payable on a monthly basis. The monthly rent is approximately Rs. 50/ Sq Feet for the ground floor which would amount to Rs. 100,000 per month for the proposed fast food outlet (2,000 Sq Ft.)

Reception & Owner Office To allow for maximum space for dining and security concerns (Cash control) it is recommended that the owner should manage the reception counter as well as all cash handling emanating from the tables. Therefore a total of Rs. 50,000 would be required to erect the reception and cash counter along with the take-away order taking booth
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b. Plant and machinery : Understanding the customers individual needs and the capability to satisfy these completely is a vital part of the restaurants success. This is in turn dependent on the machinery and equipment used to produce good quality fast food. Fast Food Machines are easily available in the market wherein the owner has to choose between expensive brands and cheaper ones depending on how much he can afford to give quality to his customers. Secondhand equipment of world leading brands such as SPINZER, FRYMASTER, HENNY PENNY, LINCOLN, AYRKING, KEATING, MIRROR, CARPIGIANI, LINCAT, MORRETTI, ILSA, ROUND-UP, SANYO, are available while cheaper Chinese brands have gained popularity over the years. The machines can be ordered through international vendors with a minimum delivery period of 3 months while refurbished / reconditioned machines are also available. Some outlets closing their business also tend to sell their machinery at low prices but the durability and reliability factor must be taken into consideration while buying such machines. The typical fast food restaurant as outlined above would require the following machine /equipment for its operations: Items: Freezers Deep Well Frier (Single Valve With 2 Baskets) Hot Plate for Burgers & Sandwiches Bin Marry Soup Container (2 Valve With Steel Cabinet) Microwave Working Tables Keg Racks & Shelves

Machinery Maintenance All machines require routine cleaning and maintenance after every three months and an annual service which costs around 1% to 5% of the total cost depending upon the use of the machine and operator's skill. We have assumed an average of 2.5% of the depreciated cost as the annual maintenance cost.

c. Building (lump sum) : Nil

d. Preliminary & pre operating expenses : Cost of the dealing with the contract, clearing of the documents, hiring the staff, electricity and telecommunication cost. Advertising cost, promotions. Lump sum amount of these expenses would be around Rs 20, 00,000 lakhs . HUMAN RESOURCE REQUIREMENT: The human resource requirement for the general and management staff are as follows: Kitchen Supervisor Shift Supervisor Cook Servers Take Away Order Taker / Cashier Dishwasher Cleaner Guard (12 Hour) Utilities Requirement: The following table presents the assumed breakup of utilities on a monthly basis: Utility Monthly Charges (Rs.) Electricity 25,000 Water 2,000 Gas 15,000 Telephone 10,000 Total 52,000 As depicted above the most of the fast food machines require considerable gas during the preparation process. The preheating procedure of the equipment before commencement of preparation also consumes considerable gas. It is assumed that utilities expenses will be increased by 10% every year.

e. Margin money :

f. Contingencies (10% of assets) Total of A-G = cost of project is Rs

4. Means of financing
Out of the total cost of the project the 60 % loan would be secured by bank while 20 % would be unsecured loans by private financer , 20% would be self investment .

5. Performance assumptions
a. Capacity :the business will be run on full capacity with the help of advertising and

promotion the profits will be calculated on the targets.

b. Costs Raw Material the stock will will be refreshed daily because of the perishable items and to keep the food healthy it would be around 50,000 daily Salaries & wages 100000 Utilities 50000 Over heads 200000 Sales and general admin costs 300000

c. Sales 3000000

6. Profitability
Sales 3000000 -cost 1000000 Gross profit 2000000 - Depreciation 200000 -interest 50000 Net profit 1750000 -tax 250000 PAT 1500000

7. Commercial
Demand : In todays world there are three things that will never go out of the market, shelter, food and clothing. People may or may not spend on the other things but food is something people dont mind spending on food . looking at the growing population , the customer rate will also be increasing . more so ever todays generation like to eat out or snack on fast food items . the fast food industry is growing , people like to go out for eating , to satisfy their hunger by snacks available in the market . at times going to a fast food joint is mere time pass for the teenagers to have a good time with good food. So in all the demand for the fast food items in the market is at a good & steady rate.

Distribution : Inbound logistics: the collection of the raw materials, spices and the materials required to prepare the food items would be collected on the monthly basis with the help of a mini truck to load the stock and bring it to the outlet , whereas the fresh vegetables would be bought every day because of the perishable factor of the vegetables , going to the food market daily early morning t get the stocks replenished .
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Outbound logistics: the business of a fast food chain outlet is such in nature that a customer has to come to the outlet to consume the food, only when a customer places order for home delivery then a delivery boy could go to the customers house by motor cycle or walking if in close vicinity. The home delivery orders would also be considered only if the order exceeds more than 250 Rs and lies within the area of radius 5 km.

Sales promotion : The fast food outlet requires lot of advertising so as to make the people aware that the outlet is in the market, without making a effort to make a brand awareness among the masses it would be difficult for the business to run. Pamphlets would be distributed within the area of the outlet in the residential areas or to general commuters with the outlet logo, address and contact no, with the menu printed on the back side of it. Danglers or point of purchase (POP) could be hanged inside the outlet or in the vicinity of the area which could display the pictures of the food and the special combo offers that we are going to offer. Special discounts can be given to the first few customers so as to gain loyalty and to make the customer happy. Ads can be printed in the local news paper or the leaflets can be distributed in the newspaper getting distributed in the area of the outlet. Special events can be done on some specific days in the outlet like FREAKY FRIDAY Wherein discounts would be good on each item or do a billing of more than 1000 Rs to get a 5 % off on the whole bill.

8.

Environmental problems :
As such the business of the fast food outlet does not harm the environment in any particular kind. Still care would be taken that the kitchen of the outlet does not produce smoke in a exceeding limit for that condition kitchen chimneys would be installed in the cooking area. The waste in the kitchen would be segregated in 2 sections, degradable and non degradable waste so that a proper disposal of the garbage can be done without harming much to the environment.

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