La Trung kien

Lu Cam Ha

Group Business Project

Project description

The”Viet’s Restaurant”- Traditional Vietnamese Restaurant will be a moderately priced with more than 50 seats restaurant offering family style food and service. Noodle soup, steaks BBQ (Vietnamese style), spring rolls and salads are all on the menu. We will offer specialty selections including a lighter options and smaller portions for a children’s menu.

Vietnam culinary diversity and unique capital. In it there are some foods that are considered proprietary Vietnam, the Viet restaurant will be place you must to visit to try out all those things.

The idea of our business is the blending of space and ancient rustic of ancient Vietnamese people, combined with dishes and taste combinations of Vietnam and the Philippines.

Our restaurant has a combination of architecture and Vietnamese cuisine make customers feel comfortable, enjoy the space, ancient architecture, customers will enjoy dishes imbued with Vietnamese nature, right in the heart of Manila, Robinson Place - Ermita.

The business intend to obtain finance from internal and external equity in the amount of more than Php2,000,000, for which the application will be for commencing work on shop renovation, kitchen equipment purchases and other equipment , also food materials and as operating cash flow. Preliminary capital injection has already been secured by the initial owners, La Trung Kien and Lu cam Ha, in the amounts of Php7,500,000 on each partner. And the rest will be Long-term bank loans from BPI

Mission:

-To sell delicious and remarkable food and drinks. That the food and drink we sell meets the highest standards of quality, freshness and seasonality and combines both modern-creative and traditional Vietnamese styles of cooking.

- To consistently provide our customers with impeccable service by demonstrating warmth, graciousness, efficiency, knowledge, professionalism and integrity in our work.

-To have every customer who comes through our doors leave impressed by Viet's and excited to come back again.

-To create and maintain a restaurant that is comprehensive and exceptional in its attention to every detail of operation. Viet's is a great place to eat, combining an intriguing atmosphere with excellent, interesting food.

-The mission is not only to have great tasting food, but have efficient and friendly service because customer satisfaction is paramount. We want to be the restaurant choice for all families and singles, young and old, male or female. Employee welfare will be equally important to our success. Everyone will be treated fairly and with the utmost respect. We want our employees to feel a part of the success of Viet's Restaurant. Happy employees make happy guests.

Vision:

The Vision of Viet’s Restaurant is to be in the top 3 of Vietnamese restaurant in Philippines. Not about the number of the branches, it is about being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in Viet's restaurant enjoying of what they pay for.

Supplier:

- Vendor: robinson including supermarkets, meat and fresh ingredients will be imported at slaughterhouses and farms gathered in Cubao if bought in bulk and often will get discounts and delivery ... saving costs.

Objectives

Viet's Restaurant's objectives for the first three years of operation include:

First year:

-Keeping food cost fewer than 40% revenue.

Keeping employee labor cost between 24-29% of revenue.

Stay as a small restaurant with excellent food and service.

Averaging sales between Php3,500,000-3,800,000 per year.

Second year:

Promote and expand Leave it to Robinson Ermita

Achieve 10% return on investment to investors for the first two years

Averaging sales between Php4,500,000-5,800,000 in year.

Next three years:

Averaging sales between Php5,500,000-6,800,000 in year.

Expand our marketing and advertising in metro Manila

Competitors:

The restaurant has a long reputation in the market had a volume steady clientele.

Especially the restaurant business with various Vietnamese cuisine.

-Pho Hoa:

Founded nearly three decades ago on the principles of exceptional value, quality and service, Pho Hoa Noodle Soup operates what is today the largest Vietnamese fast-casual dining chain in the world.

Grown into an internationally recognized brand with over 70 restaurants operating in 7 different countries (more than 30 branches in Philippine). Pho Hoa Noodle Soup continues to differentiate their brand with innovative products and a health conscious menu.

Pho Hoa targeting to the middle to high-income customer, with the average price for each item in the main menu from Php 250 - 400. Although the price is high but also go with pretty good quality copper, as service, food quality and location make quite satisfied customers. Under evaluation, raw material prices have accounted for 35-45% of the price of dish

-Pho Bac: Following not far behind in terms of popularity is Pho Bac. Pho Bac has often been compared with Pho Hoa. Even if a lot of customers still prefer Pho Hoa, Pho Bac has its own unique offers.

Noticeably, the Pho Bac restaurant interior feels a little homier than most Pho Hoa branches. Pho Hoa has a casual air, while Pho Bac feels cozier. A lot of pho lovers seem to prefer the casual atmosphere for eating pho because it livens up the experience, but the Pho Bac locations have their own appeal.

With 27 branches and still growing up, they have a stable customer base, pho bac is one opponent rather heavyweight.

The other competitors also include others local restaurants around the place. Including the Filipino traditional-style restaurant and restaurants from others country like Korea, Japan , China, etc.

Target Customers:

- In kind of selling food service we’re welcome to all diners who want to have nice and quality meal , to try out the Vietnamese food and new kind of taste and culture.

- The restaurant focuses more on young client components of the middle class students and officer, because young people will be more interested in trying new dishes from land but other countries and new taste

- Domestic customers and clients locally:

+ People who shopping in the Mall

+ Student and teacher come from schools around

- Vietnamese tourist and the Vietnamese around the location (small part)

The restaurant will be located at 2nd Floor Robinsons Ermita, metro Manila.

So in This location we're focusing to offices and schools surrounding, like Philippines General hospital, UP, st Paul, PCU, PWU ...etc.

- Surrounding this Place also concentrated a large number of Vietnamese in the area as Quirino, Vito Cruz, as well as the Embassy of Viet nam located in Vito Cruz not far from restaurant location.

Menu

main:

- Steamed sticky rice

- Rice noodle soup (Best ever!)

+ Half done beef

+ Chicken

- Chicken ,shrimp and pork BBQ Viet's style (Best ever!)

- Spring roll (Best ever!)

- Grilled fish ball

- Mixed Fried rice

- Rice gruel

+ Fish

+ Chicken

+ Eel

+ oysters

- Cooked with sauce

+ Chicken

+ Pork

Soup:

- Sweet and sour fish broth

- Sour lean pork soup

- Lean pork & mustard soup

- Beef & onion soup

- Crab soup

Salad:

- Shrimp salad

- Special Mix salad

- Chicken salad spicy

Drink:

- Juices

- Beer

- Ice tea

- Hot Green tea (Viet's style)

- Cola

- Viet's Coffee

The restaurant will be open 7 days a week with hours as follows:

MondayTuesdayWednesdayThursdayFridaySaturdaySunday

10:00 am – 9:00 pm10:00 am – 9:00 pm10:00 am – 9:00 pm10:00 am – 9:00 pm10:00 am – 9:00 pm10:00 am – 9:00 pm10:00 am– 5:00 pm

Pricing structure:

- Menu changing seasonal.

- By the time.

- According to our customers.

EXPECTED RISKS:

- The volatility of market prices affects the cost of output.

- The number of customers is not as originally envisaged.

- The risk of unintended such as fire, malfunction.

INVESTMENT PROJECTS

Number Explain Amount (Php) Depreciation period (year)1 Space rental (5 year contract) 2,200,000 5

2 Interior decoration 400,000 4

3 Buy equipment for restaurants 480,000 5

4 Business registration, employee training 120,000 2

5 Marketing 60,000

6 Total 3,260,000

The amount of this initial investment is amortized using the straight line method.

In particular, interior decoration after the depreciation period is still in use until the end of the project cycle (5 years)

The space will be rent at Robinson Manila 2nd Floor, 132 m2 area, the average price of Php280 / m2/mo for rent. Then the rent rates will increase 4% per year to offset inflation.

Project exploit duration: 5 years.

Corporate income tax rates: 30%

Inflation rate: 4%.

Amortization spreadsheet (in Php)

Year 1 2 3 4 5Ground 440,00 440,00 440,00 440,00 440,00Interior 100,000 100,000 100,000 100,000 0

Equipment 96,000 96,000 96,000 96,000 96,000Business registration, training 100,000 100,000 0 0 0

Total 816,000 816,000 716,000 716,000 616,000Liquidation value 360,000

Corporate income tax 108,000Liquidation value (after tax) 252,000

The location requires some build-out and renovation totally Php 480,000 and will require approximately 30 days to complete. The Wrights will sub-contract the work themselves.Investment loan needs (in Php):

Investment demand 3,260,0001 Equity (= 30% investment demand) 1,000,0002 Loans (= 70% investment demand) 2,260,000So loan demand: 2,260,000

The Long-term loans will be lend from BPI with 9% rate annual

Table repayment debt plan

Year 1 2 3 4 5Early Debt 2,260,000 1,808,000 1,356,000 904,000 452,000

Interest -203,400 -162,720 -122,040 -81,360 -40,680Repayment of

principal-452,000 -452,000 -452,000 -452,000 -452,000

Interest and principal payment payable

-655,400 -614,720 -574,040 -533,360 -492,680

Last year outstanding debts

1,808,000 1,356,000 904,000 452,000 0,000

To finance the project, the company had 2,260,000 loan with an interest rate of 9%. The repayment period of 3 years. Repayment amortization method with fixed period clause. Use the IPMT function to calculate the interest payable and PPMT function to calculate the original debt payable in the period (in Excel).

ASSESSMENT RESULTS OF OPERATIONS (TENTATIVE):

Progress of business (Unit: person)

# Year 1 2 3 4 51 Number of visits to the

restaurant in a day80 100 120 125 130

2 Number of people come to the restaurant in a month

2400 3000 3600 3,750 3900

3 Number of people come to the restaurant in a year

28,800 36,000 43,200 45,000 46,800

4 Growth. 20% 16.7% 4% 3.8%

Spreadsheet operating expenses (including depreciation)

Explain (in Php)

Year 1 2 3 4 52.1 Management FeeWages 252,000 252,000 252,000 252,000 380,000Bonus 12,000 12,000 12,000 13,200 14,000Advertising, Reception 60,000 70,000 75,000 80,000 80,000Insurances 2,200 2,200 2,200 2,200 2,200Electricity, water, association fee, others

120,000 151,578 189,473 202,105 208,421

2.2 Maintenance fee (2% of total revenue)

72,000 72,000 72,000 72,000 72,000

2.3 Expenses Depreciation 553,000 553,000 522,500 522,500 511,0002.4 The cost of tools and supplies

150,000 150,000 150,000 150,000 150,000

2.5 Raw material 1,200,000 1,500,000 1,750,000 1,888,000 2,000,0002.6 Workers,Wages 1,380,000 1,380,000 1,380,000 1,464,000 1,584,000Bonus 26,000 26,000 26,000 27,800 29,000Insurance 14,400 14,400 14,400 14,400 14,400Operating expenses 3,889,600 4,231,178 4,493,573 4,776,205 5,045,021Yearly revenue spreadsheet:

Analyze price and cost:

- For one set combo of Spring roll (6pcs) with Rice and drink priced of Php 160

Following the anticipated number of customers there will be:

Sales: 160x80 = Php 12,800/day – Php 384,000/Month - Php 4,608,000/year

Cost:

+ Rental: Php 37,000/month

+ Raw material – Pork meat, vegetables, spices, rice, vermicelli, etc.: Php 60/dish– Php 144,000/month

+ Others expenses – Gas, electricity, water, association fee, etc.: Php 22,000

+Wages: Php 139,000

-Manager: Php 25,000

- 2 Main chef: Php 18,000/each

- 2 scullion: Php 15,000/each

- 2 accountant: Php12,000/each

- 2 waiter: Php12,000/each

- 1 Delivery: Php10,000

Total: Php352,000

Gross Income: Php32,000

Taxes:Php9,600

Net income:Php22,400

Base on the anticipated number of customers (in Php)

Year 1 2 3 4 5Food 4,032,000 5,040,000 6,048,000 6,552,000 6,814,080Drink 576,000 720,000 864,000 936,000 973,440

Total revenues by year 4,608,000 5,760,000 6,912,000 7,488,000 7,787,520Growth 20% 16.7% 7.7% 4%

We have an average unit price in the first 3 years will be Php160 average for orders of each customer come, in which food is Php140 and Php20 of drinks. Then, the unit price will increase year by year until the end of the cycle at the rate of 4% to cover inflation.

Analyzes the financial performance of investment projects (in Php)

Year 1 2 3 4 5Revenue 4,608,000 5,760,000 6,912,000 7,488,000 7,787,520Revenue from main activities 4,032,000 5,040,000 6,048,000 6,552,000 6,814,080Revenue for secondary operations 576,000 720,000 864,000 936,000 973,440

Operating expenses -3,889,600 -4,231,178 -4,493,573 -4,776,205

-5,045,021

profit before tax and interest (EBIT) 718,400 1,528,822 2,418,427 2,711,795 2,742,499Accrued Interest and Principal -655,400 -614,720 -574,040 -533,360 -492,680Earnings before tax (EBT) 63,000 914,102 1,844,387 2,178,435 2,249,819CIT -18,900 -274,230 -553,316 -653,530 -674,945Net profit (OEAT) 44,100 639,872 1,291,071 1,524,905 1,574,873

This is an investment project to be effective.

Payback period (PP) 2.25 years or 2 years 3 months 5 days