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Entrepreneurship (BUS3ENT) Assignment 3 Individual Business Model and Plan

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181 views19 pages

Entrepreneurship (BUS3ENT) Assignment 3 Individual Business Model and Plan

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Hariprasad KS
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Entrepreneurship (BUS3ENT)

Assignment 3
Individual Business Model and Plan

Student name:
Student ID:
Class day & time:
Tutor’s name:
Word count:
Executive Summary
The Australian population has been moving fast towards the vegan lifestyle. Various reports,
including from PETA (People for Ethical Treatment of Animals) confirm that Australia is
amongst the fastest growing vegan nations with a concern for animals. Additionally, the demand
for healthier food rich in its nutrition content is also driving the people towards a vegan lifestyle.
Vegan diet ensures a better life for animals, and its health benefits for humans are also high. A
greater shift towards veganism is expected in years to come. The shift towards veganism is
giving an opportunity to the food industry to satisfy the demand of Australian people for vegan
food option. Along these lines, the report aims to present a business plan for a vegan restaurant
business venture to be established in Mount Bay, Swan river region of Perth. The restaurant will
be named 'Veganista World'. A variety of Vegan food will be served for a vegan and health-
conscious segment of people. The restaurant will specifically serve vegan food only with added
cuisines from India, China and England.
Business Model Canvas model applied to the restaurant plan highlighted that the core value of
the business will be to serve healthy vegan food high on the nutrition value to the people with
vegan food choice. Customer relation will be the major focus of the business. Apart from serving
food at the dining, home delivery through a 3rd party agreement will be made. Further, marketing
agency for social media promotion of the restaurant will be approached. Market analysis reveals
that the millennial population is more inclined towards vegan food choices. Technology will be
highly integrated into business operations. The report also presents the organizational structure
and revenue and estimations for the restaurant.

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Table of Contents

1. Introduction..................................................................................................................................1
2. Business Model Canvas...............................................................................................................2
2.1 Customer Segments...............................................................................................................2
2.2 Value Proposition..................................................................................................................3
2.3 Customer Relationships.........................................................................................................3
2.4 Channels................................................................................................................................4
2.5 Key Activities........................................................................................................................4
2.6 Key Resources.......................................................................................................................4
2.7 Key Partners...........................................................................................................................5
2.8 Revenue Structure..................................................................................................................5
2.9 Cost Structure........................................................................................................................5
3. Planning.......................................................................................................................................6
3.1 Market....................................................................................................................................6
3.2 Operations and Technology...................................................................................................7
3.3 Human Resources..................................................................................................................8
3.4 Finance.................................................................................................................................11
References......................................................................................................................................12
Appendices....................................................................................................................................14
Appendix 1: Start-up Costing for Veganista World – 2020......................................................14
Appendix 2: Profit & Loss for Veganista World as at 2020.....................................................15

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1. Introduction
According to PETA (2019), Australia tops the list of vegan countries with Australian population
heavily searching for vegan food and recipes on google (Figure 1). This indicates the rising
concern for animal lives. Further, according to Kneebone (2018), the Australian population is
highly becoming health conscious and demands to know the source of their food. This is the
main reason for them to shift to plant-based food. Furthermore, Oxford academics, Dr.
Springmann predicts that population growth, climate change and food shortages will make the
world adapt to a vegan diet by 2050 (The Guardian 2018). Thus, keeping the rising veganism
trend in mind, the vegan restaurant is chosen as the Australian-based business venture for this
report.

Figure 1: Australian population amongst top vegan food search: Source; (PETA)

The restaurant will specialize in providing vegan food options to the Australian people. Along
with the Australian staple food, the restaurant will have also include dishes from around the
world, especially from England, China and India, as the proportion their population residing in
Australia is vast (Statista 2019) (Figure 2). However, it will be ensured that only the dishes that
resonate with the vegan theme are included. The restaurant will be named 'Veganista World'
(VW) with a tag line 'Because animals deserve this world as much as humans’. Apart from this,
the nutritious value will be listed for each item on the menu. Preparation material for food and

1
beverages will be organically sourced to ensure high health benefits. Dishes will be priced at the
ongoing competitive prices. Further, as PETA (2019) suggests Perth to be a highly vegan city,
VW will start its operations from Perth, with expansion to Melbourne and Brisbane over time,
which are other cities marked high on veganism lifestyle. A building near Swan river, Perth will
be chosen for the restaurant as the region is a major attraction for locals and tourists (Western
Australia 2020). Initially, the restaurant will accommodate a maximum of 80 people.

Figure 2: Non-Australian population residing in Australia: Source; (Statista)

2. Business Model Canvas


2.1 Customer Segments
VW will serve the customer segment having vegan food choice and a concern for their health.
According to IBIS World (2019), Australian individual following a vegan diet will rise even
more in the next five years. Currently, this segment of people in Australia is approximately 12%
of the population (AnimalAustralia.org 2020).

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2.2 Value Proposition
The core benefits provided by the business to its customers are known as the value propositions
(Osterwalder et al. 2013). The core value that VW will be providing to its customers is with
healthy vegan food high on the nutrition value. Further, other values are presented in the table
below:
Value Description
Variety of Cuisines Cuisines from India, China and the UK, will be
provided apart from the Australian food.
Organic food preparation Organically grown food will be used in the
preparation of the menu items to ensure health
benefits
Friendly and positive staff Special training to the staff serving the
customers will be given to ensure customer
satisfaction.
Custom food option Children, fitness-conscious youngsters and
adults with specific food requirement will be
given a choice to customize their orders by
directing the ingredients to be used and
cooking method.
Special offers and gifts The restaurant will provide additional
discounts on the food bill with Vegan-themed
badges on festive occasions such as Christmas.

Table 1: Value Proposition- other values (Self-illustrated)

2.3 Customer Relationships


Maintaining good customer relationship will be one of the key focuses of the restaurant. All staff
members from manager level to customer attendants will be given training to attend the
customers properly with intent to create a long-term relationship with them. Tables at the
restaurant will be equally assigned to the staff, and the dedicated staff will be responsible for
attending every need of the customer taking that table. Thus, personal assistance will be provided
to customers. Customer's data will be maintained, and special invitations offering exclusive

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discounts will be sent via e-mails and mobile text messages on their special days such as
birthdays and anniversaries.

2.4 Channels
Customers will be served directly at the physical space of the restaurant situated in the swan river
region, Perth. Customers can also call at the restaurants for making reservations and placing
home delivery orders. Further, intermediaries will be used by the restaurants to offer home
delivery of food to the customers within the vicinity of seven kilometres. Initially, 'Deliveroo’
and ‘Foodora' will be used as intermediaries, and the customers can place their orders using their
website/ application.

2.5 Key Activities


Key activities define the actions required by the business for achieving the value proposition for
its customers (Dudin et al. 2015). The key activities for VW will be:

 Procuring organic food ingredients from the suppliers


 Ensuring a safe and hygienic kitchen area
 Using social media expert agency for promotion
 Conducting the analysis for most popular vegan dishes in Australia
 Ensuring food quality
 Ensuring customer satisfaction through regular feedbacks and staff training
 Maintaining partnership for home delivery

2.6 Key Resources


The physical, human, financial and intellectual resources of the restaurants that will help the
restaurant to carry its operations and achieve the objectives include:

Physical: Physical space including restaurant sitting area and parking, dining furniture, utensils
for serving the dishes and preparation of food, inner décor of the restaurant
Human: Customer attendants, chefs, manager, and delivery and promotion partners
Financial: Venture capital introduced by the owner and financial loan from companies funding
the start-up venture

4
Intellectual
-Trademark for restaurant name and logo
-Trade secret includes maintained customer data
-Copyright website and application in future

2.7 Key Partners


Ingredient suppliers: continued supply of ingredients is necessary to carry the daily operations
at the restaurant. Lack of ingredients can halt the food-making process and customers can be lost
forever.

Delivery Intermediaries: Agreement with Deliveroo and Foodora to list the restaurant on their
website and application is imperative for home delivery orders as no company website will be
there initially.

Promotion Partners: Agency providing professional social media promotion service will be
reached to popularise the venture. They will be the medium to communicate the restaurant
information such as name, location and key values to the targeted customers.

2.8 Revenue Structure


Dining and online order receipt amount will be the source of revenue for the restaurant. The
prices of the items mentioned in the restaurant menu will be fixed. However, customized food
option will be charged as per the ingredients and cooking time. Further, receipts will be
discounted specifically for customer's special days and generally on festive days.

2.9 Cost Structure


Initial set-up cost will include acquiring physical space, furniture and utensils. Further, staff
salary and electricity bills will be monthly fixed expenditures. Storage of ingredients and
government tax will also be added to the cost. Operational expenses will mainly include the cost
to procure the food ingredients and maintaining the decor. Delivery and promotional expenses
will also be incurred.

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3. Planning
3.1 Market
As specified by PETA (2019), Australia is on the top of the list of countries going vegan in their
food choices, and the market will be open for vegan food providers. Futhers, IBIS World (2019)
estimates the rising number of vegan individuals in Australia in the next five years. Currently,
12% of the Australian population is vegan (AnimalAustralia.org 2020). Furthermore, Australia
has also been the fastest-growing markets for vegan products from 2015 to 2020, with a growth
rate of almost 10% and a market worth of approximately $83 million (Statista 2016). On the one
hand, rising growth rate in veganism is providing great opportunities to the food manufacturing
industry, on the other hand, Australian dairy and meat industry is being threatened with low local
demand, pushing them to rely on exports for sustained growth. Overall, the industry for vegan
food is very attractive and is expected to reach approximately 200 million (Murray-Ragg 2019).
Millennials, in particular, are adapting to the vegan lifestyle in Australia, which has compelled
fast-food chains and even pubs to include plant-based food options in their offerings
(ABC.Net.Au, 2019). Millennials are approximately 28% of the Australian population (ABS
2016), which makes the market all the more attractive. With the vegan trend in Australia, big
food chains such as Nandos, TGI Fridays, Mad Mex and Dominos have introduced vegan cheese
and burgers (ABC.Net.Au 2019).

Following table describes the segment details of VW customers:


Basis of segmentation Detail
Geographic Perth locals and tourists staying at Swan river
hotels
Demographic Inclusive for all genders and ages, particularly
millennials
Psychographic Health-conscious people having a preference
for vegan food and concerns for animal life.

Table 2: Customer Segmentation bases (Self-illustrated)

Mount Bay road is the main dining attraction in the swan river region (Western Australia 2020)
and is chosen for VW to set up its dining space. Further, the area has hotels with international

6
tourists staying (Forbes 2019), making the location attractive for tourists in addition to domestic
visitors. VW will serve only vegan food with cuisines from other parts of the world, making VW
a better choice for pure vegan people.

3.2 Operations and Technology


Use of technology in restaurants is becoming increasingly popular to ensure efficiency and time-
saving in the operations and achieve highest customer satisfaction (Cavusoglu 2019). VW will
use various technologies in its operations. To start with, 'Scheduling Software' will be used
through which employees can check their shift schedules, request day-off or change in the shift
time. The software can be used by the managers to check the employee availability at the start of
every day to avoid last-minute nuisance caused due to staff unavailability. Further, managers can
update important information on the software that can be accessed by every internal member of
the restaurant. This will ensure smooth internal coordination and will enhance the customer
experience. The digital inventory system will be used to track the inventory stock. The system
will help to track the ingredient requirements, place orders and handle the storage in order to
save time on procurement. Stock requirements can be predicted to save the restaurant from stock
out situations which can heavily impact customer satisfaction. According to Tran et al. (2017),
inventory systems are massively used in hotels and restaurants to maximize the efficiency in
operations.

'Interactive Tables' will be used with built-in menus displaying nutrition value and 3D picture of
every dish on the menu. Customers can view menu, place orders, play games while waiting for
the dish to arrive, add feedback and their experience and make payments (Margetis et al. 2013).
Display systems will be installed on the wall to show the order progress in the kitchen and
estimated time of delivery on the table for every open order. Free-Wi-Fi session will also be
available for the customers. Perth map will also be accessible on the interactive tables using
which tourists can view the nearby locations and traffic status to plan their trip accordingly. In
addition, Kiosks will be used to avoid waiting for lines through which visitors can track the table
availability and make table reservations.

7
Figure 3: Sample of the interactive table: Source; (colemans.com.au)

In terms of legal requirement, a license is to be obtained from the Perth Local Council for
starting the restaurant business in the city (Australian Institute of Food Safety 2016). Further,
food handling and safety training for employees is also a legal requirement in Australia. VW will
also have to comply with food safety regulations suggested by the Food Safety Authority
Australia and New Zealand (FSANZ). Further, Ingredient procurement and food preparation will
be in-house functions. Home delivery and marketing activities will be done in partnership with
expert industry partners.

3.3 Human Resources


According to Armstrong and Taylor (2020), human resource is one of the most significant
resources for any organization to perform and achieve its objectives. At VW, staff with
experience and expertise in their respective domain will be hired. Human resource for the post of
chefs, personal attendants, quality audit, accounts and IT will be required. Managers will head
the teams with team leads in place. In turn, these managers will be headed directly by the owners
of the restaurant. There will be three owners with an equal stake in the restaurant. The diagram
below explains the exact structure and hierarchy at VW:

8
9
A total of 10 managers will be hired with functional expertise who will report directly to the
owners. Further, six-team leads will be hired for heading the chef and personal assistance staff.
Chefs need cuisine expertise and relevant experience, while personal assistance team directly
deal with the customers. Hence, they are assigned team leaders in addition to managers. Twenty-
seven staff members will be working directly under the managers in their respective functional
areas. A total of 43 employees will be hired for various positions. Overall, the Operations
department will be responsible for providing high-end experience to the customers. Finance
department will manage the expenditures and revenues of the business and will look after the tax
and legal requirements. IT department will be responsible for the smooth functioning of the
technology within the business, including interactive tables, kiosks, inventory system and
payment systems. It is crucial since the restaurant model integrates technology intensely.
Marketing department will focus on spreading the restaurant awareness in association with the
outsourced marketing agency. Quality department will ensure food standards and hygienic
measures are maintained. Logistics department will engage in procurement and delivery
functions.

HR department will play a significant role in the hiring process, arranging training and
maintaining employee contracts. The hiring will be done in two phases. First phase will evaluate
the employee skills and experience through face-to-face interview with the restaurant owners.
Second phase will include HR negotiations for salary negotiations and employment contract.
Negotiation will decide the pay and other important employment terms. Training, bonus,
promotion and team outings will also be discussed for the motivation of employees.

Below table represents the estimated employee requirement for a period of 3 years:

Functional Year 1 Year 2 Year 3


Department
Operations 16 18 20
Finance 4 6 8
IT 2 4 6
Marketing 3 5 7
Quality 6 8 10

10
Logistics 6 8 11
HR 6 7 11
Total 43 56 73

Table 3: Estimated Employee requirement (Sel-illustrated)

3.4 Finance
Start-up investment of VW will be divided amongst the three owners in the same ratio. In
addition, bank loan will be taken to fund the venture. Equipment worth $ 130700 is estimated to
be acquired, while $ 106565 is the estimated start-up cost (Appendix 1). These costs are very
high, and VW is prepared to face net loss in the initial years of operations. However, industry
attractiveness and continued business operations will cover the cost within four years of the
operations.

Estimated revenue of $209000, $300000 and $ 452000 will be earned in year one, two and three
respectively (Appendix 2). Revenues and cost of sales are expected to increase at an increasing
rate. Further, the overall profitability in the first year is expected to be negative due to high start-
up cost, less customer acquisition and high marketing costs. However, it is expected that
business profits will become positive by the end of the second year. In the third year, good net
profit of $132890 is expected.

11
References
ABC.Net.Au 2019, Veganism becomes more mainstream — but don't mention the 'V' word,
viewed 27 May 2020, <https://www.abc.net.au/news/2019-03-11/dont-use-the-v-word-why-
veganism-is-going-more-mainstream/10836504>

ABS 2016, Population by Age and Sex, Regions of Australia, viewed 27 May 2020,
<https://www.abs.gov.au/ausstats/[email protected]/Previousproducts/3235.0Feature%20Article12014>

AnimalAustralia.org 2020, 2.5 million Australians are now eating all or almost all vegetarian,
viewed 27 May 2020, < https://www.animalsaustralia.org/features/study-shows-surge-in-
Aussies-eating-veg.php>

Armstrong, M. and Taylor, S. 2020, Armstrong's handbook of human resource management


practice, Kogan Page Publishers.

Australian Institute of Food Safety 2016, Everything You Need to Know about Starting a Food
Business, viewed 27 May 2020, <https://www.foodsafety.com.au/blog/everything-you-need-to-
know-about-starting-a-food-business>

Cavusoglu, M. 2019, ‘An analysis of technology applications in the restaurant industry’, Journal


of Hospitality and Tourism Technology.

Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S. and Namitulina, A. 2015, ‘The innovative
business model canvas in the system of effective budgeting’, Asian Social Science, vol. 11, no. 7,
pp.290-296.

Forbes 2019, The Best Hotels In Perth, Australia, viewed 27 May 2020,
<https://www.forbes.com/sites/katiebell/2019/12/27/the-best-hotels-in-perth-
australia/#1a876ad435a9>

IBIS World 2019, Seeing Green: Plant-based Products are Shaking up Food Industries, viewed
27 May 2020, <https://www.ibisworld.com/industry-insider/analyst-insights/seeing-green-plant-
based-products-are-shaking-up-food-industries/>

Kneebone, S. 2018, FMCG trends: adapting to plant-based consumer demand, viewed 27 May
2020, <https://www.playmr.com.au/blog/fmcg-trends-adapting-to-plant-based-consumer-
demand>

Margetis, G., Grammenos, D., Zabulis, X. and Stephanidis, C. 2013, ‘July. iEat: An interactive
table for restaurant customers’ experience enhancement’, In International Conference on
Human-Computer Interaction (pp. 666-670). Springer, Berlin, Heidelberg.

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Murray-Ragg, N. 2019, Australia Is The 3rd Fastest Growing Vegan Market In The World,
viewed 28 May 2020, <https://www.livekindly.co/australia-vegan-market-growth/>

Osterwalder, A., Pigneur, Y., Oliveira, M.A.Y. and Ferreira, J.J.P. 2011, ‘Business Model
Generation: A handbook for visionaries, game changers and challengers’, African journal of
business management, vol.5, no.7, pp.22-30.

PETA 2019, Australia Ranks Number One in the World for ‘Vegan’ Searches in 2018, viewed 27
May 2020, <https://www.peta.org.au/news/australia-ranks-number-one-in-the-world-for-vegan-
searches-in-2018/>

Statista 2016, Sales growth of the vegan market between 2015 and 2020 worldwide, by country*,
viewed 27 May 2020, <https://www.statista.com/statistics/562911/global-sales-growth-of-the-
vegan-market-by-country/>

Statista 2019, Number of foreign born population in Australia as of 2018, by country of birth,
viewed 27 May 2020, <https://www.statista.com/statistics/594722/australia-foreign-born-
population-by-country-of-birth/>

The Guardian 2018, The unstoppable rise of veganism: how a fringe movement went
mainstream, viewed 27 May 2020,
<https://www.theguardian.com/lifeandstyle/2018/apr/01/vegans-are-coming-millennials-health-
climate-change-animal-welfare>

Tran, J., Hol, A., Nguyen, Q.V. and Simoff, S.J. 2017,’ Fine Dining Restaurant Framework
Development and Survey’, In ICE-B, pp. 83-90.

Western Australia, 2020, Attraction Swan River, viewed 27 May 2020,


<https://www.westernaustralia.com/en/Attraction/Swan_River/56b267542880253d74c4f9eb#/>

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Appendices
Appendix 1: Start-up Costing for Veganista World – 2020

EQUIPMENT/CAPITAL
START-UP COSTS Cost ($) Cost ($)
COSTS
Registrations   Business purchase price  -
Business name 300  Franchise fees  -
Licences  100 Start-up capital  50000
Permits  275 Plant & equipment  
Domain names  170 Vehicles  18000
Trade marks/designs/patents  300 Computer equipment  25000
Vehicle registration  150 Computer software  11000
Membership fees  590 Phones 1000 
Accountant fees  2500 Fax machine  200
Solicitor fees  2500 Security system  3500
Rental lease cost (Rent
Office equipment
advance/deposit)  5000  
Utility connections & bonds
Furniture
(Electricity, gas, water)  2000  17500
Phone connection  100 Shop fit out  4500
Internet connection  1250    
Computer software  4800    
Training  850    
Wages  35000    
Stock/raw materials  20000    
Insurance      
Building & contents  4200    
Vehicle  480    
Public liability  550    
Professional indemnity  550    
Product liability  450    
Workers compensation  3250    
Business assets  5000    
Business revenue  1200    
Printing  3000    
Stationery & office supplies  1500    
Marketing & advertising  10500    
Total equipment/capital
Total start-up costs $106565 $130700
costs

14
Appendix 2: Profit & Loss for Veganista World as at 2020

PROFIT & LOSS Year 1 Year 2 Year 3

 
209000 300000 452000
Sales  
  90000
68000 80000
less cost of goods sold  
More…  -  - -
$ $
141000 220000 $362000
Gross profit/net sales
Expenses    
3200 3200 3200
Accountant fees
  13000
Advertising & 10000
marketing 12000 
1000 1000
Bank fees & charges    1000
4000 4000 4000
Bank interest      
Credit card fees  1000  1000  1000
Utilities (electricity, 5000 5000 5000
gas, water)  
1100 1100 1150
Telephone  
Lease/loan payments  5000  5000  5000
28000 28000 28000
Rent & rates  
3200 3200 3300
Motor vehicle expenses  
5000 4500
Repairs & maintenance   4000
750 960
Stationery & printing    850
Insurance 8000 8000 8000

15
     
Superannuation -   
Income tax  50000  52500 61000
Wages (including 80000 90000
PAYG)    85000
More…  -  
$
213850
Total expenses $205250 $229110
NET PROFIT (Net
Income) $(64250) $6150 $132890

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