Restaurant
BUSINESS PLAN



Restaurant Business Plan V1 532
Photo by: Denis Ponkratov

KELLY HOUSE INN


337 Delaney St.
Kimble, MI 48667


A second effort for these entrepreneurs, their experience is evident in this plan. This restaurant will be one of the area's full-service dining establishments. Located in a burgeoning area of the country, the timing is evidently correct. Note the careful surveying of relevant data to support their business goals.




EXECUTIVE SUMMARY

The concept for Kelly House Inn revolves around several key words: Quality, innovation, Value, Freshness and Service.

Kelly House Inn will be a superior, fullservice restaurant, located in the heart of downtown Kimble, serving lunch and dinner, and featuring responsible alcohol service. This new restaurant will give downtown Kimble the opportunity to offer residents, visitors and businesspeople a unique and welcome alternative in casual dining.

The need for such a quality establishment is well documented in a recent extensive study commissioned by the Downtown Kimble Area Economic Enhancement Strategy Task Force. The "Kingston-Howard Downtown Kimble Economic Enhancement Strategy 1996" report projects population growth as well as retail sales growth, along with a demand for additional downtown office space and downtown housing. Such growth will increase demand for other services and products. The study makes at least 50 references to the need for additional restaurants in downtown Kimble, with emphasis on excellent food, outdoor seating and dining alternatives (variety).

In addition, when residents were asked by Kingston-Howard what specific types of businesses would attract them to downtown more often, more restaurants and food establishments were at the top of their list.

There is little competition in the same category as Kelly House Inn. Most existing establishmentsthat serve alcohol are pubtype places. The Inn would further distinguish itself with a menu of food items that are innovative, topquality, fresh and "housemade."

It will operate seven days a week under experienced management, headed by Vincent Freemont, coowner with Anna Freemont of the Inn's sister restaurant, The Coffee Grinder Cafe. Kelly House Inn would draw on the strengths and capitalize on the excellent reputation of The Coffee Grinder, yet have its own personality, featuring unique selections of hot and grilled foods.

Vincent and Anna Freemont are active members of this community and experienced restaurateurs. Vincent Freemont has a 20 year history of extensive restaurant management in privately owned and corporate chain restaurants. He has a B.A. degree in restaurant and hotel management from Michigan State University. Anna Freemont is a registered dietitian and worked for Bellevue Corporation in the food service management division.

Anticipated sales during the first year of operation is $600,000, with projected 20% increases during the following two years. This is based on the history of sales increases at The Coffee Grinder Cafe.

One of the primary goals of this new restaurant is to provide Value to the customer. Menu pricing will be set based on the objective to have an average dinner check be $15.00 and an average lunch check to be $7.00.

Emphasis will be placed on friendly service that will not only meet, but exceed guests' expectations. And while excellence is hard to define, oftentimes others will define it for you. An excellent track record at the awardwinning The Coffee Grinder Cafe will help sell this new venture, as will value combined with imagination.

MISSION STATEMENT

Kelly House Inn will be the area's full service restaurant of choice, providing the best value for fresh and wholesome food, innovative menu selections and memorable service.



PURPOSE

This plan is designed to establish the feasibility of a successful outcome for this new restaurant business venture, and to provide all necessary information and supporting materials to:


This document will demonstrate the need for a restaurant of this caliber in downtown Kimble and its chances for success. It will serve as a road map that will set the course for further planning and for the implementation process.

Anticipated financing is 75% of $260,000 for the use of total startup costs and $30,000 of reserveto use for operating funds in the first months. This financing will help ensure a timely start to the project in order to take advantage of the upcoming tourist season. Opening the Kelly House Inn by the summer of 1997 will keep the financial projections on track and increase the likelihood of success.

Repayment will be through cash flow of the restaurant, on a scheduled basis.


DESCRIPTION OF BUSINESS


Overview

This new business will be a superior, fullservice restaurant, serving lunch and dinner, and featuring responsible alcohol service. The hallmark of Kelly House Inn will be Excellence in all aspects:


Business hours:

Sunday-Thursday 11 a.m. to 9 p.m.

Friday & Saturday 11 a.m. to 11 p.m.

Square footage: 2,800



Atmosphere

Kelly House Inn's casual ambience will contribute to the comfort diners will feel in a relaxed tmosphere, whether starting out with a beer or lingering over a final cup of coffee or glass of wine after dinner.



Menu & Pricing

The menu and pricing is designed for outstanding perceived value, with a generous selection of innovative and appealing menu items that emphasize freshness and quality. The menu entrees will enhance the numerous selections of beer and wines bytheglass.

Location

Kelly House Inn will be located in the heart of downtown Kimble, taking advantage of downtown's bustling tourist industry, and offering an attractive alternative for seasonal and yearround residents, as well as business owners and employees.



MARKETING

Research. A recent intensive study, commissioned by the Downtown Kimble Area Economic Enhancement Strategy Task Force, supports the need for additional restaurants, based on existing consumer demands and projected population/use growth.

The "Kingston-Howard Downtown Kimble Economic Enhancement Strategy 1996" makes 50 references to the need for additional restaurants in downtown Kimble, with the focus on excellent food, as well as outdoor seating and dining alternatives (variety). The study outlines:

Retail sales growth potential from its "current level of approximately 29% to between 32% and 34% by the year 2002."

A demand for additional office space "between 10% and 15% during the next 6 years, based on...further enhancement of the area and anticipated increase in area households...."

A recommendation to develop upper floors of commercial building for additional downtown housing.

These statistics suggest and Kingston-Howard recommends that businesses be developed now to accommodate the projected growth patterns that are anticipated in a relatively short period of time. Additional shoppers, business owners, employees and residents mean additional opportunities for dining establishments to serve this new influx of clientele.

The study also recommends, as a course of action, that "current Downtown business owners should consider opening multiple operations to provide variety and a range of price points to the market."

Demand for more restaurants topped the list for residents who were asked what specific type of business would attract them to downtown more often. And visitors named food as the top item purchased when in downtown.

In order to accommodate existing customers and to draw more people into downtown, Kingston-Howard says that two retail clusters should be formed: the first consisting of prepared food establishments, including fine dining and moderate priced restaurants, as well as other food and specialty retail businesses. The second cluster should also contain restaurants. The study recommends additional "anchors" to be created in downtown and suggests that these should include unique, nonchain food establishments...."



Target Markets

The demographics for proposed target markets are wide in range, which bodes well for the success of this venture:

Specific target markets by serving time:

Target market for lunch: Downtown business owners, employees, shoppers, tourists, seasonal and yearround residents.

Target market for dinner: Tourists, seasonal and yearround residents. Kelly House Inn would be a eatery "destination location," and would draw on clientele attending theater and other downtown promotions.



Promotions & Publicity

To create and maintain awareness by the public of Kelly House Inn, several methods of publicity will be utilized:

Advertising primarily in the Kimble News Guardian and Hamilton Magazine. Hamilton Magazine reaches out-of-county and out-of-state visitors, and has been an effective source of new business at The Coffee Grinder Cafe.

Crosspromotions with Kimble's Gaslight Cinema and McCune Arts Center productions, and with Kelly House Inn's sister restaurant, The Coffee Grinder Café. Other tie-ins with community events as appropriate.

Key messages in advertising:


Anticipated Sales* & Expenses

Restaurant Business Plan

First year (June 15, 1997 to June 14, 1998) $600,000
Second year (20% increase) $720,000
Third year (20% increase) $864,000

Based on the history of sales increases over the previous year at The Coffee Grinder Cafe:


Anticipated food and liquor sales mix is 88% and 12% respectively.


Menu Pricing


Menu pricing will be determined considering the following:


COMPETITION

The Kingston-Howard study concluded that there is a demand for more dining diversity in downtown Kimble. Currently, there are four downtown eating establishments that serve alcohol: Main Street Pub, Larry's Pub & Grub, The Kimble Hotel (Dining Room) and Knockin' Around Room, and the Green Door Cafe. The remaining downtown restaurants do not provide the combination of full table service and alcoholic beverages.

Main Street Pub and Larry's Pub & Grub are perceived as bars that serve "pubtype" food and have a lower check average than anticipated at Kelly House Inn. They do little advertising. The Dining Dining Room at the Kimble Hotel is more of a fine dining experience, with a higher check average than anticipated at Kelly House Inn. The Knockin' Around Room is geared more to a "pub of dining and food, with lower pricing than anticipated at the Inn. The Green Door Cafe is probably the most similar competitor in terms of menu pricing and casual dining atmosphere.

Kelly House Inn would differentiate itself from its competition with a menu of food items that are innovative, top quality, fresh, and "housemade," which is always a marketing plus.

Another unique concept at Kelly House Inn will be found in its method of ordering. A la carte selections will allow diners to select the amount and kinds of food they wish and not be locked into a preselected array of side dishes.

The Inn would draw on the strengths and capitalize on the excellent reputation of its sister restaurant, The Coffee Grinder Cafe, by offering topnotch quality food at affordable prices, but with a unique fare and flare. Kelly House Inn would complement The Coffee Grinder by giving diners the option of hot and grilled foods.



OWNERSHIP AND MANAGEMENT STRUCTURE

Kelly House Inn is a limited liability company. The members are Paul and Marie Hanson, attorneys; and Vincent and Anna Freemont, owners of The Coffee Grinder Cafe.

Paul and Marie Hanson contribute legal expertise as well as broad knowledge of food and wine.

Vincent Freemont has a 20 year history of extensive restaurant management experience in a privatelyowned restaurant as well as corporate chain restaurants. His education includes a B.A. in restaurant and hotel management from Michigan State University. Besides opening his own successful restaurant, The Coffee Grinder Cafe, he has been responsible for the openings of approximately 20 new restaurants with the Hanover Food Service Company.

Anna Freemont is a registered dietitian and had worked for Bellevue Corporation, food service management division, for 10 years. She also opened and manages The Coffee Grinder Cafe.

Day-to-day operations will be handled by a general manager and a chef, and by trained key personnel operating as shift leaders.

Organizational structure:


PROFILES

Vincent and Anna Freemont are dedicated businesspeople who are committed to giving their customers at The Coffee Grinder Cafe the best product at an affordable price. Their efforts at providing quality and innovative food items has earned them several awards, including the Kimble Regional Chamber of Commerce Service Excellence Award in 1996 and Hamilton Magazine's Readers' Choice for Soups, Lunches and Coffee for the past three consecutive years.

Familyoriented and conscientious members of the community, Vincent and Anna participate in local events and their children's school activities.

Anna has chaired the Kimble Thanksgiving Parade for the last two years, each year enhancing this event with more zeal than the year before. This year, she secured major donations to purchase and fill a giant 45-foot nutcracker balloon. Anna also teaches a soupcooking class through the Kimble Adult Education Program.

Vincent teaches a coffee appreciation class through the Adult Ed Program. He is a member of the Breakfast for Champions Committee and the Promotions Committee of the Kimble Gaslight Downtown Association.

Menu


Appetizers

Spring Rolls
Skewered Shrimp
Chicken Nachos Bean Nachos
Calamari
Shrimp & Rice Fritters
Wild Mushroom Ravioli
Black Bean Soup
Cheese Onion Soup
Fontina, Corn, and
Jalapeno Quesadilla
Mussels

Sandwiches, Salads, & Light Courses

Tuna Melt
Shrimp Melt
Grilled Hamburger with Bleu Cheese
Grilled Marinated Tuna Steak Sandwich
Pork Sandwich with Chipolte BBQ Sauce
Mustard Chicken with Mixed Greens
Black Bean and Vegetable Burritos
Caesar Salad with Grilled Shrimp
Spinach Salad with Prosciutto Dressing
Open-Faced Roasted Pepper and Mozzarella Sandwich
North City Salad
Caesar Salad

Entrees

Grilled Beef Tenderloin with red wine, shallot and mushroom sauce
Grilled Tuna Steak with Soy Ginger Sauce
Grilled Herbed Salmon with Red Wine Sauce
Northern Catch of the Day
Ratatouille
Grilled Flank Steak with Soy-rosemary Marinade
Pork Medallions with Balsamic Vinegar and Sage
Penne with Sundried Tomatoes, Mushrooms and Artichoke Hearts
Pasta Shells with Feta and Herbs
Linguine with Summer Peppers and Sausage
Chicken with Port Mushroom Sauce
Jamaican Jerk Chicken with Black Beans
Citrus-Grilled Chicken with Mesquite Honey


Funding Total

Restaurant Business Plan

Equipment Total 45,556.00
HVAC Improvements 7,000.00
Hood vent with return air 15,000.00
Register system 6,000.00
Smallwares 15,000.00
Chairs 4,000.00
Tables 12,000.00
Remaining construction allowance 75,000.00
*Tile  
*Artifact  
*Painting  
*Exterior  
*Sectioning  
*Ceiling  
*Signature  
*Neon  
*Lighting  
*Bathrooms 179,556.00
Training & opening food 7,500.00
Pre-opening 187,056.00

Equipment List

Restaurant Business Plan

60" Sandwich station reach-in refrigerator - 3 1,395.00 4,185.00
54" Two door reach-in refrigerator 1,855.00 1,855.00
30" Ice cream cabinet 675.00 675.00
92" Keg dispenser 2,075.00 2,075.00
80" Black bottle cooler 1,260.00 1,260.00
Ice cream dipwell 105.00 105.00
30" Ice maker cubers - 459 lbs 1,630.00 1,630.00
Ice bin 270-340 capacity 545.00 545.00
Draft box tapping kit 115.00 115.00
Walk-in refrigerator box 3,415.00 3,415.00
Refrigerator for walk-in - 1 1/2 H.P. 2,270.00 2,270.00
Freezer - 2 door - 54" 2,375.00 2,375.00
Boiler - 42 1/4" - 3 burner 1,635.00 1,635.00
6 Burner-Vulcan (2-oven w/convection, griddle & broiler) 3,685.00 3,685.00
Casters 160.00 160.00
Warming drawer - single 600.00 600.00
750 Watt food warmer 160.00 160.00
Microwave 1200 Watt 950.00 950.00
Slicer Berkel - 10" 645.00 645.00
Kitchen Aid - 5 qt. 380.00 380.00
Food processor 435.00 435.00
Dishwasher - Jackson 5,350.00 5,350.00
Coffee brewer 535.00 535.00
Water/service station 1,233.00 1,233.00
Steam kettle - Cleveland - 6 gallon 2,246.00 2,246.00
Dish tables 700.00 700.00
Work table - 6 200.00 1,200.00
3 Compartment dish sink - 2 drainboards - 127" x 27" 1,469.00 1,469.00
Handsinks - 2 165.00 165.00
Deep fat fryer 725.00 725.00
Sub Total   42,778.00
Tax   2,567.00
TOTAL   45,556.00

Projected Cash Flow

Restaurant Business Plan

CASH    
  Year 1 Year 2
Beginning Balance Plus: 30,000.00 45,950.00
Cash receipts/sales 636,000.00 763,200.00
TOTAL CASH 666,000.00 809,150.00
DISBURSEMENTS    
Food cost 174,240.00 209,088.00
Beverage cost 21,600.00 25,920.00
Hourly payroll 150,000.00 172,800.00
Operating supplies 30,000.00 32,400.00
Repairs & maintenance 12,000.00 12,600.00
Utilities 14,000.00 14,700.00
Rent 25,200.00 25,875.00
Printing 2,000.00 2,000.00
Insurance 12,000.00 3,500.00
Advertising 9,000.00 10,800.00
Bank Charges 1,000.00 1,000.00
Dues 500.00 500.00
Personel Property 2,500.00 3,000.00
Use Tax 2,200.00 2,200.00
Single Business Tax 3,000.00 4,000.00
Licenses 2,500.00 2,500.00
Professional Fees 7,000.00 7,000.00
Miscellaneous 3,000.00 3,000.00
Management Labor with Taxes 50,000.00 60,000.00
Loan Repayment 30,960.00 30,960.00
Income Tax Payment 1,380.00 23,000.00
Sales Tax Payments 66,050.00 89,150.00
TOTAL    
DISBURSEMENTS 620,050.00 745,993.00
CASH FLOW 45,950.00 63,157.00

Pro Forma Profit & Loss Statement

Restaurant Business Plan

SALES Year 1   Year 2  
Food 528,000.00 88 633,600.00 88
Beverage 72,000.00 12 86,400.00 12
TOTAL 600,000.00 100% 720,000.00 100%
Cost Of Sales        
Food 174,240,00 33 209,088.00 33
Beverage 21,600.00 30 25,920.00 30
TOTAL 195,840.00 32.6 235,008.00 32.6
Hourly Labor Total w/Payroll Tax 150,000.00 25 172,800.00 24
Controllables Operating supplies 30,000.00 5 32,400.00 4.5
Repairs & maintenance 12,000.00 2 12,600.00 1.8
Total Controllables 42,000.00 7 45,000.00 6.3
Profit After Controllables 212,160.00 35.4 267,192.00 37.1
NON-CONTROLLABLES Year 1   Year 2  
Utilities 14,000.00 2.3% 14,700.00 2.0%
Rent 25,200.00 4.2 25,875.00 3.6
Depreciation 30,000.00 5.0 30,000.00 4.2
Equipment write-off 16,400.00 2.7 10,000.00 1.4
Training labor 5,000.00 .8    
Training food 2,500.00 .4    
Printing 2,000.00 .3 2,000.00 .3
Insurance 12,000.00 2.0 13,500.00 1.9
Advertising 9,000.00 1.5 10,800.00 1.5
Bank charges 1,000.00 .2 1,000.00 .1
Dues 500.00 .1 500.00 .1
Personal property 2,500.00 .4 3,000.00 .4
Use tax 2,200.00 .4 2,200.00 .3
Single business tax 3,000.00 .5 4,000.00 .6
Licenses 2,500.00 .4 2,500.00 .3
Professional fees 7,000.00 1.2 7,000.00 1.0
Miscellanceous 3,000.00 .5 3,000.00 .4
Management labor 50,000.00 8.3 60,000.00 8.3
Interest expense 21,000.00 3.5 20,000.00 2.8
TOTAL NON-CONTROLLABLES 208,800.00 34.8 210,075.00 29.2
PROFIT 3,360.00 .6 57,117.00 7.9


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