Business Plan Evaluation: Zara Restaurant & Lounge (Revision) After completing my first evaluation of Zara’s business plan I could not help but feel that I had missed something in my analysis. It was over the next week that I realized that I had failed to thoroughly evaluate the plan. At a glance, I thought the Zara concept was intriguing and as a bonus, aligned with my own dream to open a restaurant. I wanted to believe in the plan so much that I missed its weaknesses. Having time to review discussions from class and more resources and opinions of what effective business plans should contain, I now see there are glaring deficiencies in this plan. Zara’s business plan was written to secure sufficient finances to open a multi-use restaurant in a rapidly expanding area of Atlanta, Georgia. Since the plan is geographically constrained, it must show not only the vision and direction for the business but also describe the reasoning behind selecting the location. It must also outline in detail how the business will earn profit how the conclusions were drawn. This is some thing I had missed in my previous evaluation. The vision and direction are present in the plan however the support is missing and therefore the plan is not viable. For my revision, I will evaluate the Zara business plan, first on a higher level then, section by section. Following each evaluation, I will offer my suggestions for improvement if necessary. Whether or not the authors were able to paint a clear, concise, and accurate picture of how their proposed venture will operate and the amount of supporting evidence to backup their claims will be the overarching basis for evaluation.
Business plans are in many ways a company’s map, showing the path from founding to the achievement of its goals. A business must identify a target market with a need and a solution for the need. According to Jennifer A. Rivers, in her article titled The Structure of a Business Plan, the business plan “is supposed to concisely reflect profound strategic thinking while referring to both quantitative and qualitative data.” In other words, the plan must explain the opportunity, how the company plans on seizing it, and express how the company and its stakeholders will benefit. The Zara plan is made up of eight sections typical of most business plans, beginning with the executive summary and ending with the financial summary. The plan follows a pyramid structure beginning with the main highlights of the proposal and is followed in each subsequent section with more detail. A feature of the document’s structure that takes away from its clarity are the lack of a table of contents and appendices otherwise, there are no major flaws in the overall structure and flow of the plan. Zara identifies through the analysis of market research, National Restaurant Association data, and Atlanta Demographics an unmet consumer ‘want’ for ethnic foods and an eclectic atmosphere. The means by which Zara will fulfill this want will be to build a restaurant with a design based on market research and the recommendations of their Restaurant Consultant. The Zara concept will profit because their financial projections are based on practical experience of the owners in similar ventures, National Restaurant Industry cost averages, and analysis of Atlanta restaurant averages. The early sections of the Zara plan outline the basic concept clearly, concisely and describe the sources of data used for decision-making. The Zara business plan was evaluated in four main areas: revenue sources, key expenses, investment size and critical success factors. The methodology for the evaluation is from Note on Business Model Analysis for the Entrepreneur by Richard Hamermesh, Paul Marshall and Taz Pirmohamed of the Harvard Business School, published January 22, 2002. Revenue Sources – The sale of food and beverages is Zara’s main revenue source. This suggests that Zara follows a single stream of...
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