Marco's Restaurant: Advisory Report

Topics: Balance sheet, Generally Accepted Accounting Principles, Income statement Pages: 9 (1595 words) Published: January 31, 2011
1.Problem Statement

Marco’s Italian Restaurant was founded in 1986 by Marco and his wife Maria in Birmingham. The restaurant achieved profit growth until 1998 and reaching a peak turnover of £3500 in 1994. However profits had a dramatic decline every month. In 2009 the restaurant monthly lost £1800. This deficit may lead to the restaurant facing bankruptcy within the next 6 months.

2. Analysis

2.1Company Management and Structure

Marco’s Restaurant lacks a formal management structure. Manager and staff responsibilities and roles are badly defined, as Marco uses autocratic leadership style. He has complete control over everything and no one is permitted to give any suggestions or ideas even it may bring positive effect for the restaurant.

2.2Financial management

Wasted ingredients£-385
Table 1 Marco’s loss/ month (301ENL coursework 2010-2011)
Marco’s Italian restaurant does not have a normal accounting system. That is because Marco didn’t realized how the money going and where they go to.

2.3Costs and Menu

Food cost plays a major role in food-service industry success or failure. The luxury menu and the high costs of ingredients are major reasons lead the loss of the restaurant. The complicated Italian menu confused customer and not matches the restaurant’s services and the old fashion environment. £1540(due to £385/week) wasted on stock each month is the main problem restaurant should be faced.

2.4Opening Hours and Staffing

*In the past, the breakfast and lunch provided around 30% of Marco’s turnover and profit. However, in recent years there has been a significant decline on breakfast and at lunchtime business. In this way restaurant should focusing the more profitable areas. *Besides during the pick hour manager of each department should available in the restaurant and responsible for their own roles. *Marco and Maria running their business like a family business. *Restaurant should have formal restaurant handbook.


The head-chef, Steven is an experience young stuff used to work in New York 5 start hotel. Assistant chef has drinking problem with low responsibility and quality of his job. Steven tried to give Marco some ideas for contemporary Italian cuisine that he developed but Marco insist on use the traditional cook style.

2.6Front of House

Manager responsibilities and roles are badly defined. Maria is not responsible for her job as a manager. She employs her sister working in the restaurant. Responsibilities, work efficiency and roles between manager and stuff are poorly define during the work.


Due to Giuseppe opening nearby, stands for a new competition for Marco‘s restaurant. The new restaurant takes over most of the marketing share since 2003. Giuseppe’s profit grew healthily year on year. In this situation Marco should developed new strategies to deal with the new strong competition in the local market.

2.8SWOT Analysis

*Restaurant area clean and tidy dining environment.
*Founded in 1986, has 24 years history
*Manager insists on use fresh ingredients offer traditional Italian food. *Experienced chief
*High ingredients cost
*59%(£385 divided by £657) wasted each week of stock
*£150/week losing on opening over time
Overstaffed daytime and cannot cover extra demand in peak hour * Employ non-trained staff
*The service and management style is old fashioned in the area * Prices are higher then competitions
*Marco did not accept any suggests from the stuff
*Refused improve the menu
*Insensitivity of the marketing change
* Good location, local offices are nearby the restaurant
* Offer lunchtime deals and special rates for large parties, can start a price war with Guiseppe’s Threats:
* Finances problem may lead the company bankrupted
*Competition takes most of the market share

3. Recommendations

Employ medium and...
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