Nonfranchised Small Business Analysis
Evaluating New Business Opportunities MGT/418
Mel’s Country Café
Mel’s Country Café is located on the Northwest side of Houston, Texas. It has been a quaint family business since 1977. Although Mel’s has changed names on three occasions in that time, the owners stay true to their roots: homemade food, low prices, and happy customers. (Mel's Country Cafe , 2015) Mel’s specializes in down home, “feel good” food like Mama used to make, such as burgers, fried catfish, and chicken fried steak. The best selling burger that they have is simply called “The Mel Burger” and it features a full pound of beef, one half pound of bacon, and three slices of cheese. It was voted “best burger in town” by Texas Monthly in 2009. Maybe it is just Mel’s roots, or maybe it is just that “bigger and better” Texas attitude, but the small family café had to create a challenge burger. The challenge is to consume “The Mega Mel Burger” in less than two hours without getting sick. The Mega Mel is made of 24 ounces of ground beef, a full pound of bacon, one-quarter pound of cheese, and all of the trimmings. On order to get your name on the wall, you must be able to walk and talk without getting sick after completing the challenge. This challenge has created quite a stir of excitement around the café, and attracts new customers quite often. Mel’s business model is very simple and straightforward: keep things simple and keep people happy. They are offering a niche in the restaurant industry that is very desireable in today’s culture of chain restaurants and fast food. Mel’s Country Café invites you to slow down, take a deep breath, inhale the aroma of home cooked food, and remember “the good ol’ days” while enjoying a hot plate of food that is made from a long line of traditional country family table meals. You can almost hear Ma ringing the dinner bell when you walk in the door. The café keeps customers coming back by keeping their prices low because they understand the value of repeat customers. Training Requirements
If this business was purchased, there would be a need for a transitional turnover period in which the former owners taught the new owners about the recipes, the menu, the clientele, and the other in and outs of the business, such as where they purchase their supplies. Most importantly, the new owner would need to get familiar with the atmosphere of Mel’s Country Café in order to carry it into the future with its existing customer base intact. One thing to consider would be whether or not the existing staff would be willing to stay at Mel’s after the change of ownership. Small restaurants such as Mel’s rely heavily on a familiar atmosphere, so if all of the staff was replaced, the new owner would risk losing clientele. Issues to Investigate
Prior to investing in Mel’s Country Café, I would need to take a serious look at the finances of the business. Without a profit margin that would offer a return on investment, and purchase would be out of the question. Buying an entire business in going to come at a high price and that investment needs to have an assurance of return. I would want to know the price points and profit margins. They have to be satisfactory, because if you take over a business, you risk losing the entire customer base if you try to change to many things too quickly, such as the menu or the pricing. Another thing to consider would be whether or not it was possible to keep the business the way that it is now, but also make it more profitable. This can be done by increasing hours of operation or adding more menu items without disturbing the traditional ones. One thing that I would want to do is carry more hours. Mel’s is currently not open on Monday and I think that is a big opportunity lost, because people enjoy going out on Monday so that they won’t have to cook their own meal after a long day. I would also consider adding to the...
Please join StudyMode to read the full document