Organic Food

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ORGANIC RESTAURANT BUSINESS PLAN

Presented to the Faculty of the Agribusiness Department California Polytechnic State University

In Partial Fulfillment of the Requirements for the Degree Bachelor of Science

By Jesse Adam Godsey June 2010

© Jesse Godsey 2010

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APPROVAL PAGE

TITLE: AUTHOR: DATE SUBMITTED:

A Business Plan for an Organic Restaurant Jesse Godsey June 2010

Dr. Carol Sexton Senior Project Advisor

Signature

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ABSTRACT

This study was undertaken to determine if it is feasible to open an organic restaurant in San Luis Obispo, CA. All collected data went into the development of a bare bones business plan for the organic restaurant. The report utilizes two techniques for analysis of this data. A strategic analysis was used to determine if the restaurant could be a legitimate competitor among the many local restaurants of San Luis Obispo. Strengths, weaknesses, opportunities, and threats were outlined, given weights according to their impact, and used to develop a SWOT matrix. Strategic goals were set after reviewing the matrix and a QSPM, quantitative strategic planning matrix, was created to determine which goal was worth pursuing. The final step in determining if the organic restaurant could compete in San Luis Obispo was to perform a competitive analysis against what were determined to be the top local competitors. Following the strategic analysis, a financial analysis was executed to determine whether the operation offered a profitable investment. This included an examination of startup costs and funding, as well as the creation of an income statement, statement of cash flows, and a balance sheet that were based off of a thirty-six month sales forecast. These financial forms made it possible to perform a break even analysis that had the final say as to whether or not the restaurant could be a profitable investment. The organic restaurant failed to break even after three years of business operations. While the strategic analysis indicated the organic restaurant could not only compete, but overcome the competition, the financial analysis indicated that opening this restaurant would be unfeasible. If the methodology were altered to include more in depth financial planning and analysis this decision could be reversed. iii

TABLE OF CONTENTS

Chapter

Page

I. INTRODUCTION……………………………………………………………………..…1 a. Statement of the Problem.…………………………………………………………2 b. Hypothesis………………………….…………………………………………..….2 c. Objectives of the Study…………………………………………………………....2 d. Significance of the Study……………………………...…………………………..3 II. REVIEW OF THE LITERATURE………………..……………………………………...4 a. Organic Food………………..…………………………………………………….4 b. Organic Food in Restaurants…...………………………………………………….8 c. Business Plans……….…………..……………………………..………………….8 d. SWOT Analysis………………….………………………………………………10 III. METHODOLOGY……………………………………...……………………………….12 a. Procedures for Data Collection………………...………………………………...12 b. Procedures for Data Analysis……..……………………………………………...14 c. Assumptions and Limitations……………….……….…………………………..17 IV. DEVELOPMENT OF THE STUDY……………………………………………………19 a. Data Collection……………………..……………………………………………19 b. Summary……………………………..…………………………………………..19 i. The Restaurant…………………………………………………...………19 ii. The Mission………………………………………………………...……20 iii. Location………………………………………………………………….21 iv. Management Summary…………………………………………………..21 v. Products and Services…………………………………………..………..22 vi. Market Summary……………………………………………….………..22 vii. SWOT Analysis………………………………………………………….24 viii. Financial Analysis……………………………………………...………..32 V. SUMMARY, CONCLUSIONS, & RECOMMENDATIONS…………………………39 a. Summary………………………………………………………………..……….39 b. Conclusions……………………………………………………………..……….39 c. Recommendations……………………………………………………...………..40 References Cited………………………………………………………………………………...41 Appendix………………………………………………………………………………………..43 Business Plan……………………………………………………………………………43 Equipment Costs………………………………………………………………………...63 Food...
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