Business Plan for RealGood Food Restaurants

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Executive Summary

This restaurant business plan is for RealGood Food, a new small restaurant located in a new and trendy neighborhood of Denver, Colorado. RealGood Food will emphasize organic, sustainable, and unique food dishes, many of which are ethnic. This focus on organic and whole foods stems from RealGood Food's dedication to organic farming, animal welfare standards, and sustainable seafood. The restaurant will also rely on local farmers and food suppliers whenever possible. This will diminish the need for dependence on fossil fuels to transport products as well as promoting health and well-being by eliminating genetically modified foods.

Mission Statement

RealGood Food Restaurants is an establishment that desires to be a leader in the organic hot food bar business. We strive to provide nourishing, tasty, and wholesome meals that are friendly on the budget and good for the body. RealGood Food pledges to serve guests the highest quality and most nutritious foods that are void of any artificial colors, preservatives, or flavors. We also pledge to provide a rewarding and pleasant place of employment for each and every one of our workers.

Company Information

RealGood Food Restaurants was founded in 2012 by Nancy Jones and Mary Smith. Nancy Jones serves as President of the RealGood Food Restaurants and financial advisor, while Mary Smith handles employment, food and safety standards, and daily restaurant operations.

RealGood Food Restaurants employs a staff of approximately 200, which includes front of the house, back of the house, and daily operations as well as office employees in the home office location. The business location of RealGood Food Restaurants is located in Denver, Colorado on 16th Street Mall. The home office of RealGood Food Restaurants is located at 1000 South Broadway in Englewood, Colorado.

Objectives and Future Plans

RealGood Food Restaurants’ objectives for the first and second year of operations are:

- Turn in profits from the first month of operations.

- Maintain a 60% gross margin.

- Become one of the “Best New Restaurants in Denver” and featured on the local paper The Westword

- Offer health insurance plans for each and every employee of RealGood Food Restaurants

Keys of Success

RealGood Food Restaurants will focus on three keys to success in order to maximize operations and sales. The keys to success are:

-An intriguing restaurant design that is both visually attractive to all of our guests and is designed for the most efficient operations possible.

-A comprehensive marketing strategy campaign run by Ted Jones. This strategy will include ways to build a solid base of loyal guests at RealGood Foods and implementations of ways to maximize food sales.

- Full and complete employee training to ensure that our dishes are made according to specific organic and healthy standards.

Services

RealGood Food offers Denverites and those visiting downtown Denver a contemporary and trendy establishment to enjoy a wholesome, organic, and nutritious food bar in a relaxing and fun social environment. RealGood Food’s executive chef, Joe Johnson, will focus on his extensive collection of recipes that include fresh and exciting ingredients. RealGood Food predicts that many of the dishes that guests request will be Chef Johnson’s recommendations.

A multitude of the dishes that will be served at RealGood Food will feature ethnic recipes in order to round out a menu that is both diverse and exciting. From American and Indian cuisine to Chinese and Thai food, RealGood Food plans to emphasize organic and sustainable food, and this will fulfill a growing demand for organic meals in the restaurant industry.

The benefits of eating organic food are undeniable. According to Help Guide, studies have proven that “organic foods have more beneficial nutrients, such as antioxidants than their conventionally grown counterparts. In addition, people with allergies to foods, chemicals, or preservatives often find their symptoms lessen or go away when they eat only organic foods.” Additionally, organic produce contains fewer pesticides, is better for the environment, and is often fresher. This is means that it also tastes better as well. Also, RealGood Food only uses organically raised animals in their recipes. This means that they are not given antibiotics or growth hormones, and they are not fed animal byproducts.

Customers

RealGood Food will target four groups of people in their market promotion strategy. The first group is single people with above-average incomes, as this demographic is high in the downtown Denver area. The second group is younger people in their 20s to 30s who strive to live a healthy and organic life. The third group RealGood Food will target is women who want to slim down and watch their weight, a number which is constantly growing in the Denver area as well as around the country.

Management

RealGood Food has assembled a strong management team. Jane Doe will be the general manager of our RealGood Food location on 16th Street Mall. Ms. Doe has extensive management experience of organizations ranging from ten to 50 people. All of the finance and accounting functions will be run by Nancy Jones, who is also the President and one of the founders of RealGood Food.

In addition to management skills and financial control abilities, Ms. Jones will be a great asset responsible for keeping RealGood Food on track and profitable for all. RealGood Food also has Executive Chef Joe Johnson on their team. He will be responsible for the entire daily back of the house activities that are crucial to the smooth operation of the restaurant. Chef Johnson has over 11 years of experience and is a visibly notable fixture in the Denver community.

In terms of hiring employees, RealGood Food will make it a priority to avoid the stereotypes given to vegetarians and vegans. The company plans to mix up staff personalities in order to avoid creating an elitist-type environment. RealGood Food feels that this type of environment discourages potential guests and allows them to feel judged while they are dining at the establishment. RealGood Food strives to encourage different mentalities and backgrounds in order to reach many potential mentalities as possible.

Restaurant Facilities

Not only does RealGood Food take building structure and design in mind when choosing their restaurant location, but they also made sure to pick a building with a warm and inviting look and feel. Their goal is to provide guests with a comfortable and lovely atmosphere while they enjoy a wholesome, organic, and fresh meal from our twenty hot food bars. In addition to design, RealGood Food has taken measures to make sure that the entire building is green and LEED-certified. This means that all guests and employees of RealGood Food Restaurants can eat and work in a facility that is environmentally responsible and is a genuinely healthy establishment to work.

Market Analysis

RealGood Food Restaurants realizes that there will be strengths and opportunities as well as weaknesses and potential threats of the organic food business. The strengths of RealGood Food stems from our exciting menu and hot food bar items that are sure to be different than anything people in Denver have experienced. RealGood Food Restaurants plans to offer cuisine in many different ethnic varieties

RealGood Food has also taken into consideration the seasonal trends that may impact the business of the company. Since the location of 16th Street Mall is a tourist attraction, there are periods of time when the business will be slower than others, such as in January and February. RealGood Food plans to staff the restaurant accordingly in order to cut costs while still serving the needs of the guests.

The customer demand for organic and sustainable foods is growing at an amazingly fast rate. According to the United States Department of Agriculture Economic Research Service, “organic food sales in the United States have increased from approximately $11 billion in 2004 to an estimated $27 billion in 2012” (2013). The demand is only growing in the Denver area, as many health-conscious residents and visitors have expressed the desire for a hot food bar that contains delicious and organic foods. Organic eating is not a trend that will go away anytime soon, as its growth shows:

Organic food products are still gaining ground in conventional supermarkets as well as natural foods markets, and organic sales accounted for more than 3.5 percent of total U.S. food sales in 2012. Markets for organic vegetables, fruits, and herbs have been developing for decades in the United States, and fresh produce is still the top-selling organic category in retail sales. (United States Department of Agriculture Economic Research Service, 2013).

Meeting Customers’ Needs

As of now, there are only a total of three restaurants that serve organic food on 16th Street Mall. RealGood Food plans to rise above its competition within the second year of business. The company as a whole has made the pledge to surpass their competitors’ sales and exceed their guests’ expectations in order to meet the needs of potential customers.

The company has determined that the needs of the customers are not being met in the demographics of people in the Denver metro area who consider organic eating a necessity in their lives. While many organic eaters live outside of the Denver area and in areas such Littleton, Ken Caryl, and Highlands Ranch, RealGood Food plans to meet the needs of the guests that wish to travel to downtown Denver.

The Demand for Organic Food

While organic food can be more expensive, we at RealGood Food want to make our hot food bar as affordable as possible for our guests while still maintaining our monthly profit goals. According to Khalid Salaam, the price of organic food versus conventional food “can be anywhere from 15 to 100 percent higher” (2010). Furthermore, the labor involved in the organic food industry and the amount of food that can be grown is a cause for financial concern:

The Food and Drug Administration (FDA) defines organic in the procedures that farmers grow and process food. Because these terms are more stringent than conventional farming the practices are much more labor-intensive. Additionally, shunning the use of products like pesticides and synthetic growth hormones often results in lower product yield, which leads to smaller amounts of food that farmers can bring to the market. The consequence of this supply and demand paradigm is the inevitable price hike of organic foods. (Salaam, 2010)

RealGood Food Restaurants wants to support local farms in order to strengthen the local Denver economy and keep transportation fuel use low. The benefits of locally grown food are far worth the effort of obtaining them and using them in RealGood Food’s multitude of recipes. People who buy locally grown food and consider them a necessity in their diet will undoubtedly recognize both the financial and health benefits. For one, the financial benefits are well worth the cost of locally grown food since the money stays in the community. It also has the power to greatly strengthen the local economy, leaving more money to the farmers instead of marketing efforts.

Secondly, local foods use less fossil fuel to transport, which is better for the environment because less carbon dioxide is emitted in the air. Transporting produce a long distance requires a picking of the product before it is even ripe and then a gassing to ripen the produce. Transporting food a long distance also means that preservatives must be added in order to keep it stable until sale. Thirdly, local foods are harvested when they are ripe, which means that they are better products that are full of flavor. Because organic products taste better, more customers will desire the freshness of our hot food bar dishes.

Other Benefits of Eating Organic Food

There are no preservatives in organic food, and it produced on small farms and sold nearby. Organic farming is better for the environment than conventional farming because it reduces air pollution as well as water and soil pollution. Organic farming is also better for the environment because of the following reasons:

-Water is conserved

-Soil fertility is increased

-Soil erosion is reduced

-Less energy is used

Organic farming also involved animals that are organically raised. These animals are not given any antibiotics, growth hormones, or animal byproducts. The animals are also given plenty of space to roam as well as access to outdoors. This results in a healthier animal and reduces the risk of disease. The animals are also fed a diet that consists of only grass or hay, resulting in more omega-3 fatty acids.

The goal of RealGood Food Restaurant during the first year is to break even. The costs are split into the categories of direct costs, those directly associated with sales volume, and indirect costs, those that remain the same over the range of sales. The breakeven point should occur after the first eight months of opening.

(Sales Projection Table omitted for preview. Available via download)

Works Cited

"Organic Foods." Understanding Organic Food Labels, Benefits, and Claims. N.p., n.d. Web. 12 Dec. 2013. <http://www.helpguide.org/life/organic_foods_pesticides_gmo.htm#b

Salaam, Khalid. "How to Run a Successful Organic Restaurant BY Khalid Salaam." Inc.com. N.p., 13 Sept. 2010. Web. 14 Dec. 2013. <http://www.inc.com/guides/2010/09/how-to-run-a-successful-organic-restarant.html/1>.

"USDA ERS - Chart: Consumer demand drives growth in the organic food sector." USDA ERS - Chart: Consumer Demand Drives Growth in the Organic Food Sector. N.p., 8 Feb. 2013. Web. 11 Dec. 2013. <http://www.ers.usda.gov/data-products/chart-gallery/detail.aspx?chartId=35003&ref=collectionhttp://www.ers.usda.gov/data-products/chart-gallery/detail.aspx?chartId=35003&ref=collection>.