Feasibility Studies in Restaurant

8 August 2016

This paper deals about the feasibility study of setting up a restaurant in Serendra. Serendra is one of the prime residential projects of Ayala Land, Inc. It is located between 11th Avenue and McKinley Parkway, Bonifacio Global City, Makati City Serendra is a 12-hectare garden community with European architecture style derived from Tegel Harbor and Germany Berliner Strasse master plans combined with the stone style house or “bahay na bato” architecture of the Philippines. Serendra provides a gracious suburban lifestyle within the conveniences of the city.

From Nicaraguan Jasmine trees, flowering trellises filled with thunbergia, swaying bamboo clusters to ponds filled with koi, Serendra provides a unique garden environment that provides the spirit with an overwhelming sense of calm. And within this private enclave, residents are able to enjoy exclusive amenities such as a dedicated spa, underground badminton, and basketball courts, multiple swimming pools, gyms, and many others. Hotel industry is one of the essential industries.

Feasibility Studies in Restaurant Essay Example

This industry serves the different customer in different aspects like taste, preference, price, quality etc. Apart from hotels, restaurants are the highly targeted places in Serendra. In this fast moving world, people do not have time to cook their own food and take it to their work place and even get ready with their breakfast. So, restaurants with different traditions of the south as well as north are started in and around Serendra. The United States is a rich and varied blend of peoples, religions, and cultures, and this diversity is reflected in its cuisine.

Succeeding waves of immigrants, including those arriving on the United States’ shores today, have brought new culinary traditions and adapted them to the ingredients, kitchens, and customs they found in their new homeland — ever expanding what is called “American food. ” Since our country is visited by different tourist all over the world. American dining will be the best choice for them to spend their every meal with. American cuisine is a combination of all cultures around the world and like English it is per se called universal food.

In addition, America has a method of serving hotel or restaurant food, in which portions of food are placed on plates in kitchen (except for bread and butter and salads which are served on the table) by the establishment’s employees and served to each guest by a waiter or waitress. The proposed study seeks to decide the feasibility of opening a quick-service American inspired Restaurant. The following discussion will provide the reader with an understanding of the background of the study, the purpose of this study, reasons why this topic was important and methods selected for data collection and analysis.

Statement of Problem The purpose of the study is to determine the feasibility of opening a fast food restaurant in Serendra, Makati City, Philippines. Data will be collected through observational research method and through a survey distributed to potential customers in Makati, Philippines. Research Objectives The following questions will be answered after the completion of the research: 1) What area can be identified as the market area of the proposed restaurant?

What is the customer profile of the market area of the restaurant, such as population size, consumer spending patterns and average household income, etc? 3) Who are the competitors of the proposed restaurant and how are they doing? 4) Which of the chosen locations is the most desirable one based on restaurant site selection guidelines? 5) Will the proposed restaurant be able to gain profit with the proposed pricing, operation hours, the estimated restaurant turn over rate, and estimated controllable and uncontrollable expenses?

Assumptions of the Study In view of the successful entry of American Inspired Restaurant into Serendra, established popularity of American Food in Philippine local market, and the fact that American Cuisine is like not only like by the Americans but also Filipino and other nationality, an assumption can be made that a fast food restaurant specializing in mixed American Cuisine and located in Serendra, Makati City, where 100,000 people currently live can be a success as well.

Definition of Terms The following terms are listed and emphasized to give clarity to the reader in reading the research: Accessibility: road capability and adequate ingress and egress of the proposed restaurant site. Customer profile: information of the customers of the proposed restaurant regarding their ages, incomes, occupations, their reasons for visiting the restaurant, and their frequency of their visit Demography: the statistical study of people and their characteristics.

Enclosed mall: a shopping center entirely inside a roofed structure, so that entrance to the mall is controlled by a limited number of entrances and most stores are accessible only via interior corridors Direct competition: the food service facilities that are competing directly with a specific menu of the proposed restaurant Generative area: concentrations that attract people and automobile activity Indirect competition: the food service facilities that are not competing directly with a specific menu of the proposed restaurant Market area: the geographical area from which a business draws its customers Seat turnover rate: The number of times each restaurant seat is occupied by different patrons during a particular meal period. Chapter II Literature Review

National Restaurant Association divides a restaurant feasibility study into five steps, which are 1) identifying market area and gathering of demographic data such as age, sex, income, dining-out habits and other characteristics of potential customers 2) concept development, which involves using the data about the population in the market area and forming and evaluating a restaurant concept that fits the area’s needs and preferences. 3) Site analysis, a process to determine whether the characteristic of the site and the competitive environment around the restaurant will support such a concept. 4) Competitor analysis, which involves investigating competitors in the market area through a competitor analysis worksheet.

Financial analysis, a process of specifying revenue generating criteria, computing estimated average-check and revenue figures, estimating operating expenses, analysing and interpreting the financial statement, and finally, developing an implementation plan. (http://www. restaurant. org/m~a~magArticle. cfm? icleID=T29h4e) This chapter will include published knowledge that correlates with the five steps excluding step two, because in this study the concept has already be firstly chosen, thus including four sections. The first section will look at literature about how a trade area or market area should be determined, literature of the demographic characteristics and consumers spending patterns of the market area.

The second section will comprise literature about competition analysis, and the third section will include literature about site-selection analysis for a start-up restaurant, and the last section will include literature of financial analysis. a. Market Area Identification B. Population Profile, and Consumer Spending Pattern of the Market Area After determining the market area of the restaurant, the following paragraphs will look at literature of the demographic profile and consumer spending pattern of market area. Demographic profile of the people in the proposed site is essential in determining whether or not to open a restaurant in a proposed site. Demographic profile includes the total population in the market area, the number of employed persons, working women, income level, population age, housing and family structure.

Among all the different aspects of demographic profile, total population of certain area reveals some information of the area in question, but it is the population profile, especially income distribution and age distribution, that reveals the information needed by any business person to make their decision. As Melaniphy (1992) indicated, “what matters is not the total number but rather the characteristics of those people.

A more realistic way of expressing population needs is to determine how many people you should have in the appropriate age and income categories. ” (P116). ” In more than 30 years of evaluating and selecting locations, I have found age and income to be the most sensitive demographic elements in identifying the right opportunities. “(P117). It can be found from Melaniphy (1992)’s statements that age and income distribution reveals the most how much eating-out need there is among the researched population.

Thus, in this case study, the researcher will focus on the two most important aspects of demographic characteristics, age and income distribution and also discuss other related demographic features. According to National Restaurant Association (1998),”in addition to the basic information on your potential customers gained through demographic studies, you will need to know more about their habits of eating away from home. ” But how to determine their eating-out behavior, National Restaurant Association (1 998) provides the following guidelines based on different types of restaurants and their targeted market segment. ” a. The average person (8 years and older) eats out 4. 1 times a week b.

Singles and married couples with no children eat out more frequently than families with children. ” c. As income increases, consumers eat away from home more frequently d. People 18 to 24 year old eat out more often than other age groups. e. households with a working female eat out more frequently than those with a nonworking female. ” Matching up these guidelines with demographic characteristics information provides the clue to the consumer spending behavior. In this study, population profile and consumer spending pattern will be collected mainly through surveys due to the lack of such statistics from the government. Moreover, Americans would essentially be one of my target customers.

According to my research almost more than 30,000 of the citizens of this country are Americans and they run as the second biggest contributor in the tourism in the Philippines, which produced arrivals of 364,506 for the first six months of 2013. This market constituted 15. 31% of the total and expanded by 2. 89% compared to its arrivals of 354,259 the previous year. Description Serendra, a distinguished enclave adjacent to Bonifacio High Street, is a venue for indulgence which will cater to your gastronomic delights, aesthetic pleasures, and personal desires. With its weaving walkways, welcoming water features, and wide open areas, Serendra offers a pleasant and stylish open-air spree.

In addition, Market Market and SM Aura are near the area. Average earners usually dine at Market Market but most of the people wanted the ambiance dissimilar from the malls. The Korean market continued to be the top tourist contributor for the country as it provided 585,282 arrivals for a share of 24. 59% of the total. This market is consistently growing with an increase of 23. 30% for the first semester of the year. As the first visitor market to surpass the 1 million arrivals last year, this market is projected to produce more visitors this year. The second biggest contributor of arrivals was U. S. A. which produced arrivals of 364,506 for the first six months of 2013.

This market constituted 15. 31% of the total and expanded by 2. 89% compared to its arrivals of 354,259 the previous year. There was likewise an increase of 7. 32% recorded by the Japanese market, which came in third by providing 209,812 visitors to the country. It shared 8. 81% to the total inbound traffic. The fourth biggest group came from China with arrivals of 199,157 and a share of 8. 37% to total visitor volume. This market recorded the highest increase in arrivals of 32. 11% among the top ten visitor markets of the country. The fifth biggest visitor volume was supplied by Australia with 103,286 arrivals and a share of 4. 34% to the total.

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