The opening of a new restaurant concept in South Africa

Abstract

This new business venture proposal focuses on the restaurant industry. The proposal evaluates the notion of introducing a new restaurant concept into the restaurant market. The restaurant’s name will be “The Residency” and will be referred to as ‘the restaurant’ throughout the proposal. Within the market chefs either open their own restaurants or work within a restaurant. This idea looks to change the conventional way of thinking buy inviting chefs from around the world to take up ‘residency’ within the restaurant for a predetermined amount of time. A conclusion was found through the below research, that a 6-month period is the optimal period for this tenner. During a chef’s tenner at the restaurant they will have full creative licence to create a menu that both resembles and inspires them, while educating the market about the country and cuisine that they cook. The entire restaurant will be focussed around the chefs from the menu to the décor and waiters’ outfits. A literature review has been completed that looks at what a restaurant requires in order to be successful. This includes the likes of the innovation process, various models that evaluate the performance of a restaurant, the innovation process that relates directly towards restaurants, lean start-up methodology, and the 3-p’s of service marketing. All of the mentioned literature has been compiled to identify whether or not the idea is feasible and provide an insight into what is required when opening a restaurant. Quantitative research will be conducted through the use of an online survey, in order to further the understanding of the market and whether or not the idea is viable. The research was conducted though a cross-sectional methodology, and the population was chosen at random. Furthermore, analysis was conducted on the collected data and represented in descriptive and inferential statistics. This was done in order to make educated decisions regarding, the market is prepared to adopt and further gain an insight into the feasibility of the restaurant. The restaurant will be opened by the founder, Hylton Sonnenberg. The team will comprise of strategic individuals that will help the restaurant quickly find efficiencies Page 2 and help maximise profits. While, a lead start-up methodology will be employed the need of staff within a restaurant will be imperative towards the success. However, all staff will be trained within all the aspects of the restaurant in order to ensure continuity and a unique dining experience. It is concluded that through the different models used to evaluate the market, a new restaurant can be introduced if certain criteria are met. Through the understanding of all the below analysis and market understanding, it is clear to see that the market is ready to be disturbed and the relevant criteria for the introduction of “The Residency” are in fact met. FThe Residency will require an investment of R5, 000, 000. Of this R1, 000 ,000 will be put up by the founder. The balance will be raised through the likes of investors and venture capitalists. It is clear though the financials below that the restaurant is a feasible idea, making profits and paying dividends within the first year. Furthermore, through the analysis of the NPV conducted the discounted cashflow of the business returns at more than R12, 000, 000. This further proves the sustainability, profitability and feasibility of the proposed business venture.