Feasibility Study and Analysis

Sultan Qaboos University
College of Economics & Political Science

Department of Economics and Finance
Feasibility Study & Analysis (FINA3355/10)
Spring 2019
The Gateway Restaurant Set-up and Consultancy LLC
Prepared by:
Basma Mansoor Al Shidhani (115018)
Iman Hamdoon Al Aamri (116623)
Manar Mohamed Al Shidhani (114537)
Prepared for: Dr. Saeed Al Muharrami

Date: 17 April 201
Table of Contents
1.0 Executive Summary ........................................................................................................ 5
2.0 Description of the Project ................................................................................................ 6
3.0 Market Analysis ............................................................................................................. 9
3.1 Industry Description................................................................................................... 10
3.2 Potential Market ................................................................................................................. 11
3.3 Market Outlets ................................................................................................................... 12
3.4 Market Trends .................................................................................................................... 15
3.5 Barriers ............................................................................................................................... 17
3.6 Customer Demographics ................................................................................................... 18
3.7 Competition ........................................................................................................................ 19
3.8 SWOT Analysis ................................................................................................................. 21
3.9 Sales Projection .................................................................................................................. 23
4.0 Technical Analysis ................................................................................................................ 25
4.1 Facility Needed .................................................................................................................. 25
4.2 Production Technology and Know-How .......................................................................... 26
4.3 Furniture, Vehicles, and Equipment ................................................................................. 28
4.4 Study the Accessibility ...................................................................................................... 28
4.5 Resources ........................................................................................................................... 29
4.6 Labor ................................................................................................................................... 34
5.0 Legal Analysis ....................................................................................................................... 36
5.1 Forms of Business Organization ....................................................................................... 36
5.2 Business Incentives ............................................................................................................ 36
5.3 Business Restrictions ......................................................................................................... 38
6.0 Organizational and Managerial Analysis ............................................................................. 41
6.1 Hierarchy and the Organizational Chart ........................................................................... 41
6.2 Lines of Authority and Decision-Making Structure ........................................................ 41
6.3 Business Founders ............................................................................................................. 42
6.4 Executive Management Team ........................................................................................... 42
7.0 Financial Analysis ................................................................................................................. 44
7.1 Estimate the Total Investment Requirements .................................................................. 44
7.2 Estimate Capital Structure ................................................................................................. 45
7.3 Prepare the Projected Five Years Financial Statements .................................................. 46
7.4 Calculate Different Ratios and Investment Decision Scenarios ..................................... 51
7.5 Sensitivity Analysis & Returns of Various Alternatives ................................................. 53
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8.0 Feasibility Study Conclusions .............................................................................................. 55
9.0 References .............................................................................................................................. 56
10.0 Appendixes .......................................................................................................................... 58
List of Figures
Figure 3.1: Interior Design Distribution System ....................................................................... 13
Figure 3.2: Distribution of Menu Packaging ............................................................................. 14
Figure 3.3: GDP of Restaurants and Hotels and Compensation of Employees ....................... 16
Figure 3.4: Five Year Sales Projection ........................................................................................ 24
Figure 4.1: Office Plan ................................................................................................................ 25
Figure 4.2: Workshop .................................................................................................................. 26
Figure 4.3: 3D Max Software ..................................................................................................... 27
Figure 6.1: Organizational Chart ................................................................................................ 41
List of Tables
Table 1.1: Feasibility Study Summary ......................................................................................... 5
Table 3.1: Costs of Promotion .................................................................................................... 15
Table 3.2: PESTEL Analysis ...................................................................................................... 16
Table 3.3: Consumer Demographics .......................................................................................... 18
Table 3.4: Corporate Demographics ........................................................................................... 19
Table 3.5: Competitive Advantage Analysis ............................................................................. 20
Table 3.6: SWOT Analysis ......................................................................................................... 21
Table 3.7: Expected Amount of Sales and Total Revenue ......................................................... 24
Table 4.1: Potential Required List of Furniture, Equipment and Vehicles ............................... 28
Table 4.2: Project Estimation ....................................................................................................... 29
Table 4.3: Raw materials needed for production ....................................................................... 30
Table 4.4: Natural Stones ............................................................................................................ 30
Table 4.5: Fabrics and Textile .................................................................................................... 31
Table 4.6: Metals ......................................................................................................................... 31
Table 4.7: Wallpaper ................................................................................................................... 31
Table 4.8: Paint ............................................................................................................................ 32
Table 4.9: Plaster ......................................................................................................................... 32
Table 4.10: Tiles .......................................................................................................................... 32
Table 4.11: Gypsum Board ......................................................................................................... 33
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Table 4.12: Wood ........................................................................................................................ 33
Table 4.13: Glass .......................................................................................................................... 33
Table 4.14: List of Skilled Labor Salaries ................................................................................. 34
Table 4.15: List of Un-skilled Labor Salaries ............................................................................. 35
Table 6.1: Business Founders ...................................................................................................... 42
Table 6.2: Executive Management .............................................................................................. 43
Table 7.1: Capital Costs ............................................................................................................... 44
Table 7.2: Pre-opening Expenses ................................................................................................ 45
Table 7.3: Total Investment ......................................................................................................... 45
Table 7.4: Capital Sources ........................................................................................................... 46
Table 7.5: Loan Amortization ...................................................................................................... 46
Table 7.6: Expected Amount of Sales and Total Revenue ........................................................ 47
Table 7.7: Depreciation and Loan Interest ................................................................................. 47
Table 7.8: Projected 5-Year Income Statement .......................................................................... 49
Table 7.9: Projected 5-Year Cash Flow Statement ..................................................................... 50
Table 7.10: Projected 5-Year Balance Sheet .............................................................................. 50
Table 7.11: Key Financial Indicators ......................................................................................... 52
Table 7.12: Other Financial Indicators ........................................................................................ 53
Table 7.13: Sensitivity with changing Sales ............................................................................... 53
Table 7.14: Sensitivity with Interest Rates ................................................................................. 54
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1.0 Executive Summary
Table 1.1: Feasibility Study Summary
Establishing a new The Gateway LLC for Restaurant setup & consultancy
services in Sultanate of Oman which will offer four main services: business
Project Description
idea consulting, décor and interior design managing, menu engineering and
packaging.
Shifts 1 shift per day

Production
Operation Days 250 Day/year
Manpower Total Number of Employees 16 employees
Owners’ Equity OMR17,000

Long-Term Borrowing OMR 25,500
Capital Sources
Cost of Long-Term Borrowing 3.00%
Repayment Period of LT Borrowing 6 years
Furniture, Fixture and Equipment OMR5,620.8
Investments Pre-Opening Expenses OMR30,734.57
Total Investing Cash Flow OMR36,862
Pre-Operating Period 6 Months
Year 1 Year 2 Year 3 Year 4 Year 5
NI (OMR) -12752.50 69596.7 106370.3 143798 187635.0
ROA -15% 43% 37% 32% 27%
ROE -300% 94% 59% 44% 37%

Feasibility
Indicators NPM -8% 28% 33% 37% 40%
IRR (Project) 110.57%

NPV OMR 81,394.24
Payback period 1.30
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2.0 Description of the Project
The Gateway LLC for Restaurant setup & consultancy services will enter the
consultancy and interior design industry. This sector is gradually developing and adding value
to the Omani economy. The company head office will be located in Al Khuwair region in
Muscat in Sultanate of Oman in a 185 m2 floor. The company is the first of its kind as it
specializes in providing consultancy services in every facet of restaurant management, whether
it be in the startup phase, designing everything from scratch; the growth phase, which would
encompass expansion of capacity in the dining area; maturity, a phase in which menu redesign
is crucial and quite common; decline, which may bring to bear a thorough review of concept
and macro menu trends in the industry along with a study of the internal processes and
operating efficiency to avoid closing and reemerge with a new concept and operating plan. The
Gateway Restaurant Consultants are ready to assist Restaurant owners to start their new
business or develop their existing business. The business seasoned industry experts will use
their extensive expertise to help new and existing restaurant owners with their foodservice
operations, starting from new concept development projects and operational assessments to
restaurant turnarounds, menu engineering, interior design, Packages and Brand development.
It can be challenging to enter the highly competitive restaurant industry, but with help of The
Gateway LLC, the restaurant owner’s advantage is unparalleled. The firm’s consultants will
help the restaurant owners incubate big ideas that will outmaneuver the competition and drive
all-important cash flow.
The company as a startup will provide four types of services which are: Brand and
restaurant concept development which has a fixed Price around (OMR 500), Interior design
and restaurant decoration has inconstant price depending on the cost of raw material, labor and
transporting cost. However, it is usually between (OMR 5,000-12,000), Menu engineering is
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a is a fixed price around (OMR 300). Lastly, packaging services has inconstant price it depends
on the cost of the packaging items and the quality of the printing ink and materials. Therefore,
the packaging for each project could cost (OMR 1,500-2,500).
The first type of customer is the customer who is going to purchase the whole services
as a package. The customer who is the restaurant owner will come and seek help from our
restaurant consultants who are located in the office, the first encounter will be to discuss the
business idea and the brand concept which is the first service to be provided in turn for a
consultancy service fee this service will be provided by the brand development consultant. The
second service which is interior designing will come in the second stage after discussing the
whole restaurant concept with the customer, the interior designer will discuss with the customer
in order to set the site plan and discuss about the related decoration materials along with the
costs. After that the customer will discuss with the graphic designer to design the menu and the
related items that should be included in it also will discuss the design of the packaging, the
materials to be used, the colors, the size, and the amount to be produced.
Regarding the interior design distribution system, It starts after the scheduled
appointment between the consultant and the restaurant owner agreed on specific interior design
that matched his requirements, then the process of identifying the resources needed (raw
material, human capital) will begin (either the firm will import from outside Oman, or order
existing raw material available in local stores), After that, The suppliers will transport the
needed raw materials to the firm workshop located in Ghala industrial area, and then the firm
will sign a contract with a driver to transport the finished elements to the restaurant venue for
building the décor. Moreover, Menu Engineering and Packaging distribution system starts after
the scheduled appointment between the consultant and the restaurant owner agreed on specific
Menu and Packaging that matched his requirements, then the design will be emailed to Al Wadi
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Press located in Al Wadi Kabeer region in Muscat. And once the Menus and Packages are
ready then the restaurant owner can come to the head office to collect them.
Furthermore, The Gateway LLC targets medium to high income restaurant owners
wither they were new owners or existing restaurant owners, also it targets small to large
corporations that own a chain of restaurants. The total capital costs for the Gateway LLC is
estimated to be OMR 6127.8. Under preopening expenses, the company will spend 30734.56
in the first 6 months, that includes salaries, Training, utilities, rent, trade license, Network and
Advertising. The time period from pre-operations until the business initiation is 6 months.
Meaning that the company will start its operations after 6-months pre-opening period.
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3.0 Market Analysis
3.1 Industry description
The Gateway LLC for Restaurant Setup & Consultancy services will enter two market
industries first consultancy industry and second interior design industry. According to an article
on consultancy industry growth it states that the consulting industry of Oman continued its
steady growth last year despite being one of the smallest in the GCC. The GCC consulting
market contracted to 6% growth, with Oman dropping down to just 3.5% in 2015.This year,
the combined GCC management consulting market is tipped for 8% growth, following upward
gains last year as the region’s governments backed in their economic diversification agendas –
with the public sector consulting spend growing by 7.3% .This consultancy industry can have
a much wider impact on overall business performance and the level of investment, and hence
growth and productivity in the economy (Consultancy Middle East, 2018). Second the interior
design industry is relatively large. According to the times of Oman newspaper there had been
a significant growth in the size of interior Design industry for the past three years. The
Restaurant Consultancy industry of this feasibility study and analysis is quite small and
relatively new. It describes firms that provide consultancy to new and existing Restaurants and
assist them in any aspect of their restaurant operation from Restaurant interior design to menu
engineering and so on… There is a possibility of establishing a Restaurant Consultancy
Company in the Sultanate of Oman because it is estimated that the industry will grow smoothly
since the nature of the industry is fairly stable and does not face any drastic changes and
restructuring. As a result, the demand for Restaurant Consultancy Services will increase. Since
Oman has seen a sudden increase in the number of restaurants being opened. The Gateway
LLC for Restaurant Set up and Consultancy services will target theses market segments i.e.,
Firms that own a chain of restaurants, existing restaurant owners and independent individuals
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that want to open new restaurants. The Gateway LLC for Restaurant Set up & Consultancy
Services will contribute to the Omani economy through increasing the efficiency and
effectiveness of Restaurant operations, which will then contribute to the country’s overall
Gross Domestic Product (GDP) and job creation.
The life-cycle of the industry is growing as the idea of introducing a Restaurant Consultancy
Company is not that new to Oman. Although there are some competitors in Oman that offer
quite similar services as The Gateway Restaurant Set up & Consultant Company, we can say
that the market structure of the industry is Oligopoly. Wherein, this feasibility study and
analysis considers some other firms in the Sultanate of Oman that ultimately assists and offers
similar operational services to restaurants. This industry consists of a direct medium firm
competitor i.e. Jawad Sultan Group that assists and offers some consultancy operational
services to restaurants. However, there are many indirect competitors like interior design
companies, Printing Press, that could offer different services to restaurants such as Brand
Development, interior design, menu engineering & packaging. However, The Gateway
Restaurant Consultancy Company will be the only one that offers a variety of services to
current or new restaurants at reasonable prices to help them operate effectively and efficiently.
There are a few barriers to entering this market and industry, because it is quite new,
and in order to establish a legal presence in Oman, the LLCs that are wholly Omani owned
must obtain certain legal requirements. It is challenging to enter this sort of market, as it is
unique and demands high total investment requirements, taking into consideration the existing
competitors and their competitive prices. Moreover, the competitive analysis further explains
and scrutinizes price competitiveness in which there will be other consulting companies and
interior design companies that are able to deliver similar services as the Gateway Restaurant
Consultancy Company, but it may not meet specific standards and quality.
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3.2 Potential Market
Restaurant Consultancy Firms are fairly new as they have recently entered the Omani
market. The current demand for Restaurant Consultancy firms is low since the restaurant
owners fail to know that these types of firms exist. However, the future demand is expected to
increase as the number of restaurants in Sultanate of Oman is expected to increase each month.
According to the times of Oman The Sultanate's GDP increased by 12.3 per cent at the end of
the second quarter of 2017, where 1.6 per cent was contributed by restaurants (Times of Oman,
2017). In addition, According to Alpen Capital, the food and beverage industry in Sultanate of
Oman has witnessed one of the fastest growth rates from 2010 with an increasing number of
Café shops, bakery and multi-cuisine restaurants to meet increasing retail spending trends and
population growth (Alpen Capital, 2017). New opportunities may rise for the Gateway
Restaurant Consultancy Company that will help the business capitalize on a changing trend, in
other words the increase in the number of Restaurants will lead to the increase in competition
between them, which will make it difficult for new entrants to enter the market. However, this
situation is good for the company, since it will lead the restaurant owners to seek the Gateway
Restaurant Consultancy help to help them sustain a competitive advantage and attract more
customers, meaning that the demand for the services that the company offers will increase.
Further, the diversified set of services that the company offer will increase, which will lead to
the increase in the chances of the Gateway Restaurant Consultancy to grow and make a profit,
as well as attract many local and international restaurant owners interested in the Restaurant
Consultancy sector. Oman market is witnessing a significant improvement, especially since
many unemployed people start to open their own restaurants and café’s which led to the
creation of jobs for Omanis. The Gateway Restaurant Consultancy Company will help these
owners achieve their goals by offering them their various services.
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3.3 Market Outlets
The target segments of customers for this business are independent individuals who want
to start up their own restaurant, existing restaurant owners and firms that own a chain of firms.
The distribution channels are made up in which it will assure the offered services will reach
the customers (Restaurant Owners) effectively. On site Consulting is considered to be the
firm’s main distribution channel, the consultant will meet and interact directly with the
restaurant owner and find out what he really needs then start making recommendations of what
he should do to fix his situation. For example, the restaurant owner will visit the main office
which will be located in Al Khuwair region in Muscat and meet directly with the restaurant
consultants. The restaurant consultant will meet with the owner and discuss on what areas that
the restaurant’s owner want help. If the restaurant owner wants help in interior design then he
will book an appointment with the interior design consultant, if the owner want help in brand
development then he will book an appointment with a consultant that has an expertise in that
fields . If the owner wants help in menu engineering and Packaging, then he will book an
appointment with a consultant that has an expertise in that field and so on. Regarding the
interior design distribution system, It starts after the scheduled appointment between the
consultant and the restaurant owner agreed on specific interior design that matched his
requirements, then the process of identifying the resources needed (raw material, human
capital) will begin (either the firm will import from outside Oman, or order existing raw
material available in local stores), After that, The suppliers will transport the needed raw
materials to the firm workshop located in Ghala industrial area, and then the firm will sign a
contract with a driver to transport the finished elements to the restaurant venue for building the
décor. The transportation expenses will be included, and costs will depend on the contract fee
agreed between the firm and the driver, also the distance between the Restaurant Consultancy
firm and the Restaurant venue location. (keeping in mind that the cost of M95 fuel to transport
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the equipment is 214 baizas per litre as of April 2019 (subject to change due to oil price
fluctuation).
Figure 3.1: Interior Design Distribution System
Regarding Menu Engineering and Packaging distribution system.it starts after the
scheduled appointment between the consultant and the restaurant owner agreed on specific
Menu and Packaging that matched his requirements, then the design will be emailed to Al Wadi
Press located in Al Wadi Kabeer region in Muscat. And once the Menus and Packages are
ready then the restaurant owner can come to the head office to collect them. The restaurant
owner is not charged for the transportation costs of bringing the menus and packages from Al
Wadi press, but these expenses are essential for the company’s financial statements. Since this
cost will depend on the distance between Al Wadi Press and the Restaurant venue location.
(Keeping in mind that the distance between the Restaurant Consultancy firm and the Wadi
Press which is located in Wadi Kabeer region in Muscat is around 20 km, and the cost of M95
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fuel to transport the Menus and Packages is 0.214 baizas per litre as of April 2019 (subject to
change due to oil price fluctuation).
Figure 3. 1: Distribution of Menu Packaging
The Prices are calculated depending on what the restaurant owner wants from the
Gateway Restaurant Consultancy Company. The interior design service Price will be calculated
depending on the cost of raw material and equipment used and the wages of human capital
working on that project, also it will include the transportation costs as previously mentioned.
In addition, the Menu Engineering and Packaging services Price will be calculated depending
on the costs of the design prepared by the firm’s consultants, also the printing costs will vary
depending on the quality of material used (Paper, Plastic ..etc.) and ink used, besides that it
will include the transportation costs as previously mentioned.
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Moreover, the marketing costs associated in promoting the Gateway LLC are illustrated
table (3.1):
Table 3.1: Costs of Promotion
Media Cost Per Day Total Costs
Billboards OMR 320 Per day Every quarter of the year
OMR 1280
Advertisement on Oman OMR 525 Per Day The day before the grand
Newspaper opening =OMR 525
Advertisement on social Media Every two months in a year=
-Instagram (OMR 8 per day) OMR 48
-YouTube (OMR 3 per1000 views) 20000 views = OMR 60
Website OMR 3.85 per 1000 views 20000 views = OMR 77
Total Cost OMR 1990
3.4 Market Trends
In order to highlight the important factors from external environment that affects the
business, PESTEL analysis is a useful tool to be used. It analyzes the political, economic,
social, technological and the legal environment that could positively or negatively impact the
way of doing the business. Table 3.2 shows the important factors along with their impact on
The Gateway Restaurant Consultants.
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Table 3.2: PESTEL Analysis
Type of trends Factor Positive Impact Negative Impact
Political International Trading Government stability Trade restrictions and
and peaceful relations tariffs
with other countries
Economic Growth in GDP of - Restaurants market is -Low oil prices will
Hotels and Restaurants growing, and affect earnings
thousands of new -Negative growth of
businesses are opening GDP from hotels and
each year restaurant in 2017
- Increasing compared to 2016
employment level in
the industry
Social Diversified social Rising spirit of The presence of low-
classes and cultural entrepreneurship in the income classes, means
values society less consumer
spending
Technological Technology - The existence of -High cost of
advancements Internet and Social investments in
Media will help technology
increase marketing -Privacy issues
efforts
- Easy contact with the
customers
- Internet of things
(IoT)
Legal Governmental rules - Government -Rules and regulations
and regulations: incentives and of issues of new
(Employment law, entrepreneurship license and the slow
Import law) funding procedures
- high required capital
Figure 3. 3: GDP of Restaurants and Hotels and Compensation of Employees
*Adopted from National Centre of Statistics & Information
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3.5 Barriers
To open any business there are several obstacles encountered during each stage of
running the business which could lead to high start-up costs. Barriers are different from one
project to another, there are several barriers the gateway restaurants consultancy company
could face.
The first barrier is the legislative barrier which is related to the legal procedures that
the company should follow in order to start the business. Legislative barriers include barriers
to obtain proper commercial license and the long regulatory procedures. There are rules
regarding the name of the company, the type of business, the commercial activities and the
location of business. Registration from different governmental bodies is required like, Ministry
of Manpower, Ministry of Commerce and Industry, Muscat Municipality Also the Royal Oman
Police. Furthermore, laws and regulations regarding the consultancy firms could be affected by
restaurants business laws like food control regulations that contains health and safety
regulations regarding many areas of the restaurant. The second barrier is the brand recognition
barrier and the difficulty of obtaining brand awareness. Because this type of business is new in
Oman it will take a lot of time to be recognized by restaurants and companies. The third barrier
is the high total investment requirement, due to the high capital costs and pre-opening expenses.
There are many requirements like business grantees and insurance that should be met for the
company in order to acquire this amount of capital from the financial institutions. The fourth
barrier is the related to the imports of business equipment and restaurant supplies there will be
tariff and quota barriers set by the government. In addition, there will be shipping and
transportation costs for these equipment which can be considered as the fifth barrier of entry.
The sixth barrier is the training and skills, employees of the company must have skills related
to restaurants consultancy industry, because this type of company is new in Oman, foreigner
people who are professional in this area are vital help the Omanis or new employees to obtain
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the basic skills, thus, there will be high costs of training, the company can send the employees
to professional companies in the field for example sending them to workshops in different
countries which requires a lot of spending.
3.6 Customer Demographics
The first targeted segment is individual consumers who are restaurant owners whether
new owners or owners of existing restaurants, both male and female from 24 years old and
above. Those are small restaurant owners located in Oman and have medium to high level of
income, of more than approximately 1,500 OMR, holding high school education certificate and
are part of medium to high social classes in the society.
Table (3.3): Consumer Demographics
Consumer Demographics Details

Gender Male and Female
Age 24 and above
Location Oman
Income Level Medium to high level of Income (1,500+)
Social class and occupation Medium to high social classes

Education High School and above
The company targets small to large corporate customers which are restaurants, located
in any region in Oman or companies who holds a supply-chain of restaurants. It offers the
customers with term loans, meaning that it enables the customer to purchase the service via
credit. Also, because the nature of the business requires getting paid the full amount only after
the service is completed, there is service-related credit terms. For the pricing strategy the
company requires an upfront deposit (only the half) to be paid for operational purposes before
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initiating the service and the full amount after the service is completed. There are discounts for
the bundle if more than one service is purchased.
Table (3.4): Corporate Demographics
Corporate Demographics Details

Industry Restaurants
Location All regions in Oman
Size of the company Any size (Small-Medium-Large)

Credit facility Term-loan
Pricing strategy - Half upfront deposit and full amount

after receiving the service
- Bundle pricing
3.7 Competition
The Gateway Restaurant Consultancy firm is structured under oligopoly competition
where a few firms are dominating the market. In this market structure, it is possible for many
small firms to operate in and none of which can keep the others from having significant
influence. For this firm there are two type of an existing local competitors which are the large
companies and the small one.
The first type of competitors is represented by large companies that provide a wide
range of services in the restaurant consultancy field. These services include market research
and analysis, the set-up of the concept, brand and overall operation of the restaurant, menu
engineering, décor and interior design management, staffing and training. Their activities and
services known of its high quality that managed and run by the competence of their highly
experienced team. However, the prices offered by these companies tend to be high compared
to the other small companies. These competitors considered to be reliable and credible. Jawad
Sultan Restaurants LLC is one of the significant local competitors in this field. In the other
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hand, the other type of competitors are the small companies and businesses which provide any
service that is similar to what the Gateway firm provides. Those competitors are the companies
of interior design and companies that provide marketing services such as brand creation and
packaging design. These companies offer specific and limited services with low to medium
prices. Their stuff has a moderate experience level and they provide low and medium service
quality. Usually these type of small business with low experience tend to be unreliable and
their reputation depends on the word of mouth.
Table (3.5) compares the firm with potential competitors in multiple aspects, which are:
services, price, quality, reliability, experience and reputation. An assessment of level of
importance is made to further elaborate on each competitive factor to the customer and was
given a rank where 1 = very important, while 6 = least important.
Table (3.5): Competitive Advantage Analysis
Factor The firm Strengths Weaknesses Competito Competitor Importanc

r #1 #2 e to
Customer
Services Four main excellent Limited Wide limited 3
services personaliz services range range
ed client compared to of services of services
service the
competitors
Price Medium to Dynamic High Low to 2

high - change in Medium
the price
Quality High Suitable High Low to 1

for all Medium
types of -
customers
Reliability Reliable Local and Reliable Unreliable 5

Accessible -
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Experience High Specialists High Medium 4
customer for every customer customer
service type of - service and service and
and service experience experience
experience
Reputation Credible Credible Word of 6
- - mouth
3.8 SWOT Analysis
SWOT analysis is conducted to create a framework of the internal strengths and

weaknesses and the external opportunities and threats in order to gain knowledge of what could
potentially impact the organization in its projects, processes and business decisions.
Table (3.6): SWOT Analysis
Strengths Weaknesses
- Oligopoly competition. - High transportation cost

- High quality service with creativity. - Unable to deal with multi-disciplinary
- Ability to establish excellent assignment.
personalized client services.
- Wide range of services.
- Strong relationship with suppliers.
Opportunities Threats
- Changes in design trends. - Increase in price inputs.

- New technology. - Dramatic changes in design and
- Growing demand. customer tastes.
- Global competition.
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Strengths
There are several strength points that will distinguish the Gateway Restaurant
Consultancy firm such as a limited competition, where there are few local competitors who
provide such range of services as this company offers. In addition, it uses a high-quality
products and materials to create its creative interior design. Another impressive strength of this
company that it is able to establish excellent personalized client service, since it can build a
unique design for each customer according to his ideas and expectations. Moreover, the
Gateway Restaurant Consultancy firm has a large range of services for restaurants including
business idea consulting, décor and interior design managing, menu engineering and
packaging. The company has a good relationship with the suppliers which will lead to facilitate
the company’ operations in different stages.
Weaknesses
The Gateway Restaurant Consultancy firm will suffer from two main internal
challenges. First, the high transportation expenses of raw materials and products such as a
decoration supplies and furniture which may be imported from abroad. Second, the firm may
face difficulties in dealing with multi-disciplinary assignments because of its small size that
may lead to lack of ability if the number of clients increase specially in the first years of
operating.
Opportunities
In the external environment, there are various opportunities that the company can
exploit to enhance its performance and to increase its revenues. There are significant changes
in the interior design and packaging trends that appears continually, with or without seasons.
Moreover, the firm can update its services and operations by using the new technologies and
innovations which will help it to attract more customers and generate good sales. Furthermore,
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the growing number of new restaurants will open windows of opportunities to raise demand
for the services that the Gateway Restaurant Consultancy firm offers.
Threats
The company may face some factors that could threaten its overall performance. One
of the threats is the increase in price inputs that can lead to upward pricing, which may not
satisfy the clients. Another threat is the dramatic changes in design and consumer tastes
regarding the colours and styles that can present challenges to keep paced with what is desired
compared to what is expected. In addition, there are some companies from neighbouring
countries that may provide cheaper or better technologies in their services compared to what
the Gateway Restaurant Consultancy firm offers. Therefore, the company must have sufficient
information about local and international competitors so that it can continue in the desired
direction.
3.9 Sales Projection
Having up-to-date and accurate sales projections will help the company to prevent
potential problems and to update its strategies. In order to predict the revenues at any period of
time, we need to calculate the costs needed to provide the service to customers and determine
the appropriate price. The firm set a fixed price for the brand developing and business idea
consulting which is five hundred Omani Rials (OMR 500). While, décor and interior design
managing has inconstant price depending on the cost of raw material, labour and transporting
cost. However, this service price for each project is usually between five-thousand to twelve-
thousand Omani Rials (OMR 5,000-12,000). For the menu engineering there is a fixed price
which is three hundred Omani Rials (OMR 300). In addition, the price of the packaging is
different according to the cost of the packaging items and the quality of the printing ink and
23
materials. Therefore, the packaging for each project could cost between one thousand five
hundred and two thousand five hundred Omani Rials (OMR 1,500-2,500) per year.
Table (3.7): Expected Amount of Sales and Total Revenue (OMR)
Years Year 1 Year 2 Year 3 Year 4 Year 5

Business idea consulting 4,000 8,000 10,000 13,000 14,500
Décor and interior design 51,000 102,000 136,000 170,000 212,500
Menu engineering 74,700 99,600 124,500 149,400 174,300
Packaging 30,000 40,000 50,000 60,000 70,000
Total (OMR) 159,700 249,600 320,500 392,400 471,300
As shown in the table above that the firm’s revenue is increasing continuously in the
first five years. The generated revenue from each service vary from another due to different
demand levels for each. Since the customer can take one offered service or all of them.
However, the total revenue grow significantly in the second year as the growth rate reaches
56.2%. While, in the following years the growth rate continues to rise with slight change, which
indicates an increasing number of customers who seek the services of the company. Therefore,
the revenue will gradually increase as displayed in Figure (3.4).
Figure (3.4): Five Year Sales Projection
Sales Projections
500000
400000
300000
200000
100000
0
Year 1 Year 2 Year 3 Year 4 Year 5
Business idea consulting Décor and interior design

Menu engineering Packaging
Total (OMR)
24
4.0 Technical Analysis
4.1 Facility needed
The gateway firm will be located in a rented office in a commercial area in Al- Khuwair,
Muscat. It will be situated in the first floor of a building near Badr Al Sama in Al Kuliah street.
The floor area of the office is 185 m2, and the cost for rent is 4.5/ Per Sqm which is about 832.5
OMR in each month. Figure (4.1) illustrates the main office plan. The office will consist of 5
office rooms, one office for the CEO, one closed office for each manager and a big office for
the three consultants. It will also include facilities like the waiting area, reception, toilets and a
pantry. The head office will be the main place to deal with the customers.
Figure 4.1: Office Plan
Moreover, the firm will have another related site for the operations related to the
restaurant interior designing business, it is a rented workshop for the decoration work, figure
25
(4.2) illustrate the site. The workshop will be located in Gala Industrial area, the price per
square meter is 1 OMR, a rented space of 150 m2 is required. Thus. the cost will be 150 OMR
per month.
Figure 4.2: Workshop
4.2 Production Technology and Know-How
The firm’s bundle of services requires some technologies to be achieved. For brand
development service, the consultant or the graphic designer will use a software to create and
design the brand’s logo and packaging style. Adobe Illustrator is a graphic design software that
will be used to create the logos and drawings for the customer’s brand as well as the promotions
for the company. While, the interior designer will visualize the décor and the interior design
through two different modern software which are 3Ds Max and Autodesk Revit software. 3Ds
26
Max is a 3D computer graphics program for making 3D animations, models, games and images.
Its tools used to shape and define detailed environments, objects, and characters and to Model
any place or thing. However, Autodesk Revit software is also used to produce a professional
detailed and complete model-based building designs and documentation. All these computer
softwares are known of their high-quality modeling capabilities and a flexibility to be used on
the Microsoft Windows platform. Moreover, the designer could use the email to send the
designs to Al Wadi press to print it. Thus, this process will minimize the transportation cost.
Figure 4.3: 3D Max Software
27
4.3 Furniture, Vehicles and Equipment
Table 4.1: Potential Required List of Furniture, Equipment and Vehicles
Item Quantity Cost Per Item Total Cost

Furniture
Office Desks
Consultants Desks 3 100 300
Managers Desks 3 150 450
CEO desk 1 200 200
Reception desk 1 100 100
Arm Chairs 24 25 600
CEO Arm Chair 1 50 50
Sofas 2 95 190
Meeting Tables 1 205.7 205.7
Managers Cupboards 3 100 300
Consultants Cupboard 1 175 175
Pantry Cupboards 2 135 270
Pantry shelve 1 65 65
Coffee and Tea Machine 1 57.7 57.7
Refrigerators 1 130 130
Pantry Sink 1 150 150
Water cooler 1 55 55
Decoration
Office Decoration - - 332
Equipment
Personal Computers 8 193 1544
Overhead Projectors 2 155 310
Consultants-Managers Printers/scan/photocopy 2 70 140
CEO Printer /scan/photocopy 1 26.5 26.5
Software & Database 3 92.3 276.9
Vehicles & Cars
Trucks (contract) 1 25 25
Total Costs 64 2355.2 5952.8
4.4 Study the Accessibility
As mentioned before, that the firm location will be in Al Khuwair region where all basic
infrastructure is available. The paved streets, different health, private and government
institutions are close to the company’s site. The rented site provides the required utilities which
are electricity and water. However, the firm will need to have a network and telecommunication
28
services in order to carry out its tasks and communicate with its customers and suppliers. This
service will simply provide by contracting with a telecommunication company which is Awasr
to offer 20MBPS for OMR100 per month.
The essential raw materials for the company and its activities, some will be available in
Oman and some other will require import from abroad. The company needs several materials
such as wood, metals, natural stones, fabrics and textile. Transporting of the materials and the
design accessories will done using the vehicles. It will be transformed among the suppliers,
workshop and the restaurant site.
4.5 Resources
There are several raw materials needed to complete the services provided by the
company. the restaurants interior designing requires raw materials such as, glass, natural
stones, fabrics and textile, plaster, metals, wood, wallpapers, tiles and gypsum boards. The
quantity and availability of raw materials varies, because it depends on what type of interior
design the restaurant owner wants.
In the first year it is estimated that there will be 6 projects. And in order to calculate the
yearly variable total cost , the amount needed per meter should be calculated. We estimated the
amount of each materials based on area estimations of each project. Table (4.2) shows the area
estimated for each project.
Table 4.2: Project Estimation
Area
Restaurants
1 100 m2
2 70 m2
3 250 m2
4 200 m2
5 150 m2
6 120 m2
29
Table 4.3: Raw materials needed for production
Availability
Amount
Raw Materials Cost in local
needed/year
Market
1 Glass 96 meters 20.5/ meter = 1947.5 Available
2 Natural Stones 110 meters 2.000/meter = 220 Available
3 Fabrics and Textile 100 yards 4.500/ yard = 450 Available
4 Plaster 221 litter 7.5/ litter = 1657.5 Available
5 Metal 1 ton 230/ton = 230 Available
6 Wood 96 meters 8/ meter = 768 Available
7 Wallpaper 12 rolls 9/roll = 108 Available
8 Tiles 876 tiles 4.5/tile = 3942 Available
9 Gypsum Board 445 meters 5/meter = 2225 Available
10 Paint 221 litter 9.6/barrel = 85 Available
Total Cost 11633 OMR
The criteria for selecting raw materials is presented in the next tables. Since the costs
of raw materials are much more expensive in the international market which will include
shipping costs and tariffs, the manufacturing company will purchase its raw materials from
local supplier
Table 4.4: Natural Stones
Comparison International Supplier Local Supplier

Supplier Sri Venkateswara Stone Juma and Sons Trading
Works
1 Price 1.400-2.000 R.O. / meter 2.000 R.O. / meter
2 Quality Medium quality Good quality
3 Availability Available Available
4 Meeting the specification yes
5 Availability of storage facility yes
6 Perishable special care needed yes
7 Ability to import yes
8 Quantity to be ordered 110 meters
30
Table 4.5: Fabrics and Textile
Supplier Shaoxing County Mulinsen Al Bawab Fabrics & more
Knitting Co., Ltd.
1 Price 0.300-1.0 R.O. / meter 3-4.5 R.O. /meter
2 Quality Low quality Good quality
8 Quantity to be ordered 100 yards
Table 4.6: Metals

Supplier Jinan Sino Steel Co., Ltd. AL Buraq Steel Industry
L.L.C.
1 Price 250-260 R.O./ton 200-230 R.O/ton
2 Quality Good quality Good quality
8 Quantity to be ordered 1 ton
Table 4.7: Wallpaper

Supplier Rebel Walls Al Essai Interior
Decorator
1 Price 400-500 R.O./mural 9-15 R.O/roll
2 Quality High quality Medium quality
8 Quantity to be ordered 9 rolls
31
Table 4.8: Paint

Supplier Janson Hardware Juma and Sons trading
1 Price 1.000-2.000 R.O/litter .400 – 1.000 R.O./litter
8 Quantity to be ordered 221 litter
Table 4.9: Plaster

Supplier Bell Plaster ltd Oman Plaster
1 Price 7.5 R.O./ litter 6 R.O./litter
8 Quantity to be ordered 221 litters
Table 4.10: Tiles

Supplier Marrazi Group Al Maha Ceramic
Company
1 Price 3.2-8 R.O./ tile 3-6 R.O./tile
8 Quantity to be ordered 855-897 tiles
32
Table 4.11: Gypsum Board

Supplier Baniyas Building Material Danoob trading Co
Company LLC
1 Price 2.8-11.9 R.O. /meter 2-11 R.O. / meter
Table 4.12: Wood

Supplier Dalian Wada International Majan Wood Co
Trading Co., Ltd
1 Price 12 R.O/meter 8 R.O./meter
Table 4.13: Glass

Supplier Xiamen Togen Building Juma and Sons trading
Products Co. Ltd
1 Price 9-32 R.O/meter 6-25 R.O./meter
33
4.6 Labour
The Gateway LLC will mainly need skilled employees, since it provides a consultancy
service that requires creative thinkers, analytical problem solvers and professionals with high
knowledge in order to deliver satisfactory service to the customers. Though, unskilled labours
are indispensable in the company because they will handle several tasks such as conducting the
decoration and transporting of materials. Table (4.14) displays a list of skilled workers the
company needs them to operate. The total number of skilled workers is 12 and the total cost of
all skilled workers is OMR 7,150 per month. The Omani employees represents 57% of the total
number of the firm’s workers. The non-Omani workers are Carpenters, Smith, Installation
workers and the cleaner.
Table 4.14: List of Skilled Labor Salaries
Particulars No. of Employees Monthly Salary (OMR)

Chief Executive Officer 1 1,100
Operations Manager 1 900
Financial Manager 1 900
Marketing Manager 1 900
Brand Development Consultant 1 800
Graphic Designer 1 800
Interior Designer 1 800
Electrician 1 325
Carpenter 2 200
Smith 1 100
Receptionist 1 325
Total 12 7,150
In addition, the firm has four unskilled workers who usually has lower educational
attainment and handle jobs that requires no specific education level or specialized experience.
34
As shown in table (4.15), the total monthly salary for all four workers is OMR 285. Thus, the
total monthly wages of the firm’s employees equal OMR 7,435.
Table 4.15: List of Unskilled Labor
Particulars No. of Employees Monthly Salary (OMR)

Installation workers 3 225
Cleaner 1 60
Total 4 285
35
5.0 Legal Analysis
5.1: Form of Business
The type of this business is Limited Liability Company (LLC), a separate legal entity
that is owned by 3 individuals, it is a mix between corporation and partnership forms of
business, it combines the characteristics of both. It has a limited liability meaning that the
partners are not personally obligated to the company’s debt and the liabilities are limited to the
value of the shares. While the taxes are paid by partners by distribution. Furthermore, the
owners are not managing the business which means that it is manager-managed, thus the
business decisions are not made by the business owners, but by the assigned board of directors.
The reason behind choosing this form of business is the need of a separate management to
manage the business in more professional way using specialized executives also according to
the new companies law that was published in 2019 there is no minimum amount of capital is
needed to be raised in this form of business (Oman Blog Law,2019).
5.2 Business Incentives
Based on the Capital Authority Market website it states that the government laws enable
the private sector to take the lead in the production process which will effectively contribute to
the growth of the economy and create employment opportunities for the citizens. Moreover,
the law is adequately flexible to accommodate the development in the business, finance and
the rapid changes imposed by technological revolution that require easing the procedures and
providing for simple methods to attract investments and creation of economic entities that
attain Sultanate of Oman future vision in triggering the role of the private sector in the national
economy. The Limited Liability Company (LLC) is the most common type of business entity
used in Oman. The business operates under a company name and ownership of the company is
in the form of shares in the capital of the company. Much like limited liability companies, the
36
liability for each shareholder is limited to the portion of their own capital contributions. In the
LLC the directors are personally responsible for the prudent management of the company and
are not required to be shareholders. There are many incentives when starting an LLC on Oman,
since, the law states that a Limited Liability Company, First, can be formed by two or more
natural or juristic persons whose liability is limited to the nominal value of the shares in the
capital of the company. Second, the new company’s law in article 234 stated that the number
of shareholders of a limited liability company shall not exceed 50. Third, there is no minimum
capital required for the establishment of a limited liability company under the new company’s
law. However, when a foreigner is a shareholder in a limited liability company, the minimum
capital requirement is R.O.150,000/-. 10% of the net profits after tax is required to be set aside
as a legal reserve before declaration of dividend till such a time as the reserve equals 1/3rd of
company's paid up share capital. The legal reserve is not available for distribution in the form
of dividends. In addition, the limited Liability company is exempted from personal income-
tax, all individuals can fully repatriate their savings. This tax law aids new companies to shape
its structure and flourish in the market. Furthermore, according to the Oman’s income tax law,
it seeks to tax the worldwide income of Omani entities and the Oman-source income of
branches and other permanent establishments. The income tax rates are as follows: 0% income
tax rate if the taxable income is OMR 30,000, however, if the taxable income is Above OMR
30,000 then the income tax rate is 12%, Other incentive of starting an LLC in Oman is that
According to The Ministry of Manpower Oman Labor Law regulates and governs the working
relationship between the employer and the employee. Also, it governs work contracts, overtime
pay, annual leave pay, worker/staff passage, working hours, industrial safety, labor dispute,
vocational training, etc. As per Oman Labor Law, total normal working hours are 48 per week.
During Ramadan, the hours of work will be reduced for Muslims employees to six hours a day
or 36 hours a week. Also, there is a huge effort done by banks to help new projects, in which
37
they are considered an important source of funding for the business. Oman Development Bank
lends small and medium companies that grant loans up to OMR one million (1,000,000).
Moreover, Oman has an incentive of allowing to open new office in Oman after getting the
approval from the Muscat Municipality. There are some other incentives related to electricity
and water. Based on Oman and Power Procurement Company, the electricity for cooperate use
costs 20 Baizas/KWH. Moreover, water is the main utility needed in the production process
which costs 3.5 Baizas/Gallon. Lastly, according to the Export.gov Foreign non – American
goods are imported according to Oman’s tariff schedule, which imposes modest duties
generally not exceeding 10 %. Under the US –Oman free trade agreement, both countries
agreed to duty free access and to phase out tariffs on a number of Products throughout the
years. Currently, imports into Oman are subject to customs duty under the customs law of the
GCC states. The duties are levied at a rate of 5% on most good except alcohol and tobacco.
5.3 Business Restrictions
In order to establish a legal presence in Oman, the LLCs that are wholly Omani owned
must obtain certain legal requirements and follow these steps:
- The company must submit a name for approval to the Ministry of Commerce and Industry
(MOCI). Under Omani law, the name of the new company cannot be similar to that of an
existing one. The MOCI also requires a higher starting share capital for companies with certain
words, such as “Oman”, in their name.
- Preparing the application form for Commercial Registry and submitting the following
documents to the MOCI:
• Omani shareholder documents where each shareholder must provide an MOCI
computer printout certificate of registration and Oman Chamber of Commerce and
Industry (OCCI) certificate and shareholders’ resolution.
38
• Standard company registration forms including constitutive contract and an authorized
signatory form, with names and sample signatures of each authorized signatory
reproduced. Where these forms is part of the constitutional documents of an LLC.
• Bank certificate which obtained from a bank in Oman and is used as evidence of
compliance with the LLC’s initial capital requirements.
- OCCI registration which is obtained immediately on the MOCI completing its registration of
the LLC, further governmental approvals may be required.
- Once the LLC is registered the company will need to organize and obtain the following:
• Approval from Muscat Municipality.
• Tax registration, where the company must register at the Tax Department of the Finance
Ministry, under the Income Tax Law. Registration involves submission of a completed
Declaration of Business Particulars form.
• Registration with the Royal Oman Police
• Registration with the Ministry of Manpower, to apply for labour clearances and visas
• Import/export license.
- Registering employees for social insurance, where a copy of the employment contract for
each employee must be submitted to the Public Authority for Social Insurance for the
employee’s social security registration purposes. The LLC must be obligated to the employee’s
retirement benefits contributions to the Public Authority in accordance to the Social Security
Law of Oman. However, the company must take into consideration that the government has
set the minimum monthly wage for Omani employees at OR325, divided into a basic salary of
OR225 and allowances of OR100. While currently there is no minimum wage or mandatory
increase for expatriate employees.
39
- The registered authorized signatory of the LLC must issue the company seal or stamp and it
must be accompanied by an attested signature specimen confirming the issuer’s authority to
obtain the stamp.
40
6.0 Organizational and Managerial Analysis
6.1 Hierarchy and Organizational Chart
Figure 6.1: Organizational Chart
CEO
Financial Marketing Operations Other Staff

Manager Manager Manager
Receptionist
Brand
Graphic Interior
Development
Designer Designer
Consultant Carpenter
Smith
6.2 Lines of Authority and Decision-Making Structure
The Chief Executive Officer (CEO) is at the top of the organizational chart, therefor
the CEO will have the majority of the decision power. Alongside the CEO, the Operation
Manager, Finance Manager and Marketing Manager will have some decision-making power if
it relates to day-to-day operations, where the decision of the CEO is not necessary. The
department managers also tend to the consultants beneath them and oversee their everyday
work. Otherwise, all major decisions are to be done by the CEO. In regard to Other Staffs, such
as the Receptionist, Driver and Cleaner, they do not have any sort of authority within the
workplace as they only make sure that day-to-day Operations are done accordingly.
41
6.3 Business Founders
Table 6.1: Business Founders
No. Name of the Founder Academic Background Previous Successful Business

Basma Mansoor Al BSc in Management
1 Interior Design Company
Shidhani Minor: Finance
Iman Hamdoon Al
BSc in Finance
2 Aamri Finance consultancy services
Minor: Marketing
Manar Mohamed Al BSc in Finance Chain of successful Restaurants
3
Shidhani Minor: Marketing & Coffee shop
The business is founded by three business women shown in Table above who had a
great experience in running and managing small and medium enterprises (SMEs) before.
Altogether Ms. Al-Shidhani,Ms.Al Amari & Ms.Al Shidhani worked in previous and
successful projects. Their experience in starting these businesses and managing it until
succession enabled them to acquire many skills and knowledge in starting a new business
which is being invested in the Gataway LLC for Restaurant Set up & Consultancy Services.
6.4 Executive Management Team
An Executive Management Team consists of high-ranking employees who work
together to manage a company and oversee its daily operations. They have a significant role,
since they set and implements the company strategy, sets its goals, and manages the general
success of the business. As displayed in Table (6.2), the company recruits individuals who have
good experience in their field of work. This will be an indicator for its high-quality service and
the reliability of the brand, which reflects the professionalism of managers. Mr. Ahmed Al
Hashmi is the CEO who sets the vision of the company and responsible for its activities.
However, the operations manager is Ms. Sara Al Habsi who has good experience in managing
quality and operation process. Mr. Hamed Al Amri is the company financial manager as a result
42
of his experience in the banking sector and strong abilities to handle the company’s financial
records. The marketing manager is Ms. Noor who has great ability in creating affective
promotions. With such an Executive Management Team, The Gateway LLC can continue
growing and obtain the trust of customers.
Table 6.2: Executive Management
Expecte
No Name Experience Job Title Role
d Salary
Makes major corporate
decisions and manages
Ahmed Al More than 8 Chief Executive
1 the overall operations 1,100
Hashmi years Officer
and resources of a
company
Oversees the process of

providing and
More than 5 Operations
2 Sara Al Habsi delivering of the 900
years Manager
resources and raw
materials.
Supervise the financial

activities of the
company, prepare
More than 5 Financial
3 Hamed Al Amri financial statements
years Manager 900
and make decisions
regarding financial
concerns.
Develops the
marketing strategy for
More than 3 Marketing
4 Noor Al Jabri the company, manages 900
years Manager
the sales and
promotions.
43
7.0 Financial Analysis
7.1 Estimate the Total Investment Requirements
The capital requirement for the Gateway LLC for restaurant set up and consultancy
services is a combination of costs found in the market, technical and organizational analyses.
Table (7.1) displays the capital cost for the Gateway LLC. Furniture’s, Fixtures and Equipment
(FF&E) is the total cost of all the items needed in the 185 m2 i.e. the lobby, offices (CEO,
Managers and Consultants offices), pantries and other areas of the Gateway head office which
is around OMR 5620.8. The installation for such equipment’s is excluded from the total capital
costs. But there is a section that includes the costs of restaurant décor installation and it’s
around OMR175. Also, the head office decorations costs are included and it’s around
OMR332.
Table 7.1: Capital Costs
Particulars Value (OMR)

FF & E 5620.8
Installation 175
Decoration 332
Total 6127.8
The pre-opening period is estimated to be 6 months. Pre-operational cost is assessed in
Table (7.2) where all the expenses are listed below. the cost of training employees is around
OMR 330, Rent of the head office is around 4995 OMR for 6 months, the rent of the workshop
is around OMR 900 for 6 months. The Utilities cost includes, 439 Gallons of water at a cost of
3.5 Baizas/Gallon, and the usage of electricity will be 210 KHW at a cost of 20 Baizas/KWH
for the 6months prior to opening for the Gateway LLC head office. The amount needed for
salaries for 6 months is around OMR 23160 . As for the Trade License cost, it is estimated
around OMR 200 , but the cost can be increased or decreased based on current Omani
legislation and government plans. In addition, the cost of Advertising and Promotion is around
44
OMR 331.67 for 6 months. And the required cost of head office Internet Network is around
OMR 600 for 6 months.
Table 7.2: Pre-opening Expenses
Particulars Value (OMR)

Training 330
Rent 5895
Utilities 217.902
Salaries 23160
Trade license 200
Advertising 331.67
Network 600
Total 30734.56867
The total investment comprises of the Gateway LLC Capital Costs, Pre-Opening
Expenses, and Working Capital which is estimated based on the demand of cash flow The
Gateway LLC needs is displayed in Table (7.3).
Table 7.3: Total Investment
Value
Particulars
(OMR)
Capital Cost 6127.8
Pre-opening Expenses 30736
Working Capital 5972
Total Investment 42836
7.2 Estimate Capital Structure
The Gateway Restaurant Consultancy Company has a total investment of OMR36,862.
It will be financed through 60% debt and 40% equity. In addition, the debt to equity ratio is
agreed to be 3/2, where the equity contribution is OMR17,000 which raised from the founders’
wealth and their families support. While, the long-term borrowing is OMR25,500 and the
45
source of this outstanding amount is Oman Development Bank with a 3% interest rate. The
table below illustrates the capital sources for the company.
Table 7.4: Capital Sources
Particulars Value
Promoters Equity 17000
Long term borrowing 25500
Cost of long-term borrowing 3.00%
Repayment period for long term borrowing 6 years
The loan from Oman Development Bank will be repaid in six years. Table (7.5) shows the
loan amortization table for the consultancy company.
Table 7.5: Loan Amortization
Year Beginning Balance Interest Payment Principal Total Payment Ending Balance
1 25500 765 4250 26265 21250
2 21250 637.5 4250 21887.5 17000
3 17000 510 4250 17510 12750
4 12750 382.5 4250 13132.5 8500
5 8500 255 4250 8755 4250
6 4250 127.5 4250 4377.5 0
7.3 Prepare the Projected Five Years Financial Statements
The Gateway Restaurant Consultancy Company expect to earn OMR159,700 total
revenues in the first year and the sales estimated to increase gradually to reach OMR 471,300
in the fifth year after the pre- operating period. The expected total revenue from the company’
services is shown in Table (7.6).
46
Table (7.6): Expected Amount of Sales and Total Revenue (OMR)
Years Year 1 Year 2 Year 3 Year 4 Year 5
Business idea
consulting 4,000 8,000 10,000 13,000 14,500
Décor and
51,000 102,000 136,000 170,000 212,500
interior design
Menu
74,700 99,600 124,500 149,400 174,300
engineering
Packaging 30,000 40,000 50,000 60,000 70,000
Total (OMR) 159,700 249,600 320,500 392,400 471,300
The firm will own three main depreciable items which are equipment, decoration and
furniture and the calculated depreciation cost is OMR1,185.56. The interest payment shown in
table (7.7), where the interest rate is 3%.
Table (7.7): Depreciation and Loan Interest (OMR)
Year Year 1 Year 2 Year 3 Year 4 Year 5

Depreciation 1185.56 1185.56 1185.56 1185.56 Year1185.56
Interest 765 510 382.5 255 127.5
The Key assumptions for the Gateway Restaurant Consultancy Company are:
▪ Omani companies income tax law binds companies that are fully owned by Omani's to
pay a tax rate of 15% for taxable income that is above OMR 30,000.
▪ We have assumed the monthly rent of the office is 4.5 OMR/ Per Sqm and workshop is
1 OMR/per Sqm.
▪ Fee on supplies purchased is 2% of total supplies cost.
47
▪ Fee on print and transport is 30% of total printing cost.
▪ In addition to the estimated number of projects (whole package services) there are some
separate consultancy services provides.
▪ Menu engineering number of services will increase by estimated fixed rate which is
33.3%.
▪ Revenue of ranged prices are based on average revenue.
▪ Price is assumed to be 9 Rials for 100 menus copy.
▪ 150-250 menu is printed for one restaurant in each year.
▪ Trade license fees for the ministry and the chamber of commerce is OMR43.
▪ Fees paid to the chamber of commerce is around OMR 33.
▪ Trade license renewal is around OMR 25 annually.
▪ Fees for second grade company registration 40 per annum paid to the Muscat
Municipality.
▪ Trade license is 10 OMR in the establishment of company.
▪ We have assumed that Insurance cost will decrease from year 1 to year 2 by 1%, from
year 2 to year 4 by 3% respectively, and from year 4 to year 5 by 4%.
▪ Raw materials is assumed to increase by 20% each year.
▪ Interest rate is 3% based on Oman Development Bank.
▪ From year 2 the No. of installation workers increased by 1 and by 2 in year 5.
▪ The No. of graphic and interior designer and carpenter and smith in the last three years.
▪ All numbers have been quoted in Omani Rials.
▪ It is assumed that inventory increases by 3% each year
48
The table below displays the company’s projected 5-year income statement.
Table (7.8): Projected 5-Year Income Statement
INCOME STATEMENT (All amounts are in OMR)

Year 1 % Year 2 % Year 3 % Year 4 % Year 5 %
Revenues
Brand Concept 4000 3% 8000 3% 10000 3% 13000 3% 14500 3%
Interior designing 51000 32% 102000 41% 136000 42% 170000 43% 212500 45%
Menu engineering 74700 47% 99600 40% 124500 39% 149400 38% 174300 37%
Packaging design and print 30000 19% 40000 16% 50000 16% 60000 15% 70000 15%
Gross Revenues 159700 100% 249600 100% 320500 100% 392400 100% 471300 100%
Less:
Cost of Service 120674 -75.6% 147001 -58.9% 173792 -54.2% 201143 -51.3% 229163 -48.6%
Promotions and advertising 331.67 -0.2% 331.67 -0.1% 1325 -0.4% 1990 -0.5% 1450 -0.3%
Direct expenses 121005.57 -75.8% 147332.17 -59.0% 175117.42 -54.6% 203132.72 -51.8% 230613.09 -48.9%
Gross Profit 38694.43 102267.83 145382.58 189267.28 240686.91
Rent 11790 -7.4% 11790 -4.7% 11790 -3.7% 11790 -3.0% 11790 -2.5%
Utilities 435.804 -0.3% 435.804 -0.2% 435.804 -0.1% 435.804 -0.1% 435.804 -0.1%
Salaries and Wages 4510 -2.8% 4510 -1.8% 4510 -1.4% 4510 -1.1% 4510 -1.0%
Insurance 700 -0.4% 693 -0.3% 672.21 -0.2% 652.0437 -0.2% 625.96195 -0.1%
Network expenses 1200 -0.8% 1200 -0.5% 1200 -0.4% 1200 -0.3% 1200 -0.3%
Trade license 126 -0.1% 65 0.0% 65 0.0% 65 0.0% 65 0.0%
Pre-opening expenses 30734.57 -19.2% 0 0.0% 0 0.0% 0 0.0% 0 0.0%
Depreciation 1185.56 -0.7% 1185.56 -0.5% 1185.56 -0.4% 1185.56 -0.3% 1185.56 -0.3%
Interest 765 -0.5% 510 -0.2% 382.5 -0.1% 255 -0.1% 127.5 0.0%
Overheads 51446.93 20389.36 20241.07 20093.41 19939.83
EBT -12752.50 -8% 81878.47 33% 125141.51 39% 169173.87 43% 220747.09 47%
Tax Expense 0 0% 12281.77 -5% 18771.226 -6% 25376.08 -6% 33112.063 -7%
Net Income -12752.50 -8% 69596.7 28% 106370.3 33% 143798 37% 187635.0 40%
49
Table (7.9) illustrates the Gateway company’s projected 5-year cash flow statement.
Table (7.9): Projected 5-Year Cash Flow Statement
Cash Flow Statement (All amounts are in OMR)

Year0 Year1 Year2 Year3 Year4 Year5
Cash flow from operating
Net income - -12752.5 69596.7 106370.3 143798 187635
Pre-opening expenses - 30,735 - - - -
Depreciation - 1,185.56 1,185.56 1,185.56 1,185.56 1,185.56
Interest - 765 510 383 255 128
(Inc.)/Dec in working 5,972 -36,402 -45,374 -98,426 -232,210
capital
Operating cash flow 0 25,905 34,890 62,564 46,813 -43,262
Cash flow from investing
FE&E -5,621 - - - - -
Pre-opening expenses -30,735 - - - - -
Investing Cash flow -36,355 - - - - -
Cash flow from financing
Equity 17000 - - - - -
Debt 25500 - - - - -
Interest -765 -510 -383 -255 -128
Principal repayment - -4,250 -4,250 -4,250 -4,250 -4,250
Financing cash flows 42500 -5,015 -4,760 -4,633 -4,505 -4,378
Net cash flow 6,145 20,890 30,130 57,932 42,308 -47,640
Cumulative cash flows 6,145 27,034 57,165 115,097 157,404 109,764
While, table (7.10) shows the company’s projected 5-year balance sheet.
Table (7.10): Projected 5-Year Balance Sheet
Balance Sheet (All amounts are in OMR)

Year1 Year2 Year3 Year4 Year5
Assets
Non-current Assets
FF & E 4742.24 3,557 2,371 1,186 -
Total 4,742 3,557 2,371 1,186 -
Current Assets
Cash 30,978 50,885 145,219 232,901 283,687
A/R 38,695 91,904 118,585 188,242 378,196
Inventory 11,633 15,123 19,660 25,558 33,225
Total 81,306 157,912 283,463 446,700 695,108
Total Assets 86,048 161,469 285,835 447,886 695,108
50
Liabilities and Equity
Non-current Liabilities
Long-term Debt 25,500 17,000 12,750 8,500 4,250
Total 25,500 17,000 12,750 8,500 4,250
Current Liabilities
A/P 56,300 70625 92,871 115374 179,211
Total 56,300 70625 92,871 115374 179,211
Total Liabilities 81,800 87,625 105,621 123,874 183,461
Equity
Equity 17000 17000 17000 17000 17000
R.E -12752.50 56844.20 163214.48 307012.26 494647.29
Total Equity 4247.50 73844.20 180214.48 324012.26 511647.29
Total Liabilities & Equity 86,048 161,469 285,835 447,886 695,108
7.4 Different Ratios and Investment Scenarios
In this section of the report the most important ratios are calculated and analyzed. As
shown in table (7.11), the capital expenditures associated with this project is 6127.8 OMR
which is represented by the costs of Furniture, Fixtures, Equipment, Installation costs and
Decoration costs of the main office. Because we got a rented space that is already decorated,
and the equipment are purchased through a wholesaler the capital costs are not too high.
Moreover, the most important ratio for deciding whether to accept or reject the project is the
Net Present Value (NPV). As demonstrated in table (7.11) the NPV is equal to 81,394.24 OMR,
which is a positive number, meaning that the project is profitable and will add value to the
shareholders. According to the NPV the project should be accepted. Furthermore, the project
Internal Rate of Return is equal to 84.27% meaning that the NPV is zero when R equals
84.27%. The discount rate was calculated using 3.06% Risk Premium and 1.90% Risk-free
Rate. The IRR is higher than the R, this would lead us to accept the project. In addition, the
payback period is 1.30 years -approximately 15.6 months- , the cut-off point for this project is
assumed to be 2 years. Thus, also, according to the Payback Period the project should be
accepted, because the company will recover its investment within 1.30 year which is less than
51
2 years. Hence, in accordance with the finding of NPV, IRR and Payback Period the project
should be accepted.
Consumer DemographicsTable (7.11): Key Financial Indicators

Key Financial Indicators
Capital Expenditure 6127.8
Net Present Value 81,394.24
Discount Rate (R) 3.78%
IRR 84.27%
Payback in Years 1.30 Year
Table (7.12) includes the other calculated financial indicators which are helpful to
support our decision. It is shown that, Net Income in the first year of operations is negative
meaning that the company starts the business with a Net Loss of 12,752. However, Net Income
becomes positive in the subsequent years. Net cash flows and operating cash flows are showing
healthy indicators, they are positive indicating that the business generates adequate cash flows
to maintain its operations for the 4 years period and has a careful management of cash inflows
and cash outflows. But, in the last year there was a change in working capital which resulted
in a negative OCF and NCF. In addition, as illustrated in the table the Net Profit Margin (NPM)
for the first year is negative meaning that the company spent a lot of money in that year,
obviously because of the pre-opening expenses. But after that the NPM became positive, the
company was generating more money than it spent. The ROA and ROE are showing healthy
indicators in the last four years. Though, in year 1 the ROE and ROA were negative because
of the m negative Net Income. To sum up, it is recommended to invest in this project because
of the positive NPV, the high IRR, the sufficient Payback Period and the healthy other financial
indicators.
52
Consumer DemographicsTable (7.12): Other Financial Indicators
Other Financial Indicators

Year 1 Year 2 Year3 Year4 Year5
Net Income (12,752) 69,597 106,370 143,798 187,635
Net Cash Flows 20,890 30,130 57,932 42,308 -47,640
Operating Cash Flows 25,905 34,890 62,564 46,813 -43,262
Net Profit Margin -8% 28% 33% 37% 40%
Return on Assets -15% 43% 37% 31% 27%
Return on Equity -300% 94% 59% 44% 37%
7.5 Sensitivity Analysis and Return of Various Alternatives
Sensitivity analysis is a useful tool to assess the profitability of the project under various
conditions. In this report the changes in sales and the interest rates were examined. In sensitivity
analysis 1, the sales were increased by 10% to assess the profitability under best conditions,
also, they were decreased by 10% to assess the profitability under the worst conditions. It is
shown in the table below that the project is still feasible under the best conditions but, not
feasible under the worst conditions where the NPV became negative.
Table (7.13): Sensitivity with changing Sales
Sensitivity #1
Base 10% Increase 10% Decrease
(Normal) (Best) (Worst)
NPV 81,394.24 202,884.99 -40,096.51
IRR 84.27% 138.9% 6.3%
Payback in years 1.30 0.87 2.36
Furthermore, in sensitivity analysis 2, the interest rate was changed from the base model
(3%) with a higher rate of 4% and a lower rate of 2%. As demonstrated in table (7.14) the
project remains feasible under each circumstance.
53
Table (7.14): Sensitivity with Interest Rates
Sensitivity #2
Base- 3% 2% 4%
(Normal) (Best) (Worst)
NPV 81,394.24 81,337.17 81,451.31
IRR 84.27% 84.24% 84.3%
Payback in years 1.30 1.30 1.30
54
8.0 Feasibility Study Conclusion
The feasibility study and analysis show that the Gateway LLC for restaurant set up and
consultancy services is a feasible and profitable project under best and normal conditions.
However, when the sales decreases by 10%, it appears that the project is not feasible. In
Contrast, Changes in Interest rate, shows that the project is feasible under best, normal and
worst conditions. This is illustrated in the sensitivity analysis, which depicts that the
profitability indicators are positive and quite promising. The Net Present Value (NPV) is
positive, displaying that the Gateway LLC will make profit and add value to investors. Further,
the Internal Rate of Return (IRR) is 84.27% .This indicate that the company is attractive for
investors. As a result, it is recommended to start Gateway LLC in Sultanate of Oman as the
project is feasible, Profitable and adds value to the Restaurant Owners, investors and Oman’s
economy.
55
References
(n.d.). Retrieved from https://www.awasr.om/en/package/business/journey/FBNB

Alpen Capital. (2017). GCC Food Industry. Retrieved from http://www.alpen-capital.com/gcc-
food-industry-report_february-22-2017.pdf
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https://www.planprojections.com/funding/how-to-calculate-working-capital-
requirement/
Consultancy Middle East. (2018). Consulting industry of Oman grows steadily amid ongoing
diversification. Retrieved April 15, 2019, from https://www.consultancy-
me.com/news/948/consulting-industry-of-oman-growssteadily-amid-ongoing-
diversification
DECOR SYSTEMS. (2016). 5 Good Reasons to Use Metals as Decorative Interior Lining.
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decorative-interior-lining/
Doing Business in Oman (n.d).Retrieved

April13,2019,fromhttps://www.pwc.com/m1/en/tax/documents/doing-business-
guides/doingbusiness-guide-oman.pdf
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https://www.investopedia.com/terms/b/barrierstoentry.asp
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https://www.investopedia.com/terms/n/negative-return.asp
Legislation governing companies in Oman. (2017, March 23). Retrieved from
https://oxfordbusinessgroup.com/overview/letter-law-legislation-governing-
companies-oman
Ministry of Manpower. (2012). Labor Law. Retrieved from
https://www.manpower.gov.om/Portal/Englishpdf/Service/toc_en.pdf
Oman Corporate Tax Rate. (n.d.). Retrieved from

https://tradingeconomics.com/oman/corporate-tax-rate
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Import-Tariffs
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Oman Law Blog. (2019, February). Oman's New Commercial Companies Law. Retrieved from
https://omanlawblog.curtis.com/2019/02/omans-new-commercial-companies-
law.html
PricewaterhouseCoopers. (2017, February 27). Oman: Major changes to corporate income tax
and withholding taxes. Retrieved from https://www.pwc.com/m1/en/services/tax/me-
tax-legal-news/2017/oman-major-changes-to-corporate-income-tax-withholding-
taxes.html
Revit | BIM Software. (n.d.). Retrieved

from https://www.autodesk.com/products/revit/overview
Setting up a company in Oman. (2016, January 20). Retrieved
from https://shieldgeo.com/setting-up-a-company-in-oman/
Times News Service. (2017). What’s driving Oman’s economy up from last year. Retrieved
from https://timesofoman.com/article/120678
Times News Service. (2017, February 22). Food consumption in Oman to grow at 4.5 per cent
to 3.9m tonnes in 2021. Retrieved April 15, 2019, from
https://timesofoman.com/article/103505
Times News Service. (2018, July 25). Oman's hospitality market to reach $1bn by 2022.
Retrieved April 14, 2019, from https://timesofoman.com/article/138749
Vera Interior Company D. (2018). Raw materials used in interior design. Retrieved from
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https://conceptartempire.com/what-is-3ds-max/
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https://jinansinosteel.en.made-in-china.com/product/HvEmfnPCIQpw/China-Zinc-
Coating-Zincalume-Aluzinc-Galvalume-Steel-Coil.html
‫تمويل الشركات‬. (n.d.). Retrieved from http://odb.om/home/service_details/3
‫وزارة الشؤون القانونية‬. (2009, March). ‫قرار وزاري بشأن تحديد نسب القوى العاملة الوطنية‬. Retrieved from
http://data.qanoon.om/ar/md/momp/2009-0321.pdf
57
Appendix
58
Appendix (a): Interview Transcript with potential customer
Interviewer: Iman Al Aamri
Interviewee: Mohammed Al Subhi ( Emoji Coffeeshop owner)
We are group of students conducting a feasibility study for opening restaurants set-up and
consultancy company that is specialized in offering three main services for restaurants, interior
design, menu engineering, packaging and brand development.
Iman: You as a business owner did you deal with an interior designing company to design
your restaurant or, you preferred to do it on your own? And how much did it cost you?
Mohammed: A company specialized in interior design did the interior design and the board
design for us and it costed us around 350 OMR for only the design and the decoration costed
us 8,000 OMR.
Iman: Did you work with graphic designers to design your menu? And how much did it cost
you?
Mohammed: Yes, we dealt with a company to do the menu design and it costed us 500 OMR.
Iman: How much do you pay for packaging on monthly or yearly basis?
Mohammed: I don’t know how much the monthly consumption is, we got plenty of materials
once we started the business and we still use them until now. Plastic cups for the different sizes
30000 piece, juice carrier also about 20000 pieces and napkins in thousands, and total cost for
them all is 4000 OMR.
Iman: Did you hear before about a restaurant consultancy company in Oman?
Mohammed: No, I didn’t. I heard about restaurant consultancy companies in Dubai but Oman
no I don’t remember.
Iman: If there was a restaurant consultancy company offering all of these services for you
whether individually or as a package. Are you willing to be their customer?
Mohammed: Yes, off course this would be more convenient for me. All of the services are in
one place it will be better than going to so many places to finish up your business.
59
Appendix (b): Interview Transcript with Jawad Sultan Group
Interviewer: Basma Al Shidhani
Interviewee: Financial Manager at Jawad Sultan Group
(Basma ): what are the pre- opening expenses?
(Financial Manager at Jawad Sultan Group): Training /Rent/Utilities/Salaries/Trade
license/Advertising/ Network
(Basma ): How long is the pre -opening period?
(Financial Manager at Jawad Sultan Group): 4-6 months
(Basma ): What are your direct and indirect expenses?
(Financial Manager at Jawad Sultan Group):
Direct expenses:
Cost of Goods Sold;25%-30%
Utilities:20 baiza /KWT for electricity ; and 3.5 baiza per Gallon
Interest rate: 6.5% at Bank Muscat and 3% at Oman Development Bank
60
* Profit/Loss Statement of Jawad Sultan Restaurants Consultancy
61
* Information about trade license from Ministry of Commerce and Industry.
62
63
Capital Costs (OMR)
FF & E 5620.8
Installation 175
Decoration 332
Total 6127.8
Pre-opening Expenses (OMR)

Training 330
Rent 5895
Utilities 217.902
Salaries 23160
Trade license 200
Advertising 331.67
Network 600
Total 30734.56867
Revenues
Brand Concept Year 1 Year 2 Year 3 Year 4 Year 5
Consultancy Service charge 500 500 500 500 500
No. of services provided 8 16 20 26 29
Revenues 4000 8000 10000 13000 14500
Interior designing Year 1 Year 2 Year 3 Year 4 Year 5
5000- 5000- 5000- 5000- 5000-
Consultancy Service charge 12000 12000 12000 12000 12000
Revenues 51000 102000 136000 170000 212500
Menu engineering Year 1 Year 2 Year 3 Year 4 Year 5
Consultancy Service charge and menu design 300 300 300 300 300
Printing Cost 70200 93600 117000 140400 163800
Revenues 74700 99600 124500 149400 174300
Packaging design and print Year 1 Year 2 Year 3 Year 4 Year 5
Consultancy Service charge 1500-2500 1500-2500 1500-2500 1500-2500 1500-2500
Revenues 30000 40000 50000 60000 70000
Total Revenues 159700 249600 320500 392400 471300
64
Manpower Costs
Annual
No. of Employees salary
Year Year Year Year
Particulars 1 2 Year 3 4 5 / Employee
Chief Executive Officer 1 1 1 1 1 13200
Operations Manager 1 1 1 1 1 10800
Financial Manager 1 1 1 1 1 10800
Marketing Manager 1 1 1 1 1 10800
Brand Development Consultant 1 1 1 1 1 9600
Graphic Designer 1 1 1 2 2 9600
Interior Designer 1 1 1 2 2 9600
Electrician 1 1 1 2 2 3900
Carpenter 2 2 3 3 3 1200
Smith 1 1 1 2 2 1200
Receptionist 1 1 1 1 1 3900
Installation workers 3 4 4 4 5 840
Cleaner 1 1 1 1 1 720
Total No. of Employees 16 17 18 22 23
Depreciation
Type of Assets Expected life of assets Purchase Cost Annual Cost
Equipment 5 2297.4 459.48
Decoration 5 332 66.4
Furniture 5 3298.4 659.68
Total Depreciation Cost 1185.56
Cost of service
Direct Labor 34920 34920 34920 34920 34920
IT systems 1820.9 1820.9 1820.9 1820.9 1820.9
Raw Materials 11633 13959.6 16751.52 20101.82 24122.19
Cost of Packaging 18000 24000 30000 36000 42000
Cost of Menu printing 54000 72000 90000 108000 126000
Transportation 300 300 300 300 300
Total cost of service 120673.9 147000.5 173792.42 201142.7 229163.1
65
Wacc Calculation
Capital Structure
Debt to total capitalization 60%
Equity to total capitalization 40%
Cost of Equity 4.96%

Risk-free rate 1.90%
Risk premium 3.06%
Cost of Debt 3.00%
Wacc 3.78400%
Payback Period
FCF Cumulative
-36355 -36355
OCF
25905 -10,450
34890 24,440
62564
46813
-43262
Payback Period 1.30
66

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Sultan Qaboos University

College of Economics & Political Science

The Gateway Restaurant Set-up and Consultancy LLC

Prepared for: Dr. Saeed Al Muharrami

Table 1.1: Feasibility Study Summary

Shifts 1 shift per day

Owners’ Equity OMR17,000

ROA -15% 43% 37% 32% 27%

ROE -300% 94% 59% 44% 37%

Indicators NPM -8% 28% 33% 37% 40%

IRR (Project) 110.57%

specializes in providing consultancy services in every facet of restaurant management, whether

all-important cash flow.

transporting cost. However, it is usually between (OMR 5,000-12,000), Menu engineering is

the packaging for each project could cost (OMR 1,500-2,500).

3.1 Industry description

engineering and so on… There is a possibility of establishing a Restaurant Consultancy

Gross Domestic Product (GDP) and job creation.

Consultancy sector. Oman market is witnessing a significant improvement, especially since

owners achieve their goals by offering them their various services.

the customers (Restaurant Owners) effectively. On site Consulting is considered to be the

Figure 3.1: Interior Design Distribution System

change due to oil price fluctuation).

Figure 3. 1: Distribution of Menu Packaging

will include the transportation costs as previously mentioned.

Table 3.1: Costs of Promotion

Media Cost Per Day Total Costs

Billboards OMR 320 Per day Every quarter of the year

Newspaper opening =OMR 525

Advertisement on social Media Every two months in a year=

-Instagram (OMR 8 per day) OMR 48

-YouTube (OMR 3 per1000 views) 20000 views = OMR 60

Website OMR 3.85 per 1000 views 20000 views = OMR 77

Total Cost OMR 1990

3.4 Market Trends

The Gateway Restaurant Consultants.

Figure 3. 3: GDP of Restaurants and Hotels and Compensation of Employees

*Adopted from National Centre of Statistics & Information

countries which requires a lot of spending.

3.6 Customer Demographics

are part of medium to high social classes in the society.

Table (3.3): Consumer Demographics

Consumer Demographics Details

Social class and occupation Medium to high social classes

the bundle if more than one service is purchased.

Table (3.4): Corporate Demographics

Corporate Demographics Details

Size of the company Any size (Small-Medium-Large)

Pricing strategy - Half upfront deposit and full amount

The Gateway Restaurant Consultancy firm is structured under oligopoly competition

companies and the small one.

their reputation depends on the word of mouth.

services, price, quality, reliability, experience and reputation. An assessment of level of

given a rank where 1 = very important, while 6 = least important.

Table (3.5): Competitive Advantage Analysis

Factor The firm Strengths Weaknesses Competito Competitor Importanc

Price Medium to Dynamic High Low to 2

Quality High Suitable High Low to 1

Reliability Reliable Local and Reliable Unreliable 5

3.8 SWOT Analysis

SWOT analysis is conducted to create a framework of the internal strengths and

Table (3.6): SWOT Analysis

- Oligopoly competition. - High transportation cost

- Changes in design trends. - Increase in price inputs.