Kamakis Restaurant

Kamakis Restaurant,
P.O. Box 0845-00100,
Nairobi, Kenya.

Website: www.kamakisrestaurant.com
Email address: kamakisrestaurant@gmail.com
Tel: +254 20 6535006
+254 20 6960000

CEOs: Mr & Mrs Paul Kamau

Managing Director: Apollo Mwiti
Sales Manager: Kevin Mutua
Accountant: Imelda Ngina
Procurement Officer: Faith Muindi

Created on: 1st January 2018

Non-Disclosure and Confidentiality Agreement

 The undersigned, hereby agrees that all financial and other information that is has and will
receive concerning Kamakis Restaurant is confidential and will not be disclosed to any other
individual or entity without prior written consent.

The Information shall remain the property of Kamakis Restaurant and shall be returned to
Kamakis Restaurant promptly at its request together with all copies made thereof.

Recipient acknowledges that no remedy of law may be adequate to compensate

Kamakis Restaurant for a violation of this Agreement and Recipient hereby agrees that in
addition to any other legal or other rights that may be available in the event of a breach
hereunder, Kamakis Restaurant may seek equitable relief to enforce this agreement in any court
of competent jurisdiction.

__________________ __________________________
Date Signature of Recipient

TABLE OF CONTENTS
1.0 Executive Summary.................................................................................................... 5
2
 1.1 BusinessObjectives...............................................................................................................5
1.2 Mission Statement.............................................................................................................. 5
1.3 Guiding Principles.............................................................................................................. 6

2.0 Company Overview........................................................................................................ 7

2.1 Ownership.............................................................................................................................. 7
2.2 Legal Form ........................................................................................................................... 7
2.3 Start-Up Summary................................................................................................................. 7
2.4 Location and Facilities........................................................................................................... 8

3.0 Products & Services............................................................................................................. 9

3.1 Daily Operations and Production........................................................................................... 9
3.2 Competitive Comparison........................................................................................................ 9
3.3 Suppliers................................................................................................................................ 9
3.4 Management Controls ......................................................................................................... 10
3.5 Administrative Systems............................................................................................... 10
3.6 Future Services .................................................................................................................. 11

4.0 Marketing Plan and Implementation ...................................................................... 12

4.1.1 Strengths....................................................................................................................... 12
4.1.2 Weaknesses....................................................................................................................
13
4.1.3 Opportunities.................................................................................................................. 13
4.1.4 Threats ........................................................................................................................... 13
4.2 Strategy Pyramid........................................................................................................... 13
4.3 Unique Selling Proposition (USP)................................................................................ 13
4.4 Competitive Edge .......................................................................................................... 14
4.5 Marketing Strategy and Positioning................................................................................ 14
4.5.1 Positioning Statement ....................................................................................................
14 4.5.2 Pricing
Strategy ............................................................................................................. 15
4.5.3 Promotion and Advertising Strategy ........................................................................... 15
4.5.4 Website........................................................................................................................... 15
4.5.5 Marketing Programs ...................................................................................................... 15
4.6 Sales Strategy ................................................................................................................ 16
4.6.1 Sales Forecast ................................................................................................................
16 4.6.2 Sales Programs..............................................................................................................
16
4.7 Legal .............................................................................................................................. 17
4.8 Milestones....................................................................................................................... 17
4.9 Exit Strategy.................................................................................................................... 17

3
 5.0 Organization and Management...................................................................................... 18
5.1 Organizational Structure ................................................................................................... 18
5.2 Management Team........................................................................................................... 18
5.3 Management Team Gaps.................................................................................................. 18
5.4 Personnel Plan........................................................................................................ 19

6.0 Financial Plan .................................................................................................................. 20

6.1 Important Assumptions .................................................................................................... 20
6.2 Start-Up Costs ..............................................................................................................20/21
6.3 Source and Use of Funds.................................................................................................. 22
6.4 Break-Even Analysis ................................................................................................... 22/23
6.5 Projections.................................................................................................................... 23/24
6.5.1 Projected Profit and Loss........................................................................................ 23/24
6.5.2 Projected Cash Flow ................................................................................................... 25
6.5.3 Projected Balance Sheet ............................................................................................. 26
6.6 Business Ratios ............................................................................................................... 27
6.7 Hourly Labour Schedule ................................................................................................. 28
6.8 Weekly Sales Projections ................................................................................................
29

4
1.0 Executive Summary
The Kamakis Restaurant will be a moderately priced 86 seat restaurant offering family style food
and service. Roasted chicken, pot roast, steaks and pork chops along with classic hamburgers,
wraps and generous salads are all on the menu. We will offer specialty selections including a
lighter options and smaller portions for a children’s menu.

The restaurant will be family owned and operated by Mr. & Mrs Paul Kamau. Together they
have over 25+ collective years’ experience in the restaurant and catering industry.

The Kamaus’ will be leasing a 3,400 square foot space located at Garden City Shopping Centre,
an existing retail centre located along Thika Road Superhighway, Nairobi. The site was
previously leased as an Italian Restaurant. Although the location was previously utilized as a
restaurant, the former tenant removed the majority of the furniture, fixtures and equipment which
will need to be replaced. The location will also require some additional renovation to update the
lavatories and increase table space in the dining area.

The décor will feature wood accented chairs with blue and white checked table cloths. Dinner
style tables will be surrounded by wooden chairs with comfortable seating cushions.

Sales projections assume 800 customers per week resulting in weekly sales of just over Ksh.300,
000 or Ksh.14, 400,000 annually. This equates to around Ksh.20, 000 per square foot in sales
annually which positions Kamakis Restaurant as a highly desirable concept for ownership in a
table service market where
Ksh.100, 000 to Ksh.200, 000 per square foot is considered moderately profitable and therefore a
good investment. Total start-up costs will be Ksh.20, 000,000, Ksh.10, 200,000 of which will be
contributed by the owners and the remainder will be secured by a proposed bank loan.

1.1 Business Objectives

The primary objectives of the business plan for Restaurant are below:
• To be the premier home-style restaurant in Nairobi City
• To provide quality meals at reasonable prices with exemplary service
• Achieve Cover ratios of 1.00X at each lunch and dinner serving
• To achieve Prime Cost Ratios lower than 65%
1.2 Mission Statement
Our Mission is to provide a unique and relaxing dining experience – similar to dining at
home. We will strive to achieve this goal by: 1) by providing menu items incorporating
quality ingredients at reasonable prices, and 2) we will be mindful of the well-being of our
customers and staff– treating each and every one with dignity and respect – just like we
would at our own home!

5
1.3 Guiding Principles
1. Being Mindful of our Customers and our Staff
Coinciding with our family values, we will treat both our customers and staff in a
manner in which we ourselves would want to be treated (or better!)
2. Gratitude
“An attitude of gratitude” shown to our customers, employees and vendors – because
without their input, service, labour and time, our business would not be here without
them!
3. Our Service
Provide the warm and friendly service expected from a family-style restaurant
creating an informal, comfortable environment which will make the customers
satisfied and want to return again and again.

1.4 Keys to Success

• Repeat business. Every customer who comes in once should want to return, and
recommend us. Word–of–mouth marketing is a powerful ally.
• Hire top notch chefs and offer training to keep the chef on top of his/her game, and pay
top wages to ensure they stay with us.
• Location. Convenience is essential to us; we need to be close to our market because we
are not trying to get people to travel to reach us. • A variety of menu offerings with
a “down home” theme, reasonably priced to establish credibility, but not so high as to
limit customers.

6
2.0 Company Overview
The Kamakis Restaurant will be located along Thika Road Superhighway, Nairobi. The
restaurant will be wholly owned and operated by Mr. & Mrs Paul Kamau. The restaurant will
serve a variety of classic home-style favourites from pot roast and mashed potatoes to patty melts
and vanilla ice cream.

The restaurant will be open 7 days a week with hours as follows:

Monday 11:00 am – 9:00 pm
Tuesday 11:00 am – 9:00 pm
Wednesday 11:00 am – 9:00 pm
Thursday 11:00 am – 9:00 pm
Friday 11:00 am – 10:00 pm
Saturday 11:00 am – 10:00 pm
Sunday 12:00 pm– 5:00 pm

2.1 Ownership
The restaurant will be owned by Paul Kamau. Paul Kamau began his restaurant career at
the age of 15 working in a quick-service foodservice operation and earned his way through
college as a server and bartender. After earning his degree, he worked for a regional
restaurant chain and an independent fine dining restaurant. In these organizations he held
the positions of Assistant Manager and then General Manager.

Rachael Kamau received her Culinary Degree from the University of Nairobi. After
graduation she was employed by a local chain restaurant and then at a Five Star Hotel
within the city. Betty will be employed as the Kitchen Manager.

With the high turnover of help for start-up restaurants, we will rely on family to fill in
where required until we are off the ground and making a profit.

2.2 Legal Form

Kamakis Restaurant will be organized as a sole proprietorship, wholly owned and operated
by Mr. & Mrs Paul Kamau as a Traditional Home-Style Restaurant. Kamakis Restaurant
is registered in the county of Nairobi.

2.3 Start-Up Summary

The cost to open the restaurant is Ksh.20, 000,000. The majority of the expenses are in
furniture fixtures and equipment totally Ksh.11, 000,000. The location requires some
build-out and renovation totally Ksh.5, 000,000 and will require approximately 30 days to
complete. The Kamaus will sub-contract the work themselves.

Ksh.9, 800,000 of the start-up costs will be funded by the owners. The owner’s source of
funds is a combination of liquid assets and marketable securities, primarily from their
existing catering business.

7
 2.4 Location and Facilities
The 3,400 square foot restaurant will be located along Thika Road Superhighway, Nairobi.
The restaurant is located in a major traffic area, at the intersection of major University
Campuses and colleges.

Kasarani, a suburb of Nairobi City has a population of over 500,000 according to the 2010
Kenyan Census Report. The residential population in the immediate area is comprised of a
mixture of single family and multi-family housing. The median household income is
Ksh.300, 000. Major employers include Universities and banks.

3.0 Product and Services

3.1 Daily Operations and Production
Kamakis Restaurant will be open 7 days a week for lunch and dinner requiring multiple
shifts. Paul will write the schedules. The schedules will be written in a manner that will
8
 allow the ability to increase or decrease hourly labour according to sales volume in order to
maintain a consistent labour cost control.

Proper labelling and rotation techniques, accompanied by ample storage facilities will
ensure that high quality prepared product will be sufficiently available to meet the demands
during peak business hours. Replenishment and ongoing preparation will continue during
off peak business hours.

Paul Kamau will be responsible for ordering, receiving and maintaining sufficient
inventory to meet production demands. Ordering schedules will be staggered with
perishable products being ordered multiple times per week to preserve freshness. Standard
grocery and supply orders will be ordered less often, according to a predetermined schedule
and storage capacity.

Mr. Paul will rely on operational checklists to verify that each work shift has been properly
prepared for and to insure the operational standards are followed before, during and after
work shifts.

The restaurant layout, including the dining room, kitchen and serving line, has been
designed for efficiency and flexibility to accommodate the fluctuation in customer traffic
and peak meal periods.

Upon arrival, guests will be greeted immediately by either the assistant manager or a server
and asked for the seating preference. Drink orders will be taken and guests can munch on
our complimentary rolls. Once the customer’s order is taken, the order will automatically
be printed to a requisition printer located in the grill area. The grill cook will use the
printed ticket to keep track of orders and place the meal under the heating lamps until the
order is complete. The kitchen preparation line has been designed to be operated by a
minimum staff of 1 line cook and a maximum of 4 cooks. This design allows line staffing
to be adjusted to the business volume. Shift changes for all staff will involve clean-up,
restocking and preparation. All monies will be settled at the end of each shift. The closing
shift will involve designated closing duties that will leave the restaurant clean and fully
prepared for the next day.

3.2 Suppliers
Because of their years of experience combined with their existing catering business, Paul
and Rachael Kamau have established relationships with qualified suppliers. These
suppliers can provide reasonably priced products, delivered according to the schedule.

3.3 Management Controls

The Kamaus will practice sound management procedures in order to control costs, insure
quality of product and provide friendly customer service. The following systems will be
used by management:

9
 Order Guide: The restaurant will use an item specific order guide to track order history
and maintain designated levels of product in inventory.

Weekly Inventory: Management will conduct a weekly inventory to determine valuation

for use in the preparation of weekly profit and loss reports.

Daily Inventory Tracking: Daily inventory will be taken on specific items. Movement
will be compared to sales data to ensure designated products have been properly accounted
for.

3.4 Administrative Systems

With a limited staff, it is crucial that the Kamaus remain current with daily cash outlay.
The purchase of a POS system will immensely help them with these daily administrative
reports:

Daily Cash Control. Sales and receipts recorded by the POS system will be compared to
actual cash and credit card deposits on a daily basis. Acceptable over/short amounts will be
limited to Ksh.500 per day. Discrepancies greater than Ksh.500 will prompt management to
conduct an immediate audit to account for the difference. Monthly totals will be compared
to actual P&L statements for accuracy. Cash, debit card and credit card receipts will be
deposited in a deposit.

Weekly Prime Cost Report. Paul Kamau will prepare a weekly report that shows the
gross profit margin after cost of goods sold and labour cost has been deducted from the
sales revenue. The prime cost for this type of restaurant is expected to range from 60% to
65%. Proper control of the prime cost is the single most effective measure of
management’s ability to operate the restaurant.

Purchasing Records/Payables. A part time bookkeeper will process and record invoices
and credits daily. Reports detailing cash expenditures, payments by check, and accounts
payable transactions will be readily available. Check disbursements will be prepared by the
bookkeeper. Check signing authority for the general operating account will be given to the
general manager.

Payroll Processing. Payroll checks will be issued bi-monthly. Paul Kamau will run
reports from the time & attendance system, make necessary adjustments, and prepare for
transfer to the payroll system. Payroll will be processed by a payroll processing service.

3.5 Future Services

Kamakis Restaurant has future plans to provide catering services for family reunions,
weddings and other events desiring a “home-style” menu. This could potentially become a
large portion of gross sales. The Kamaus are targeting Year 2 and at that point, a sales
agent would be hired to directly market the products for daily delivery or catered functions.

10
4.0 Marketing Plan and Implementation
Kamakis Restaurant will position itself as the premier home-style restaurant in the suburb
Nairobi City. We will do this by providing quality home style meals, prepared with quality
ingredients at a reasonable prices. Customers will enjoy the quaint surroundings inside with the
wood tables and checked table cloths. Our restaurant will provide a relaxed atmosphere and
when customers walk in they will be greeted by warm smiles and greeted just as they were
arriving home.

11
The chains have tried to create home-style restaurants but where they have failed is in the
personal aspect of the business. The POS system known as “The Expediter” used to monitor
inventories and time meals has replaced one of the most important aspects of a restaurant – the
friendliness of the staff! And in light of this, a handful of chain restaurants are beta testing self-
pay tables!

Our customers will enjoy our standard menu fare, along with seasonal menus so that we can
better take advantage of cost savings and stay current with some of the food industry trends.

At Kamakis Restaurant we plan to be the premier restaurant to work for as well. We believe that
the restaurant industry is a great place to begin one’s career or pursue full-time. In fact,
according to the Restaurant Association, nearly half of all adults have worked in the restaurant
industry at some point during their lives, and more than one out of four adults got their first job
experience in a restaurant. At Kamakis Restaurant we believe that our restaurant will provide
job opportunities both for the entry level applicant was well as for the part-time worker searching
for flexibly in job hours. We will pay our employees a competitive salary and believe we can do
so by meticulously keeping our records, including daily review of the Prime Cost Report, and
utilize Cost Accounting Systems, to prevent inventory shortfalls. We will be proactive with our
employees by scheduling regular performance reviews, and provide bonuses and other incentives
to motivate our staff. We will also provide our employees with the most current training
programs regarding safe food handling, and worker protection. (Additional information
regarding our employees is explained in Section 5.1 which follows).

Kamakis Restaurant will also remain current with current industry marketing tends. In addition
to a website with our menu, map and driving directions, we will also have a Facebook page and
utilize other social media such as Twitter. We will team up with Safaricom to offer money
transfer services like use of till number and playbills. We will offer a loyalty club and birthday
club which recent reports indicate increases earnings as much as 15%.

4.1.1 Strengths
• Prime location with easy access
• Exceptional staff with the can do attitude. Combined 25 years in the
restaurant industry
• Because owner has catering industry experience, he already has established a
customer market and approved vendors
• Due to our small size, we believe we can provide exceptional quality by hand
selecting our market specials when compared to our larger corporate
competitors
• The same concept holds true in our staffing requirements, by hand selecting
our employees we will strive to offer unsurpassed service when compared to
our larger competitors

4.1.2 Weaknesses
• Recruiting and retaining quality employees
• Tight margins will allow little wiggle room for error

12
4.1.3 Opportunities
• Little barriers to entry allows for immediate business opportunities
• Offer additional catering services

4.1.4 Threats
• Government mandates (restaurant operation, food safety, and worker
protection at the federal level and health, sanitation, safety, fire at the local
level)
• Rising operating costs
• Building/maintaining sales volume
• Supermarkets and convenience stores
• Consumers that believe that meals at home are healthier than those prepared
in restaurants.

4.2 Strategy Pyramid

Strategy: Be the City’s premier Home-Style Food Restaurant in Customer
Satisfaction.
Tactics: First create awareness-- our signage on the front of restaurant will bring
Customers to us and once inside, we will immediately acknowledge the
customer with the warmest and most sincere greeting and begin the
service process anticipating repeat customers.
Programs: Provide employee training on customer service and retention; offer
ongoing training programs for employees keeping them current on
industry trends and food safety. Keep track of employee’s progress
through performance reviews and offer employees incentives attracting
and retailing customers. Employ Mystery Shoppers. Employ the use of
surveys both at the table and online.

4.3 Unique Selling Proposition (USP)

Kamakis Restaurant will be able to offer home-style meals for a reasonable price in a
comfortable ‘home-like’ setting. The average check price is expected to be between
Ksh.800-Ksh.1500 which appears in line with industry standards below Ksh.2500.
Because of our current expertise with vendors, and our excellent credit, we can negotiate
better credit terms than say someone brand new starting a restaurant. We will also be able
to keep our menu reasonably priced by offering menu items that take advantage of
seasonal produce further reducing price. Finally we will keep our prices in check by
meticulous monitoring of our controllable expenses – keeping close eye on our Prime
Cost Report and Inventory. By initially employing family members who will work for
lower and reduced wagers, for example, we can further reduce our controllable expenses.

4.4 Competitive Edge

Kamakis Restaurant competitive edge is in its people. We truly believe that your business
is not only as good as your products (meals) but the quality of your staff as well. Our
staff is a reflection of us. Initially, we intend to employ our family members who will
work for lower and reduced wages. Our long term goal is to hire team members that are
13
 truly hand selected and have the same honest to goodness family values we do. And
unlike our big chain competitors, because of our lean size, we can turn on a dime when
economically pushed and make changes quickly allowing us to be proactive. (Whereas
our corporate competitors have to adhere more closely to their company policies thus
impeding their reaction time)

4.5 Marketing Strategy and Positioning

We realize the success of Kamakis Restaurant will have to be achieved by doing more
that serving great food, and providing friendly service. We will utilize a marketing plan
to build customer traffic. At Kamakis Restaurant we will continually strive to win more
customers by being proactive rather than reactive in our marketing efforts and stay current
with popular industry trends.
We will achieve these goals by using the following:
• Database: We will begin our campaign by marketing to our existing database of
customers. We will email fliers announcing our grand opening. We will continually
update our database by providing a fishbowl for business cards in the lobby and offer
a weekly or monthly drawing.
• Loyalty Program/Birthday Program. Kamakis Restaurant will offer a
birthday/loyalty club proving a complimentary hamburger or chicken sandwich or
wrap to the for the birthday person. A recent report from the National Restaurant
Association explained how this simple technique can increase revenues as much as
15% due to repeat business.
• Our restaurant team will also be active in the local community and we plan to take
an active role by participating, sponsoring, and donating to local churches, sports
clubs or teams in the market area.
• We will also strive to develop rapport with local business as a quick, comfortable
lunch choice. In the future, we plan on establishing a marketing campaign to call on
the local business in the market area, deliver samples, and encourage them to
consider our restaurant as the restaurant of choice for their next business luncheon

4.5.1 Positioning Statement

Kamakis Restaurant will be the premier home-style dining restaurant along Thika
Road Superhighway. We will offer reasonably priced meals, in a warm, relaxed and
comfortable setting. We have a wide selection on our menu and also have menu
options for lighter fare as well as a children’s menu. We are open 7 days a week and
unlike our chain competitors, our servers won’t try to be your best friend our rush
you thought your meal. Our name says it all “Traditional Home-Style Restaurant - -
honest to goodness food served to you by honest to goodness people!”

4.5.2 Pricing Strategy

At Kamakis Restaurant, cost accounting is important, since the profitability of
individual dishes can vary significantly and will initially determine the cost of the
menu items. We will take advantage of our excellent credit terms with our suppliers
and will also update our menu to take advantage of seasonality for example in local
produce items. We will also closely monitor the Prime Cost Report which focuses on
the controllable expenses of Cost of Goods Sold and Labour. As a new start-up we

14
 can currently control employee cost by hiring family members who will work for
low and reduced wages.

4.5.3 Promotion and Advertising Strategy

• Location- The restaurant will be located along the busy Thika Road
Superhighway.
• Word of Mouth – We already have a database of existing catering customers
and will rely heavily on this method to attract and grow new business.
• Participate with Costco as Small Business of the Month – We will leave
our menu, a fishbowl for business cards and a small ‘homey’ display with the
retailer announcing us as new entrants in the local restaurant arena.
• Direct Mail - Bulk mailing either directly to potential customers or by
including a postcard in a value-pack-type mailing.
• Event Marketing -We plan on joining our local chamber of commerce and
utilizing their networking services for our grand opening

4.5.4 Website
• We will stay current with industry trends and have a webpage, email address
and telephone numbers. Our menu, map, and hours of operation will be
easily accessed. In the future we may consider Facebook page or twitter
pages.

4.5.5 Marketing Programs

• Our initial marketing campaign will consist of contacting our databases
clients and notifying them of our grand opening. We will seek the use of a
local mailing service program to assist us in the implementation of the
campaign
• Ongoing- we will meticulously keep our database current and use the
Constant Contact program
• Loyalty and Birthday Club members will notified of upcoming special menu
items and to alert them of our catering service.

4.6 Sales Strategy

Customer service is of the utmost importance. Customer surveys estimate that only 1 in 20
customers that have a problem in a restaurant will tell management about it. It will be our
goal to provide a wonderful home-style meal combined with superior customer service.
Training programs will include teaching materials to train our employees about service
attitudes, customer perception and how to handle guest complaints. Paul and Rachael will
conduct periodic staff meetings intended to review policy, increase guest satisfaction and to
keep a general line of communication between staff and management. All guest
complaints will be acknowledged by the staff and referred to management. Programs will
15
 be in place for all types of guest complaints. More serious complaints will be documented
and kept on file. Customer feedback will be accomplished by customer surveys or the use
of mystery shoppers.

4.6.1 Sales Forecast

We are expecting a conservative 5% increase in sales revenues annually over the
next 5 years. The growth is adjusted for inflation. With the addition of catering
revenues, sales will increase by 12.93% in Year 3 and 6.02% in Year 5.

The following table shows expected Sales Forecast for the next 5 years:

Table 4.6.1 Annual Sales Forecast

Annual Sales Forecast Year 1 Year 2 Year 3 Year 4 Year 5
Sales

Food and Beverage Rev. 1,133,8 1,210,4 1,328,9

1,028,422 1,079,843 35 60 20
Additional Revenues 0 81,600 102,00 120,0 135,0
0 00 00
Total Sales 1,028,422 1,161,443 1,235,8 1,330 1,463,9
35 460 20
Controllable Costs

COGS 402,113 414,176 426,602 438,600 444,9

75
Payroll 269,987 323,057 340,02 351,4 396,2
7 56 00
Total Prime Cost 672,100 737,234 766,62 790,0 841,1
8 56 75
Controllable Profit 356,322 424,209 469,20 540,4 622,7
7 04 45
N/B: All amounts are in Kenyan shilling.

4.6.2 Sales Programs

We will encourage our employees to grow our customer base and provide incentives
and regular bonuses to employees for referrals and repeat customers. These
initiatives are still in the planning stages as we gear up to hire and staff. They will
play an active role in our employee culture.

It is also anticipated that as we grow our catering business, along with our lunch
business group, we will hire a sales director to facilitate this portion of the business.
The sales director will be compensated similarly to their national peers (national
Restaurant Association)

4.7 Legal
Initially we will be formed a sole proprietor: Paul Kamau d/b/a Kamakis Restaurant. Over
time, the couple plans to form a Limited Liability Company.

16
 4.8 Milestones
Our initial milestones are as follows:

Table 4.8 Milestones

Milestone Date
Sign Lease with Garden City Shopping Centre 02/01/2018
Complete Interior Decor 03/01/2018
Complete Kitchen / Wait Station Needs 03/01/2018
Hire Back Staff 03/01/2018
Hire Front Staff 03/01/2018
Secure a Point of Sale System 04/01/2018
Secure Lending for Initial Start-Up, Working Capital and Cash Flow 04/01/2018

4.9 Exit Strategy

Disposal of kitchen equipment, and restaurant furniture, and fixtures would occur at
auction. The additional assets such as the staff’s uniforms, table cloths, and cutlery could
be sold at auction or on e-bay. Food inventory because of its quick perishable time would
be considered a write-off.

5.0 Organization and Management

5.1 Organizational Structure
Kamakis Restaurant expects to hire 19 employees. Together, Paul and Rachael Kamau will
personally select each candidate. They’ve adopted an effective interview process designed
to staff the restaurant with highly qualified people for each position. Each applicant will be
rated and evaluated according to a pre-defined set of standards designed for each position.

17
 Background checks will be utilized for designated positions. Recruiting efforts will always
centre on referrals.

5.2 Management Team

The restaurant will be owned by Paul Kamau. Paul began his restaurant career at the age of
15 working in a quick-service food service operation and earned his way through college as
a server and bartender. After earning his degree, he worked for a regional restaurant chain
and an independent fine dining restaurant. In these organizations he held the positions of
Assistant Manager and then General Manager.

Rachael Kamau received her Culinary Degree from the Art University of Nairobi. After
graduation she was employed by a local chain restaurant and then at a Five Star Hotel
within the city. Rachael will initially be employed as the Kitchen Manager.

5.3 Management Team Gaps

Initially Paul and Kamau will fill in many of the management gaps. Over time, they have
plans to hire a sales director, a general manager, and a kitchen manager.

To meet the gaps associated in payroll, inventory management, and cost accounting, the
Kamaus will purchase have considered a POS (point of sale system) that it simplifies
communications between the kitchen and the wait staff. Orders go through the computer,
directly to the kitchen printer. Another benefit of a restaurant POS programs is that it can
track everything from food usage, to the most popular menu items. Because the POS
system acts as a time clock, it can also help prepare payroll – which will save some money
in the bookkeeping department. Along with the daily operations of running a restaurant, a
POS system can organize profit and loss statement and sales tax.

5.4 Personnel Plan

Table 5.4 Personnel Plan

Annual Sales Forecast Year 1 Year 2 Year 3 Year 4 Year 5
Owner / General Manager 0 0 0 0 0
Asst. Manager / Cashier 25,872 26,648 27,44 28,480 29,500

18
 8
Line Cooks 38,304 39,453 40,63 42,500 43,710
7
Prep Cooks 60,480 62,294 64,16 66,00 68,100
3 0
Servers / Cashiers 46,848 48,253 49,70 51,25 52,438
1 0
Dishwashers 24,024 24,745 25,48 26,49 27,760
7 5
Bookkeeper (p/t) 8,640 8,899 9,16 12,806
6 10,350
Sales Agent 0 20,000 20,60 23,45 24,980
0 0
Catering Employees 0 18,432 23,73 26,96 28,986
1 0
Total 204,168 248,724 260,933 275,485 288,280
N/B: All amounts are in Kenyan shilling.

19
6.0 Financial Plan
The following sections outline our financial plan:

• Required Cost of Start-Up

• Profit and Loss
• Cash Flow
• Balance Sheet
• Financial Ratios
• Hourly Labour Costs
• Weekly Sales Projections
6.1 Important Assumptions
• Meal Price range from Ksh.800 – Ksh.1,500
• Average lunch price: Ksh.879
• Average dinner price: Ksh.1374
• The restaurant is located in the West Roads Shopping Centre and is comprised of 3,400
square feet
• The dining room will be comprised of 20 tables with a seating capacity of 86 seats and 40
available parking spaces to meet the needs of the customers.
• The restaurant will employ 19 employees
• Ksh.860, 000 -1,200,000 revenue target; Industry average for casual restaurant average of
Ksh.860, 000.
• Annual 3% increase for inflation and 5% annual increase in revenues
• Year 2 Assumes Catering Business in Place. Assumes 4 parties monthly @ Ksh.15 per
plate and Ksh.5, 000 persons. Catering will escalate to 8 parties monthly in month 20 and
then 10 parties monthly thereafter. Also assumes additional increase in staffing (4 persons
to be hired at 6 hours @ Ksh.800 per hour.

6.2 Start-Up Costs

Total start-up costs will be Ksh.20, 000,000, 9,800,000 of which will be contributed by the
owners and the remainder will be secured through a proposed bank loan.

Table 6.2 Start-Up Costs

Start-Up Expenses Amount
Graphic Logo and Name Creation 100,000
Permits + Lease Deposit 120,000
Contingency 1,000,0
00
Outdoor Sign 300,000
Building Improvements
500,000
Working Capital 1,072,5
00

20
 Pre-Opening Expenses
140,800
Total Start-Up Expenses 3,233,3
00

Start-Up Assets
Artwork 80,000
Walk In Cooler 800,000
Commercial Dishwasher with Sink in Table 700,000
Reach in Stainless Steel Freezers (2) 600,000
Stainless Steel Cold Station 30,000
20 quart food processor/blender 90,000
Ice Maker with Storage Bin 40,000
Stainless Steel Hood with Exhaust
400,000
3 Door Reach In Beverage Cooler w/Glass Door 300,500
Sandwich Prep Reach Ins (2) 35,600
Kitchen Small wares 200,500
Six Burner Restaurant Range (2) 90,60
0
Chrome Shelving Systems (6) 78,50
0
Reach In Coolers (4) 65,75
0
Stainless Steel Work Tables (3) 100,2
00
Hutch for Stainless Steel Table (2) 845,6
00
Liquid Fire Protection System 400,0
00
Stainless Steel 3 bowl sink 62,60
0
Liquid Fire Protection System 98,00
0
Stainless Steel 3 bowl sink 100,5
00
20 wood round / oval tables 350,00
0
86 bleached wood Café Chairs 78,00
0
20 track lighting 100,00
0
Table cloths , napkins 110,2
00
Art, Décor 75,00
0
Fireproof Safe 50,00

21
 0
Cash register + POS System 400,000
Ofc PC 100,20
0
Total Start-Up Assets 6,381,7
50

Total Required Start-Up Costs 20,000,0

00
N/B: All amounts are in Kenyan shilling.

6.3 Source and Use of Funds

Total start-up costs are estimated to be Ksh.20, 000,000. The majority of the costs are
associated with the restaurant equipment, inventory and furniture and furnishings for the
dining room. Total costs for these items are reported to be Ksh.6, 381,750. The costs are
associated with build out and renovation of the restaurant to provide updated plumbing and
creating additional space in the dining area by removing a non-supporting wall: Ksh.500,
000. Additional start-up expenses are in the form of working capital and contingency
Ksh.182, 500.

Paul and Rachael will contribute Ksh.9, 800,000 and are requesting an additional Ksh.10,
200,000 in the form of a bank loan. The loan is expected to be a fully amortizing 5 year
term note secured by UCC filings on all furniture fixtures and equipment.

Table 6.3 Source and Use of Funds

Source and Use of Funds

Sources of Funds

Owners' and other investments 9,800,000

Bank loans 10,200,00
0
Other loans
-
Total Source of Funds 20,000,00
0

Use of Funds

Buildings/real estate -
Leasehold improvements 500,000
Capital equipment 2,110,500
22
 Location/administration expenses 3,840,800
Opening inventory -
Advertising/promotional expenses 2,100,000
Other expenses 9,376,200
Contingency fund
1,000,000
Working capital
1,072,50
0
Total Use of Funds 20,000,00
0
N/B: All amounts are in Kenyan Shilling.

6.4 Break-Even Analysis

Total fixed costs associated with the restaurant are Ksh.669, 186 and represent the annual
expenses. The variable cost (overhead) is estimated to be Ksh.451 per meal. Based on the
assumption of Ksh.1137 as the average meal price, the breakeven revenue then is Ksh.1,
108,970 or 97,535 meals (units). This is further depicted in the Table Below and the Graph
that follow:

Table 6.4 Break-Even Analysis

Net Net Fixed Total Total
Units Revenue Cost Variable Cost Cost Profit
Fixed Cost: 669,186.01
Variable Cost: 451
Number of Units: 13,934
Avg. Unit Price: 1137

0 0 669,186 0 669,186 -669,186

13,934 158,424 669,186 62,826 732,012 -573,588
27,867 316,849 669,186 125,653 794,839 -477,990
41,801 475,273 669,186 188,479 857,665 -382,392
55,734 633,697 669,186 251,306 920,492 -286,794
69,668 792,122 669,186 314,132 983,318 -191,196
83,601 950,546 669,186 376,958 1,046,144 -95,598
97,535 1,108,970 669,186 439,785 1,108,971 0
111,468 1,267,395 669,186 502,611 1,171,797 95,598
125,402 1,425,819 669,186 565,438 1,234,624 191,196
139,335 1,584,243 669,186 628,264 1,297,450 286,793
153,269 1,742,668 669,186 691,090 1,360,276 382,391
167,202 1,901,092 669,186 753,917 1,423,103 477,989
181,136 2,059,517 669,186 816,743 1,485,929 573,587
195,070 2,217,941 669,186 879,570 1,548,756 669,185
209,003 2,376,365 669,186 942,396 1,611,582 764,783
222,937 2,534,790 669,186 1,005,222 1,674,408 860,381
23
 N/B: All amounts are in Kenyan shilling.

6.5 Projections

6.5.1 Projected Profit and Loss

The profit and loss demonstrates modest increases in revenues over the five expected
years with adjustments for inflation.

Table 6.5.1 Pro Forma Profit and Loss

Pro Forma Profit and Loss Year Year 2 Year 3 Year Year 5
1 4
Income

Sales 1,028,422 1,161,443 1,235,835 1,489,500

1,358,600
Cost of Goods Sold (402,113) (414,176) (426,602) (560,438)
(520,538)
Gross Profit 626,309 747,267 809,234 929,062
838,062
Expenses

Accounting / Legal 12,000 12,360 12,731 12,950 13,100

Bad Debts 25,711 26,482 27,276 28,320 30,450
Shrinkage 90,000 92,700 95,481 97,300 99,250
Credit Card Fees 20,568 21,185 21,821 23,123 24,591
Insurance 75,000 77,250 79,568 83,098 84,509
Miscellaneous 44,112 45,435 46,798 48,600 49,789
Payroll Taxes 0 0 0 0 0
Permits and Licenses 7,356 7,577 7,804 8,000 8,100
Rent 68,000 70,040 72,141 74,300 75,450
Salaries 12,341 12,711 13,093 13,700 14,320
Wages 269,987 323,057 340,027 358,567 360,300
Total Expenses 625,075 688,798 716,739 747958 759,859
Net Profit 1,234 58,469 92,494 90,104 169,203

24
N/B: All amounts are in Kenyan shilling.

6.5.2 Projected Cash Flow

The statement of cash flow shows the incoming and outgoing cash of the business.

Table 6.5.2 Pro Forma Cash Flow

Pro Forma Cash Flow Year 1 Year Year 3 Year Year 5
2 4
Cash Received
Cash from Operations 148,101 30,995 11,402 29,55 63,201
6
Cash Sales 1,028,422 1,161,4 1,235,83 1,330,6 1,450,6
43 5 00 00
Cash from Receivables 0 0
0 0 0
Subtotal Cash from 1,176,523 1,192,4 1,247,23 1,300,4 1,450,8
Operations 38 7 59 99
Additional Cash Received 189,000
Sales Tax
Owners Investment 1,800,000
Subtotal Cash Received 1,365,5 1,192,438 1,247,237 1,300,459
23 1,400,098

Expenditures

Expenditures from 765,11 414,176 426,602 438,308

Operations 3 440,320

25
Cash Spent 710,176 731,481 753,426 760,200 762,650
Bills Paid
Subtotal Spent on 1,475,289 1,145,658 1,180,028 1,198,508
Operations 1,202,970
Additional Cash Spent
Sales Tax
Loan Payment 33,240 35,378 37,654 38,750
39,900
Subtotal Additional Cash 33,240 35,378 37,654 38,750
Spent 39,900
Subtotal Expenditures 1,508,529 1,181,036 1,217,681 1,237,258
1,242,870
Net Cash Flow 1,656,994 11,402 29,556 63,201 190,128
Cash Balance 30,994 42,397 40,958 92,757 253,329

N/B: All amounts are in Kenyan shilling.

6.5.3 Projected Balance Sheet

Table 6.5.3 Pro Forma Balance Sheet

Pro Forma Balance Sheet Year 1 Year Year Year Year 5
2 3 4
Assets
Current Assets
Cash 63,000 66,150 71,11
1 73,50 74,765
0
Accounts Receivable 25,000 26,250 28,21
9 29,35 32,654
0
Inventory 14,000 14,700 15,80
3 16,45 17,890
5
Other Current Assets 129,500 135,975 146,17 148,2 150,3
3 00 16
Total Current Assets 231,500 243,075 261,30 267,5 275,6

26
 6 05 25
Long Term Assets
Long Term Assets 144,500 151,725 163,10 172,4 175,4
4 36 50
Accumulated Depreciation 0 0 0 0 0
Total Long Term Assets 268,500 281,925 303,06 309,7 312,3
9 50 45
Total Assets 500,000 525,000 564,37 577,2 587,9
5 55 70
Liabilities and Capital
Current Liabilities
Accounts Payable 29,000 30,450 32,73 33,89
4 0 35,890
Current Borrowing 15,000 19,000 35,90 37,9 40,345
0 00
Other Current Liabilities 28,500 29,925 32,16 34,78
9 0 36,560
Subtotal Current Liabilities 72,500 79,375 106,5 112,79
100,8 70 5
03
Long Term Liabilities 189,000 198,450 213,33 215,56 220,4
4 6 20
Total Liabilities 261,500 277,825 314,13 322,13 333,2
7 6 15
Paid In / Invested Capital 223,000 234,150 251,71 258,31 321,5
1 0 64
Retained Earnings
Earnings
Total Capital 223,000 234,150 251,71 258,31 321,5
1 0 64
Total Liabilities and Capital 484,500 511,975 565,84 580,44 654,7
8 6 79
Net Worth 223,000 234,150 251,71 258,31 321,56
1 0 4

N/B: All amounts are in Kenyan shilling.

27
 6.6 Business Ratios

Table 6.6 Ratio Analysis

Industry
Ratio Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Profile
Financial Ratios
Quick Ratio 1.49 1.49 1.49 1.49 1.49 1.06
Current Ratio 3.92 3.92 3.92 3.92 3.92 1.46
Current Liabilities to Net 0.26 0.26 0.26 0.26 0.26 0.40
Worth
Current Liabilities to 4.21 4.21 4.21 4.21 4.21 5.85
Inventory
Total Liabilities to Net Worth 1.24 1.24 1.24 1.24 1.24 1.24
Fixed Assets to Net Worth 1.20 1.20 1.20 1.20 1.20 1.11
Collection Period
Inventory Turnover 28.7 28.2 27.0 26.8 26.6 29.44
Assets to Sales 48.6% 45.2% 45.7% 49.1%
45.9% 45.6%
Working Capital to Sales 16.8% 15.6% 15.8% 16% 14.0%
15.7%
Accounts Payable to Sales 2.8% 2.6% 2.6% 2.6% 2.8%
2.7%
Return on Sales 0.1% 5.0% 7.5% 7.8% 1.0%
8.0%
Return on Assets 0.2% 11.1% 16.4% 2.1%
17.5% 18.6%
Return on Equity 0.6% 25.0% 36.7% 4.7%
38.6% 40.6%
Interest Coverage 0.8 7.6 15.5 18.8 20.2 1.66
Income Statement
Gross Sales 100.0% 100.0% 100.0% 100.0 100.0
% % 100.0%
Gross Profit 60.9% 64.3% 65.5% 56.0%
66.6% 68.5%
Operating Income 0.1% 5.0% 7.5% 7.9% 8.5%
Net Profit After Tax

Balance Sheet

Cash 12.6% 12.6% 12.6% 12.6% 12.6%

12.6%
Accounts Receivable 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Inventory 2.8% 2.8% 2.8% 2.8% 2.8% 3.0%
Total Current Assets 46.3% 46.3% 46.3% 46.3% 46.3% 49.5%
Total Fixed Assets 28.9% 28.9% 28.9% 28.9% 28.9% 25.7%
Other Non-Current Assets 24.8% 24.8% 24.8% 24.8% 24.8% 24.8%
Total Assets 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
28
 Accounts Payable 5.8% 5.8% 5.8% 5.8% 5.8% 5.8%
Total Current Liabilities 0.0% 0.0% 0.0% 0.0% 0.0% 17.6%
Total Long Term Liabilities 37.8% 37.8% 37.8% 37.8% 37.8% 37.8%
Net Worth 44.6% 44.6% 44.6% 44.6% 44.6% 44.6%

6.7 Hourly Labour Schedule

29
6.8 Weekly Sales Projections

30