Nutrition 404 Business Plan

San Diego University

Fall 2021

Ashley Georges
Chutong wang
Dan Zhang
Nelly Bahena
Sean Singh
Trevor Bailey
Tsz Yuet Natalie Cheung
Company Description

Team and Organization

As a sole proprietorship, which is the most basic and simple business model. Ricchi’s
Italian Cuisine is led by the owner and is solely responsible for all responsibilities of the
company including assets and liabilities. The staff upon opening will include the kitchen led
by the executive chef along with a sous chef, line cooks, prep cooks, and dishwasher. The
front of the house staff comprises the floor manager, servers, hosts, and bussers. The bar area
will include the bar manager and bartenders. Each role will coordinate with each other to
provide excellent food and quick service. People cooperate and help each other to ensure
efficient and high-quality operation of the company.

Owner:

The owner will also take on general manager duties and be the main manager in
finances, inventory, supervising employees, and promoting their brand. Due to the restaurant
being a sole proprietorship, they will also be targets of any potential lawsuits that may come
their way. They had previous management experience at other foodservice operations so a lot
of upcoming challenges will be familiar. Ricchi’s Italian Cuisine is a smaller business to
begin with, so the owner will be in the store to attend to a lot of the day-to-day operations.
They have learned good technical and human skills from previous experiences, but now they
will need to rely a lot more on their conceptual skills as they are going to be the face of their
business. Understanding markets, surrounding competition, promoting the brand, and
negotiating with suppliers will all be crucial skills that will be needed.

Manger:

This job requires a background in public relations and business management which
ensures the smooth operation of the company. First, he needs to have short - and long-term
goals. Provide sustainable and progressive ideas and solutions to the company. And manage
the progress and cooperation of various departments. Next, he also needs the company's
health, food quality for regular inspection. In addition, we also need to deal with the publicity
and communication between the company and the outside. Obtain the latest information to
run the company efficiently.

Bookkeeper:

The bookkeeper's duties include some data entry and receipt disputes. They are
responsible for using double-entry bookkeeping. Need careful analysis and sufficient legal
knowledge which has better budget decisions. It is also necessary to have a thorough
understanding of the company to analyze key indicators of the normal operation and current
financial status of the company: revenue, cost, profitability, etc. This requires at least three to
five years of work experience.

Chef:

Chefs need to cook according to standard recipes according to the needs of customers.
The first step is to clean and sort the required ingredients. And according to different chefs,
they are good at the division of labor. At the same time, we should also have a tacit
understanding of cooperation. The hired chef must have Food Handler Certification. In
addition, there is an annual competition between chefs which includes developing new dishes
and improving techniques. Chefs with good working experience will be preferred. Their
responsibility is not only to produce good food but also to ensure the quality of health.

Dishwasher:

This is mainly responsible for the cleaning of cutlery and kitchenware which ensures
that they do not affect the quality of food. We give priority to those who are physically
strong, fast, and efficient.

Waiter:

The duties of the waiter include greeting customers, providing detailed menu
information, taking order information, and passing it to the kitchen. Besides, I also need to
deal with the front desk work and collect the accounts. Trained servers are required to have
basic table manners and resourcefulness to ensure a pleasant meal.

Bartender:

Mainly responsible for the bar. Prepare alcoholic and non-alcoholic beverages for
customers according to the menu provided. And keep the bar clean and tidy. At the same
time, basic table manners and resourcefulness are required to ensure a pleasant meal.

Our corporate culture at Richi’s Italian cuisine is focused on giving, not just to guests
but to employees who deserve it the most. We know the restaurant industry is a very volatile
business and our employees should be rewarded for their hard work. We do tip out for
absolutely everyone, including 4% for the back of the house as most places don’t do this.
Servers and bartenders are given bonuses based on milestones of sales for products like wine
bottles and chef specials. We believe in transparency between our upper-level management
and employees. Employees should be able to come to management with any sort of concern
because we have no idea what each other is going through. We want to embody the family
aspect of a true Italian restaurant and there is a training program we put all managers through
for 2 weeks to sharpen their empathy and compassion. We have a saying called, “ Chi Non
Fa, Non Falla'' which translates to he who makes no mistake, makes nothing. We are all about
improving ourselves, both inside and outside the company. The restaurant industry can be
very cutthroat, but we give our employees the proper support they need to get better at what
they do.

Organization Structure:

Our organization structure is very much in the modern innovative way. We have the
host station with the seating chart and the seating software that allows them to calculate what
time they will need certain tables for reservation. The software we use is the app Open Table.
The server station is organized in a way where there is the POS terminal by Toast with two
rechargeable handhelds that can be taken to outdoor seating. Inside the cubbies are lemons,
limes, sugar packets, straws, napkins, roll-ups, and silverware ready to go at a moment's
notice. The seating chart is labeled with what server is taking what section and also toast
updates the manager if the FOH has any issues with a certain table. We do have a wine cellar
at the front door area so customers can personally shop for their wine before or after they eat.
Our patio is set up in the back of the restaurant where there is another server station. The
kitchen has exit doors that enter both the main dining room and also the back patio. The
kitchen has a fryer section, a grill section, a saute section, and a garnish/plate window. It's set
up in a way where everyone has their own station and there's no need to be crossing over
each other. The bar is set up so two bartenders and a barback can be performing at maximum
speed. Each section of the bar has garnishes up top, well spirit to the left, and juices/syrups to
the right. All liquors used on the menu can be found on the wall behind each bartender.
Managers have eyes on the whole restaurant in the office with the cameras and often check in
with staff to make sure things are running smoothly.
The restaurant will be a sole proprietorship. As a small upcoming business, it would
be the easiest method of breaking into the food industry. We didn’t want to rely on multiple
owners and shareholders such as an LLC at first and be put in a difficult situation if one of
them leaves the company. Starting out as a sole proprietorship can allow the business to build
up into something more reputable and become something future partners and investors can
trust. However, at this point, we wanted to focus on simply getting the restaurant up and
running and spreading our brand without having to worry about the company politics of
having multiple owners and decision-makers. San Diego has a very large and diverse food
scene as it’s one of the biggest cities in the nation with a large immigrant population from all
over the world. Competition is going to be tough and we wanted the least amount of obstacles
possible in building the restaurant brand. We also recognize liability protection can be an
issue in a sole proprietorship. The risk of getting a lawsuit can be lessened if we place heavy
emphasis on food safety to decrease the likelihood of foodborne illnesses arising.
Maintaining constant cleanliness in the restaurant and making sure there are no areas where
people could slip and get injured will also reduce the risk of getting sued. In the event the
restaurant does get sued, having a business attorney can help mitigate the consequences.
Organizational chart:

Products and Services

Ricchi’s Italian Cuisine will provide you with only the finest authentic European
cuisine. We only supply the freshest ingredients that we receive from local vendors to
guarantee high-quality meals. Our menu was crafted by our expert chefs with over 20 years
of experience with Italian cuisine. We provide healthy alternative appetizers and entrees. Our
pasta has the option of switching out our regular noodles with zucchini, spaghetti squash, and
cabbage noodles. Only using the freshest and 100% organic vegetables for each course meal.
Our customers are treated like family, in order to maintain an atmosphere filled with comfort
to enjoy meals to the fullest. Richie’s will provide a modern European feel while still giving
California vibes. Our restaurant, lounge, and furniture will create that feeling of Europe while
dining in. Whether it’s a dine-in meal or take-out we try our best to provide excellent
customer service.

Menu Price Cost Source Profit

Carpaccio di Scallops $15.95 Costco, Walmart, $6.19

3 Atlantic Scallops, Atlantic Scallops:$2.44/ Scallops Sysco, Webstaurant 9.76
with 3oz arugula and
1oz extra virgin olive Arugula :59.6 ¢/oz
oil and 1oz lemon
vinaigrette extra virgin olive oil:

25.4 ¢/fl oz

lemon vinaigrette:

0.4¢/fl oz

Total Cost: $9.76

Tagliata di Polpo $16.95 Costco, Walmart, $7.51

3oz Thin slices of very Octopus: $1.89/oz Sysco, Webstaurant 9.44
tender octopus over，
5oz arugula salad, and Arugula :59.6 ¢/oz
2oz cherry tomatoes,
1oz extra virgin olive extra virgin olive oil:
oil and 1oz lemon
25.4 ¢/fl oz
vinaigrette
lemon vinaigrette:

0.4¢/fl oz

cherry tomatoes: 15.5 ¢/oz

Total Cost: $9.44

Pollo alla Parma $23.47 Costco, Walmart, $8.64

1lb Parmigiana style Chicken breast: $9.09/Ib Sysco, Webstaurant 14.83
chicken breast with 3oz
melted mozzarella Mozzarella cheese: 21.8 ¢/oz
cheese, 0.5oz bail, 2oz
garlic tomato sauce Garlic tomato sauce：$0.0075/oz
served with 5oz Pasta +$1.24/oz=$1.36/oz

Pasta: 4.9 ¢/oz

Basil: $2.64/oz

Total Cost: $14.83

Vegan and $21.95 Cherry tomatoes: 15.5 ¢/oz Costco, Walmart, $9.91
Gluten-Free Ravioli Garlic: $0.0075/oz Sysco, Webstaurant 12.04
6oz Fresh chopped Basil: $2.64/oz
cherry tomatoes, 2oz Flour: 54.0 ¢/lb
garlic, 4oz Basil,1lb Total Cost: $12.04
Flour

California Pizza $16.43 Mozzarella cheese: 21.8 ¢/oz Costco, Walmart, $6.96
6oz Mozzarella, 8oz Arugula :59.6 ¢/oz Sysco, Webstaurant
Arugula, 8oz Avocado, Avocado: $0.23/oz
4oz Lemon & Pepper Lemon & Pepper Seasoning:
Seasoning, 6ml $0.019/oz
Balsamic Reduction, Balsamic Reduction: $0.067/ml
2lb Flour Flour: 54.0 ¢/lb
Total Cost: $9.47

Operating Plan:

Ricchi’s Italian Cuisine will be located inside the Balboa Mesa shopping center in
Clairmont, San Diego. The address is 5401-5605 Balboa Avenue, San Diego, CA 92111.
While there are restaurants and food dining options located at this shopping center (Panera,
Panda Express, Ototo Sushi, Burger Grill) there are no authentic Italian cuisine family
restaurants surrounding this area. This restaurant will be in between Balboa Avenue and
Shopping Center Driveway which is a perfect view for welcoming customers. This location is
perfect for customers to sit down for a family meal as it also resides just six minutes away
from San Diego Mesa College, and eleven minutes away from Pacific Beach. The size of the
business will be approximately 1,000 square feet. This space will provide enough capacity to
house fifty customers as well as accommodate fifteen sets for the bar lounge area. There is
also an abundance of parking space at this location as it is located inside the shopping center.
Location disclosed below courtesy of Regency Centers:
Lease and utility costs:

The estimated lease would be around $27000 for one year and $2250 for one month.
For utility costs, it would be around $3750 for one year and $312.5 for one month.

Major equipment, purchasing source, energy requirements and cost:

Equipment Purchasing source Energy requirements Cost

True T-49DT-HC GoFoodservice 115 Volts $8,540.01

54" 2 Door Dual Energy:
Temperature $0.31/d
Reach-In $8.06/m
Refrigerator / $96.72/y
Freezer, T-Series

Quantum Food GoFoodservice / $128.49 /ea

Service
WR74-1436BK
36" x 14" x 74"
Black Epoxy Starter
Wire Shelving Unit,
4 Shelves

Blodgett BCT-61E, GoFoodservice 208/240 Volts $11,666.00

9,000 Watt Electric Energy:
Combination Oven $0.55/d
Steamer w/ Stand, 5 $14.3/m
Pan, Touch Screen $171.6/y
Controls

CMA Dishmachines GoFoodservice 115 Volts $4,240.00

E-C Energy:
40 Rack/Hr Door $0.31/d
Type Dishwasher, $8.06/m
Low Temperature $96.72/y
Chemical Sanitizing,
Single Rack

Blendtec GoFoodservice 120 Volts $949.00

Connoisseur 825 Energy:
C825C11Q-B1GB1 $0.32/d
D, 90 oz $8.32/m
Commercial Food $99.84/y
Blender, 3.8 HP,
Variable Speed

True GoFoodservice 115 Volts $7,742.24

TCGG-48-S-LD, Energy:
48" Refrigerated $0.31/d
Deli Display Case, $8.06/m
Curved Glass $96.72/y

True TPP-AT-67-HC GoFoodservice 115 Volts $6,216.32

67" 2 Door Pizza Energy:
Prep Table, (9) 1/3 $0.31/d
Size Pans $8.06/m
$96.72/y

Edlund EPZ-10 GoFoodservice / $414.63

(57100), 10 lb
Digital Pizza Scale
Chart of staff and shifts:

Restaurant Employee Schedule

S/N: Business hours will be from 11a.m to 9p.m Tuesday-Sunday. On Mondays we will be
closed since we are a small restaurant business we want to reduce our overall expenses when
starting off. We will also be closed from 3-4p.m to transition to dinner service.
The Market

Market size & trends:

When discussing the industry and market of this food establishment, we must first
consider the size, trends, and competition surrounding this business. In doing so we can then
pinpoint what clientele this restaurant will cater to for the most part. Since we will be opening
a sole proprietorship Italian restaurant, we must also take into account how independently
owned eateries can be more successful than franchised restaurants. By conducting such
research, we can then familiarize ourselves with the restaurant industry and the local market
directly.
The restaurant industry is an immensely profitable business. In 2020 the restaurant
industry sales were $659 billion in the U.S and it’s expected to increase more in upcoming
1
years. When looking at restaurant sales and customer traffic the restaurant business has a
performance of 102.9 since September of 2021 according to the National Restaurant
1
Association. All these factors show a high profit market value for restaurants and how
people continue to provide business to these restaurants by dining outside. We can then see
any future trends of restaurants that serve Italian cuisine in the U.S.
Since this business will be an authentic Italian restaurant establishment, we want to
see any culinary trends that can help develop a menu that will be popular with the locals as
well as providing fresh ingredients. It is also quite important to have a menu that is
affordable. When a customer decides to eat out, they will look mostly for restaurants that are
affordable and have a brand reputation. In a study by Chua (2020), she highlighted the
importance and key factors that contributed for some folk to choose a restaurant. The number
2
one factor for people deciding to choose a restaurant was affordability (Figure 1). To make
sure our business makes profit we must price our menu according to maximize profit but also
provide a service that will differentiate us from other restaurants in our area.
Since we will be the only Italian restaurant around the area, we will hold a
competitive edge towards other food establishments nearby. There are some food
establishments that sell some renditions of pasta dishes such as Panera Bread's small pasta
bowl, but these ready-to-go meals can taste stale at times. To serve food made by an expert
chef would bring customers wanting more as the style and taste of the food would be more
appetizing as it is authentic. In a study by Camillo (2009) he summarizes the importance of
Italian cuisine in the U.S by stating three major factors: “(1) the marriage of taste and
simplicity, and a balance of nutrients used in the ingredients; (2) the high quality of products
3
such as pasta, olive oil, prosciutto, wine; (3) the image of authentic Italian restaurants”.
Combining all the aforementioned factors would provide a blueprint to understanding our
competitors and deliver a service that competitors won't be able to match.
Our restaurant’s products, pricing, promotions, and place were aimed to satisfy our
targeted market. Those big 4 categories are the key to an organized market. The components
of the products your business needs are a huge factor. After selecting a target market you will
then ask yourself a series of questions to determine what is right for your company.
Think of what the customer will want and achieve with your product. The fracture
dose, how and where the customer will need your product, how should the product look like,
it’s product name, how it will be branded, and what makes it better than your competition's
product are great starting off questions when thinking about what you’re selling. Our
restaurant's “products” are based on our theme, which is Italian cuisine. Our appetizers,
entrees, and desserts are Italian foods which is the desired food the customers come in for.
Consumers are drawn by the Italian name which makes it known that our restaurant serves
 Italian dishes. Putting a price tag on your products is also extremely important. First you must
know the value of the product and how it will service the consumers. It is essential to look at
the price points in your area and your nearby competitors. Price point isn’t just about how
much the products were for the businesses to buy and adding profit, but location, competitors,
and how valuable your product is are more things that come with deciding price points
according to How to price Your Product: 5 Common Strategies.Our restaurant is located in
downtown San Diego, our price point for restaurants were quite high because of the value of
the food and expenses of the area.
Place and promotion are the last essential marketing elements needed to create your
target market. When planning places keep in mind these following questions; where will
consumers find your product/service?, is a sales force needed?, and what your competitors do
and how you differentiate from that. Our restaurant is neighbored by a sushi restaurant next
door, as well as some American food restaurants making us the only Italian restaurant in the
block. Having the benefit of being the only Italian restaurant on the block will have more
locals from the area come to your restaurant when wanting Italian cuisine. Last, but not least,
promotion for target marking is key when trying to reach your audience’s attention. Will your
advertisement be on billboards, radio stations, the press, or through mail? Notice what kind of
advertisement your competitors promote in order to get the same attention and more. Our
restaurant gets advertised through social media due to our audience being more active on the
web rather than reading a newspaper ad. When competing with your competitors it’s
important to have percentages of which one is the most successful. This Target Diagram will
help on the website Concept Draw will help you envision how you can improve and learn
from your most popular and successful competitors.

Competitive Analysis:

Business Competitive Location Main Typical Product Areas on How

Name Advantages/ products Entree Information how they they
Niche pricing can Excel
($) improve

IHOP Breakfast 6135 Pancakes $5.79 - Focuses on More Dine in

diner at Balboa Eggs $12.79 breakfast variety on Take out
affordable Ave Bacon (pancakes, their menu Delivery
price Hash waffles, during from
Browns French lunch and other
toast, and dinner platform
omelettes)
offers
sandwiches,
burgers, and
salads for
lunch and
dinner.

Luna Grill Fast casual, 4175 Gyro $9.42 - Fresh Adjust their Dine in
health Genesee Chicken $15.95 Mediterrane menu and Take out
focused Ave Rice an cuisine flavors Delivery
Suite Salads (kabobs, accordingly from
 100 gourmet for culture other
salads, specificity platform
hummus, Add more
house-made variety to
falafel, pita their menu
wraps,
desserts,
craft beer,
and wine)

Panera Fast casual, 5620 Sandwich $4.99 - A wide Quality Dine in

Bread health Balboa es $12.99 variety of control for Take out
focused cafe Ave Bread pastries and staff and Delivery
Salads baked products from
Soups goods for other
(bagels, branches platform
brownies, all around
cookies, the world
croissants,
muffins,
and scones)
along with a
wide list of
main dishes
and drinks
for both
adults and
kids
(flatbreads,
panini,
Panera
Kids,
pastas,
salads,
sandwiches,
side
choices,
soups,
coffee,
espresso
drinks,
frozen
drinks, fruit
smoothies,
hot
chocolate,
iced drinks,
lattes,
lemonade,
 and tea)

Sufi Moderate/et 5915 Kabobs $11 - authentic Adjusting Dine in

Mediterran hnic, not as Balboa Rice $30 Persian their menu Take out
ean Cuisine fast but Ave Persian cuisine and flavors Delivery
higher Dishes (Kabobs, accordingly from
quality fish Plates, for culture other
meals. rice Plates, specificity platform
Offers stews,
buffet sandwiches,
burgers,
salads,
soups,
wraps, side
choices, and
special
desert and
drinks)

SWOT Analysis:

Business Name Nestle Popeyes

Strengths As a highly diversified company Absolute name recognition

which has many different More than 1,800 restaurants in every
divisions and businesses. That state.
makes Nestle extremely resilient
to the economy.

Weaknesses Most of Nestle's products are sold Lack of visibility in the new media
by Walmart, Kroger and other environment and on a global scale
large retailers, which may be often
reduced in price. With profits hard
to come by, retailers prefer
high-margin independent brands.

Opportunities 1. Develop more online Expanding into emerging markets in

distribution channels. Asia and introducing healthier food
2. expand into developing pairings
countries which has a
wider market

Weaknesses 1. Big retailers are turning to The rise of consumer health

their own brands to make awareness
higher profits
2. The rise of online sales
channels such as Amazon
 could hurt traditional retail
products.

Competitive Advantage:

Our restaurant is an authentic Italian restaurant. In order to provide the most

traditional food, we will invite well-known local chefs as main-chefs. Professional chefs can
let customers taste the most delicious and authentic food. At the same time, we will select the
most popular menu every week for promotional activities to thank customers for their
choices. In terms of menu preparation, our restaurant will cooperate with the largest food
retailers in order to obtain the freshest ingredients and the most favorable prices. That will
allow customers to enjoy the best food quality and save unnecessary spending. Not only does
the food satisfy the customers, but our service is also excellent. The waiters in our restaurant
are professionally trained and must have a good service attitude to customers. Before serving
each customer, they will ask customers if they have allergens. A suggestion box will be set up
in the restaurant. When customers receive the poor service attitude of the waiter, they can put
their own opinions into the suggestion box. The restaurant manager will collect opinions once
a week and make changes to the restaurant through customer suggestions.
The advantages of the restaurant are also reflected in the environment. The
environment in our restaurant is also specially designed for customers. The interval between
each table will be 1.5 meters and will be covered by plants to ensure the privacy and safety of
customers. At the same time, the restaurant's decoration will also choose to use traditional
Italian colors and decorations so that customers who come to the restaurant can experience
Italian culture. At the same time, our restaurant will cooperate with takeaway companies to
provide online order services. Customers who cannot come to the restaurant can enjoy the
most authentic Italian food like other customers. Similarly, the menu in the restaurant will try
to meet the needs of different customers, such as providing vegan food for vegetarian
customers and lactose-free food for lactose-intolerant customers.

The biggest obstacle for brand new food service operations is getting their name out
there. The Balboa Mesa shopping center is surrounded by several high schools and colleges.
Clairemont high school, Madison high school, and San Diego Mesa College are all within 2
miles. This means many of the consumers around are likely in their late teens to early
twenties. We can provide student discounts of up to 15% off if they show their ID. Our online
marketing strategy is to pay for advertising space on school homepages & events hosted by
the schools. We also will come to school lunches to offer discounts and advertise to
students/faculty. This can help draw in families who will all likely dine in at the same time.
While we may not be making as much money off the student, the other people they may bring
with them may help offset that. Hosting fundraising partnerships with the school and their
sports teams and clubs throughout the school year can allow us to build a regular customer
base.

Marketing Strategy:

One of the biggest proponents of marketing success for the restaurant industry is
brand awareness and word of mouth (trust). We will work on getting our restaurant’s social
media seen and interacted with by our customers to create a sense of authenticity and trust
from future consumers. Our social media will have a link tree in the bio: one to sign up for
rewards & specials, one to our Yelp page, and one to open a table. The first is to build a
portfolio list for email/digital advertising, the second is for building our credibility on yelp,
and third is for actually booking sign up. The average cost to acquire a customer on average
in the restaurant industry is $44.73. Our goal is to use organic growth and track CAC so that
cost goes down. We calculate an acceptable range LTV to CAC ratio to be 3:1. Restaurants
already have such slim margins so using already successful platforms is key to have higher
gross profit. To get a higher google appearance when people search for Italian restaurants, we
developed our SEO google analytics. The biggest way to get our restaurant high on the
Search Engine Optimization list is to do things with our restaurant website that offer quick
speed, unique content, no dead links, structured data, and keywords to google searchings.

One platform we will be using is Instagram/FB/Tik Tok. This is where we will

showcase various menu items, cooking processes, and restaurant specials/discounts. One of
our main marketing strategies through social media is offering special packages for events &
parties. We hired an in house photo/videographer to film all of the content to be posted. We
interact daily with not just our customers, but people engaging with us through DM’s and
comments . Also we will post, with permission, customers in the restaurant because
statistically people feel more compelled if they see true customers having a great time. Since
we are near the Balboa Mesa shopping center we can make introductions to the business
owners and even do pop up shops to meet people in the community. Going to fundraisers
with nonprofits to make donations and make a strong presence is important too in the local
community.

Yelp is one of the most popular business review sites. 178 million different people
visit the site every month and it is often the go to site which people use if they want to find
restaurants in the area. 45% of people who search for reviews go to yelp before visiting an
establishment. This can be used as a tool to highlight guest satisfaction and actually grow the
business. Businesses using Yelp saw a 9% growth in revenue over the year of 2019 just
simply because of the traffic. If you search for places to eat, the site will give the results in a
numbered order based on how far away it is and what it’s community reviews are like.
However, there is a section right above the number 1 restaurant it gives you. This section is
for the advertised restaurants which will be at the top of the page. Certain parts of San Diego
do have very nice Italian restaurants, but not so much in our area of Clairemont/Convoy
where Japanese, Korean, and Chinese restaurants dominate. Being on top of Yelp search
results while also having a different cuisine than many of the other nearby restaurants can get
more customers to come to us.

Open table is an amazing technology our restaurant wants to incorporate because it

does have a very modern appeal & is a growing app that gives all the information a customer
could need. One of the really cool things they do is actually feature popular dishes and
specific reviews for that product. One of the emerging products that likely take over the
industry is automating hosting by having guests check in themselves. It’ll lower labor costs
and actually allow for more opportunity for marketing or restaurant development. Another
very popular trend in technology is the use of food delivery services like Uber Eats,
GrubHub, and DoorDash. Despite the fact that they take 30% of the revenue, it does make
that warm introduction to possible new consumers.

Goals & Financial Assumptions

Goals, Risks & Strategies:

Our Italian family style restaurant has a wide variety of age groups as its target
audience. One of our short-term goals is to advertise our restaurant in ways that will reach all
of our target audiences' age group. One way to advertise our restaurant is through social
media. By investing in ads to appeal and show our target audiences our happy hours,
ambience, meals, and drinks. This will reach consumers that have never heard/seen our
restaurant before, customers that will be reminded to come in again, and customers that will
be intrigued by our specials going on. Another way consumers can see what we have to offer
is through our app that will be advertised. The app will show our entire food menu including
our drink menu and dessert menu. There will be pictures of each item on our app, as well as a
short description of the item. It will send out notifications to remind our customers of
specials, points on the app, new items, and more. Our app will remind customers what times
we are open during holidays and regular hours. Through our app, our goal is for the customer
to have visuals, reminders, and updates about our restaurant which is proven to have higher
sales. There may be potential barriers through advertising through social media and our app.
They must always be up to date in order to satisfy the consumers. We need a potential
manager to keep the menu updated online, hours, specials, pictures, and news all up to date
on our app. Our older generations that don’t use social media might also not even see our ads
at all. Sending ads through mail with coupons attached may bring in that age group target
audience into our restaurant.
Once our small family owned restaurant gets the attention of all our targeted audience
our next goal would be to open another restaurant in a different location. In order to do that
we would have to educate ourselves on where to put our restaurant at. We would want an area
that would be able to afford our prices. An area that doesn’t have another Italian restaurant
nearby. We would need a space big enough to fit our kitchen mapping while still having space
for indoor seating, bar area, and outdoor seating. Hiring new managers, assistant managers,
servers, and hostesses. We could use the same technology team from our original restaurant
to help manage the advertising for our new restaurant. We would advertise this new opening
in our original restaurant, our app, website, and flyers sent out in the mail. The potential
barriers would be trouble finding a space in an area that could work with our restaurant map
out and government regulation rules of mapping for safety hazards.

The two long-term goals established for this restaurant are to increase sales and to
lower employee turnover. It’s important to increase sales as it will provide profitability to the
restaurant for it to continue to stand on its own. It is also important to lower employee
turnover because it can cost the restaurant money as well as lose valuable employees. These
two long-term goals will help the restaurant become more successful and better prepared for
the future. By examining barriers and strategies to assist these goals it will secure more profit
as well as setting up this restaurant for success.
To increase sales we must look for customer satisfaction. In a study conducted by
Chua et al. (2020) they examined the key importance of restaurant selection by customers
based on word-of-mouth recommendations. If a customer receives great service and the menu
prices are affordable, the customers are more likely to come back and recommend that
1
restaurant as stated in the study. With an increase in customer satisfaction the flow of
customers will increase as well. The more the customers the higher the increase in sales there
will be. One short-term barrier that can prevent an increase in sales can be menu items. For
instance, some menu items will sell much more than others and thus it’s important to
recognize and assess how to increase sales for that item or completely change it. If a change
needs to happen to that menu item, adapting and experimenting with new menu items will
help find an item customers will enjoy and continue to buy.
A long-term barrier for increasing sales would be maintaining an efficient feedback
system that can record and identify profitability margins for the menu items listed. If the
restaurant does not have a proper feedback system in place there can be confusion and can
disrupt analytics with the cost and profits of the restaurant. To counter that problem, having a
system such as POSist Restaurant, Restaurant365, Zenput are just a few analytics programs
2
that are affordable and reliable. These programs will help increase profitability by looking at
the data and making critical decisions in maintaining the long-term goal of increasing sales.
To have a lower employee turnover one short term goal to combat that is to properly
train the employees. In a study by Al-suraihi et al. (2021) showing factors that lead
employees to quit their jobs were based on job stress, work environment, job satisfaction, and
3
poor training and feedback. By having a clear framework in which management can use to
train their employees, it will provide a structure that can be easily followed by the employees.
If employees are confused about their role in their job, it will create tension and distrust for
the lack of leadership not being provided by the organization. It’s important to train in work
safety, emergency procedures, adhere to health codes by the state, and establish restaurant
roles/duties.
Another long-term barrier in helping lower employee turnover is making sure the
restaurant is providing functional restaurant equipment for employees to use. For example, if
a refrigerator unit or Point of Sale (POS) system is not operating to its full capacity it can
hinder the work employee’s performance. In return the employee will be less satisfied with
their job and become frustrated by factors they have no control over. By buying equipment
that is long lasting/durable it will be able to handle everyday usage without breaking down
frequently. Employees won’t have to worry about working in an environment that can be
chaotic because of inadequate equipment. Having functional equipment will create a stress
free environment and good working conditions for all.

Financial Assumptions:

Items Start-up costs Expenses

Employee salaries 1.5 FTE servers @ $15/hr Labor costs per week: $7,294
2.25 FTE cooks @ 16/hr
2.25 FTE dishwashers @ Labor costs per year: $7,294 x 52
15/hr weeks = $379,288/year
1.35 FTE managers @ $23/hr
1.2 FTE bussers @ $14/hr
1.65 FTE bartenders @
$15/hr
0.875 FTE bookkeeper @
$20/hr
Labor cost per month: $7,294
x 4 weeks = $29176/m

Equipments $40,025.18 Energy: $658.72/year

Food $55.54/whole menu x [60 $3,998.88 x 52 weeks =

orders/day] 12 (whole menu) $207,941.76/year
 x 6 days = $3,998.88/week

Rent Average commercial lease in Low end per month: $2,500 per
Clairemont: $30-35/sq. ft. A month
year Low end per year: $30,000 per
year
Restaurant building space:
1000 sq. ft High end per month: ~$2,920 per
month
High end per year: $35,000

Supplies Dining-table x 12 Dining-table ：$ 590 x 12=$ 7,080

stools x 12 Stools :$ 175 x 12= $ 2,100
lamps x 6 Lamps : $ 65 x 6: $ 390
Air conditioning x 4 Air conditioning: $ 4280 x
Spoons and forks x 140 4=$17,120
Bowls and plates x 2 Spoons and forks: $46/4 pair x
Cooking tools x 20 140=$ 1,610
Bowls and plates: $60 /16 pair x
Total cost: $33,700 30=$ 1,800
Cooking tools: $180 x 20= $3600

Total cost: $33,700

Utilities Average restaurant cost Monthly Electric bill: $241.67

electricity cost per ft2 in the Annual Electric bill: $2,900
US per year: $2.90/ft2/yr
Monthly gas bill: $70.83
Average restaurant natural gas Annual gas bill: $850
cost per ft2 in the US per year:
$0.85/ft2 Monthly water bill @ 4,000
gallons per day: $941.81
Annual water bill @ 4,000 gallons
Average daily water use by per day: $11,301.72
restaurant: 3,000-7,000
gallons Monthly Spectrum internet, cable,
phone bill: $89.97
Annual Spectrum internet, cable,
phone bill: $1079.64

Total monthly utilities: $1,344.28

Total annual utilities: $16,131.36

Total Investment:

For one-time start up costs, that will include our kitchen equipment, dining supplies
and furniture, ordering and POS technology to keep track of orders coming in, and our loan
down payment. Kitchen equipment will set us back $40,025.18. This will last for several
years barring an accident, and by that point we can resell the equipment for newer versions.
Dining furniture and supplies will cost $33,700. We will have to replace some of these due to
eventual wear and damage but these should last us for the first year at least. POS technology
will include our cash registers, card readers, EBT machines, and order tracking tablets.
Expected costs for this will be about $20,000 with minimal replacements needed. We plan to
take a SBA 7(a) loan of $100,000 if possible and would like to pay 10% of that upfront,
meaning $10,000 will be paid off right away.
According to the expenses listed in the above table, it can be concluded that the total
investment required to start and operate for one year is $784,019.522, including the 10%
unexpected cost buffer.

Financial Plans:

Due to being a first-time business owner, it is unlikely we will be approved for a

traditional bank loan. We will be applying for an SBA 7(a) loan. We plan to pay off the loan
in under 7 years and the current SBA 7a interest rate for loans over $50,000 is 5.50%. If we
were able to borrow $775,000 and had to pay it off in 5 years, that would result in monthly
payments of $12,916 for the next 60 months. This would total to owing back $817,625 at the
end of 5 years. That likely wouldn’t be the case just because of all the non-fixed costs we
have to take care of per month so a 2nd round investment seemed appropriate. Our desired
partner is someone who is in the upscale foodservice industry space but has experience
franchising while keeping the brand standard to the utmost level. Our business is willing to
give away 15% equity for this key partner after 5 years to help with scaling. The valuation
would be at a 12,000,000 valuation, so an influx of investment of $1,800,000 for the 15%.
This of course is a target goal to hit $2,400,000 in gross sales after 5 years and the valuation
is just a 5x multiple. If the restaurant consistently made $200,000 per month which is $6,600
per day then the gross margins for the business are 73% at best. That is not factoring in waste,
turnover, holidays, sick pay, benefits, insurance, stealage, and increment in wages. If our
5-year projection plan hits on target each and every year we are open to an investment in the
form of venture debt on a convertible note. The maturity date on the convertible note would
be 36 months after it has been issued, to lower the risk of legal fees and to protect the
investors’ interests as well. There would be a valuation cap but it's too early to tell with a
restaurant startup, but that is there for the purpose of prohibiting dilution if we needed to fund
multiple rounds of investments. One of the incentives we wanted to value in a manager is an
investment in them, so we wanted to offer our manager 2.5% equity after 2 years with the
company and every year after it goes up by 0.5%. Excellence starts from the boss and
although we founders own the business, nobody is in our restaurant as much as the manager
is.
Company Summary

Ricchi’s Italian Cuisine is a sole proprietorship restaurant located at Balboa Mesa

Shopping center in Clairmont. This small business provides authentic Italian food by using
fresh ingredients from local vendors. This restaurant bestows not only a family style
ambiance, but it also brings a slice of modern European feel to San Diego. Our creative
approach is to offer an excellent service as well as value pricing of food at a minimal without
compromising quality, taste, or nutrition. Since this restaurant will be inside a shopping
center, we want to provide a place where folks can eat authentic Italian food. The surrounding
area comprises mostly fast food joints and Asian cuisine. By having the restaurant in this
location, we have a greater chance to stand out with a different palate and it will give
customers the option to eat genuine Italian food made by our professional chefs. Not to
mention our high-quality ingredients will outshine those of our competitors. Bringing a warm
and welcoming atmosphere will surely be our focus.

Company Mission Statement:

Ricchi’s Italian Cuisine may not be a chain restaurant, but the ability to create a
comfortable and relaxing environment in an overwhelmingly fast-paced lifestyle is what we
strive for. Our mission is to serve food of outstanding quality without breaking the bank,
whilst sharing our Italian Cuisine recipes with our customers. To create an environment
where customer satisfaction is our utmost highest priority is what we aim to achieve.
Executive Summary

Team and ownership structure: As a sole proprietorship, Ricchi’s Italian Cuisine is led by the
owner and is solely responsible for all responsibilities of the company including assets and
liabilities. The staff upon opening will include the kitchen led by the executive chef along
with a sous chef, line cooks, prep cooks, and dishwasher. The front house staff comprises the
floor manager, servers, hosts, and bussers. The bar area includes the bar manager and
bartenders. Each role will cooperate and help each other to ensure efficient and high-quality
operation of the company.

Product and services: Ricchi’s Italian Cuisine will supply the freshest ingredients received
from local vendors to guarantee high-quality meals. Menu crafted by our expert Italian
cuisine chefs with healthy alternative appetizers and entrees, and option for gluten-free
ingredients. Customers will be dining in an atmosphere filled with comfort to enjoy meals to
the fullest in our modern European California vibes interior, providing our best customer
service.

Company facilities: Ricchi’s Italian Cuisine will be located inside the Balboa Mesa shopping
center in Clairmont, San Diego, with no authentic Italian cuisine family restaurants around
the neighborhood. The size of the location is approximately 1,000 square feet, providing
enough capacity to house fifty customers as well as accommodate fifteen sets for the bar
lounge area. An abundance of parking spaces are also provided.

Marketing strategy: Ricchi’s Italian Cuisine’s marketing strategy will be to raise our brand
awareness and word of mouth through social media and rating platforms, such as Instagram,
Facebook, TikTok, Yelp, and Opentable. Getting our restaurant’s social media to be seen and
to interact with our customers to create a sense of authenticity and trust for future consumers.

Major goals: Ricchi’s Italian Cuisine’s major short-term goals are to advertise our restaurant
in ways that will reach all of our target audiences' age groups, thus opening up another branch
once we get enough brand reputation. Some other major long-term goals are to increase sales
and to lower employee turnover.

Health repercussions: Many of our dishes contain high amounts of calories and saturated fats
due to heavy use of dairy products and oil which won’t be ideal for someone on a
heart-healthy diet. Kitchen grease removal will also be a point of caution for us too in order
to avoid clogging the piping and sewage systems in the area.

Compelling reasons for investment: The waiters at Ricchi’s Italian Cuisine will receive
professional training before work to ensure that customers can enjoy the best service. Richie's
Italian Cuisine hired the most famous local chefs to make traditional Italian cuisine. The
ingredients used were from the most significant local supplier, and the freshest ingredients of
the day were chosen. At the same time, Ricchi’s Italian Cuisine is ambitious in the catering
market and will continue to enhance its competitiveness. The purpose is to better adapt to the
market environment and complete the Major goals of Ricchi’s Italian Cuisine.

Health repercussions and Analysis

Arguably the biggest health concern in this country is obesity-caused illnesses, and as
a culture, there isn’t a social limit on portion size. Italian food is known to be a staple in the
American diet but there are some nutritional consequences if consumed too much. The use of
heavy sauces, cream, butter, oil, and sugar can add a lot to the total caloric portions. Portion
size is one of the biggest reasons people who tend to eat out more are at higher risk for
obesity. At a restaurant “because the calories in the portions of food prepared away from
home are substantially higher than what is generally prepared away from home, dining out
has become a major risk factor for obesity.” ³ Most fine dining establishments, like ours,
don’t post caloric content for dishes simply because it's not common with local table service
restaurants at a higher level. Another health risk for the analysis section would be that
restaurants tend to offer plates too rich in calories for children. Children consume more
sodium at 86% too high and saturated fat 45% too high. With this data in mind, “children eat
almost twice as many calories when they eat a meal at a restaurant (765 calories) compared
with an average (425 calories) at home.” ⁴ Another risk for health consequences is improper
disposal of grease from fryers or anything cooked in oil. Restaurants that dump hot oil down
the drain risk clogging their pipes and sewage in the local area. That runoff is going to end up
in lakes, rivers, and streams. Luckily there are laws in place for restaurants from dumping
grease down drains. The solution is getting some grease dumpsters “which are
environmentally friendly ways to dispose of kitchen grease. These receptacles are designed to
hold leftover greases and oil.” ⁵ To strive for the cleanest and safest health standards, we must
practice methods to keep our customers and environment safe. We instituted standards from
the Emission and Municipal Solid Waste reduction methods. Environmentally-friendly
solutions we implemented were using solar panel energy instead of the traditional fossil fuels,
which “nearly 60% of the U.S. power supply derives from fossil fuels.” ¹ Something as
simple as saving on electrical usage over the course of decades can drastically reduce the
amount of greenhouse gas that's in our atmosphere. Another method for being much
environmentally friendly is the use of reusable silverware/china and even adopting the “bring
your own to-go containers”. A “.53-quart plastic bottle releases roughly 82.8 grams of
greenhouse gas emission.” ¹ Microplastic pollution is the #1 cause of long-term pollution in
our aquatic environment, and in our hometown of San Diego, we pride ourselves on trying to
keep our oceans clean. Having 3 separate waste containers is very critical as well: compost
(to promote agriculture, soil development, and reduce atmospheric pollution)., plastic, and
trash. Another option is having a garden part of the restaurant, one of the examples being the
French Laundry in Napa Valley, CA. This not only cuts on costs but is entirely sustainable
and we can use vegetables seasonally with our menu. The New York Times wrote, “their
one-acre garden provides as much as 90% of the vegetables that they serve at their Arrows
restaurant.” ²
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