Feasibility Study for a Restaurant in the United Kingdom
This assignment is designed to assess learning outcomes:
LO1 reflect on their employability competencies and career management skills and plan for their
future development;
LO2 undertake a feasibility study to establish the potential viability of a business or social enterprise;
LO3 use a range of market research tools and techniques to investigate a business or social
enterprise
The learning outcomes are provided here for information. Your ability to meet the learning outcomes will be
assessed by the assignment requirements and criteria for assessment given in the next section.
Solution
Introduction
To establish the viability of any business idea, it is essential to conduct a feasibility study.
The study is important, especially for a rational and objective uncover of both weaknesses and
strengths of the idea. It is also important to look into the threats and opportunities that lie in front
of the ultimate implementation, the resources, especially monetary resource, that would be
needed to fund and sustain the idea. At the end of it all, success prospects would be paramount to
determine. To gather all the relevant information, a market research would be required, together
with other consideration such as research concerning the sources of finance to support the
business. Additionally a concrete plan should be developed to enhance marketing, especially
when it is a new idea. Other considerations such as pricing strategies should also be made prior
to the onset of the implementation.
One of the best business ideas in the United Kingdom, currently, would be to open a
restaurant that would offer special food to the customers. It is a good idea based on the fact that
the food market will never go down regardless of the situation. Ultimately, the better service
would attract more customers. This makes the field vulnerable for exploitation, especially where
the demand is quite high. A little sophistication of the services would enable an adventure in the
field to turn into the biggest success. The sophistication would, for instance, be an extra service
offered on top of the main food service offered. This paper is aimed at conducting a feasibility
study on starting a sophisticated restaurant in the United Kingdom.
Market Research
Currently, in the United Kingdom, in a wide range of occasions, people are eating out
most of the time. This creates a big up in the restaurant business sector.Nonetheless, the business
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 3
is also changing, the eating behavior is rapidly changing, chains are, currently, taking over the
market, and the level of growth is so aggressive with lucrative offerings like improved quality, a
wider range of choices and strategies to capture more consistent customers each day (Startups,
2019, pp. 1). Additionally, the market of the business has currently taken a new strategy, the
option on take away. Away from the operations from well-established restaurants, technology
has made even the smallest restaurants visible to customers. Competition in the business is not
the only challenge in the business, owners should be keen to look into the spending of the
customers as well as the costs of starting the restaurant and making it to move to greater levels.
According to the Global Banking & Finance Review (2019 pp. 1), the challenges of
declining confidence of the consumer and revenue pressures create a big challenge in the
restaurant market. The condition in the market is even eyed to be worsening in 2019, due to the
continuous oversaturation of the markets as well as the pressure economic pressure being
experienced in the market. However, there is hope for entrepreneurs as they could focus on
some basic like demand-driven techniques as well as in organic growth. Ultimately, success
would be achieved in the least expected year and beyond. In yet another research conducted by
Butler (2018 pp. 1), the restaurant market in 2018, was on the downfall, the current increase
situation could, therefore, be said to be an effort of recovery from a declining position. With such
a situation, it would be advantageous for an upcoming restaurant to arise, and taking advantage
of the gap in the market, do the best in store to be leaders in the restaurant market in the United
Kingdom.
The restaurant business, just like any other business, requires a deep venture into the
needs of the customers. In the food market, it would be important for the entrepreneurs to know
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 4
that they would never have the ability to take over the entire market space. When a food service
premises aims at pleasing the entire population, it ends up being disliked by everyone. The
restaurant business should, therefore, be specific and eye at a given market space. A good
example would be to focus on coffee and snacks only. This would be a good brand for the
business as their services and products would easily be identified (Entrepreneur, 2012 pp. 1). On
the other hand, a restaurant business which concentrates on a huge menu would probably end up
with a an unspecific, poorly established brand. Ultimately, the most important thing to do before
starting up a restaurant business would be to look for a specific gap or niche and effectively
carve into the niche.
Last but not least, it is clear that, with the ever changing sophistications in technology,
the restaurant business is also affected. This is quite a challenge for the food industry and
especially the restaurants as technology is obviously not the center of focus of the operations.
Nonetheless, a focus on the food alone could not bear the expected fruits for the restaurants.
Therefore, for both the main and the technological perspective, the restaurants must always
ensure that their competing game is up to standards. According to Larson, Fultz and Rampoldt
(2016 pp. 1), when it comes to innovation in the restaurant market, it would be better for any
entrepreneur to start the innovation on their own or be first followers. In some cases, first
followers could even emerge in better positions than the innovation leaders.
Financing an Enterprise
According to Hellicar (2019 pp. 1), the financing of a business, is one of the major
considerations that should be made in determining the logic behind a given business idea.
Considerations should always be made for the sake of unexpected cost, and a good budgeting
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 5
strategy should always be considered to ensure that any given business is sustainable for the
longest period of time possible. However, for the startup of the business, including running the
business during its first year of operation Burn-Callander (2016, pp. 1), has a breakdown for
enterprises in the United Kingdom. When considerations such as Human resource overheads,
accountant’s fee, some legal costs, general administration costs and other none business specific
costs, the total amount for starting a business in the United Kingdom sums up to approximately
£22,756. This would be the amount without business specific costs being accounted for. Based
on the nature of a restaurant, there would be some additional cost to ensure that food would
always be available before the business is well known by the customers, and it starts supporting
itself.
The biggest challenge would be financing the restaurant business. One of the sources of
money that could finance a restaurant business would be personal investment. This should
always be considered to be the best way of staring to make an investment. It includes both the
monetary resource and property collateral. It could be considered as the best since it opens the
doors and captures the trust of other institutions such as the banks and investors, consequently,
when the restaurant has picked up, in terms of business momentum, it would be easy for the
owner to receive funding from these other sources without much problem.
The second financing strategy would be love money, or money obtained from people who
are closest to the entrepreneur. The sources of this finance could be identified as parents,
spouses, friends, or family. The money should be considered for refund at later stages of the
business. Nonetheless, it should always be considered that friends and family barely have enough
money. Additionally, some may go ahead to ask for equity in the business, which could affect
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 6
the initial aim of the entrepreneur. Ultimately, a relation in business involving family and friend
should, in no circumstance be considered as a joke. Alternatively,other sources such as bank
loans could also be considered as relevant sources of finance.
Marketing Plan for the Bussiness
A market plan, just like in any other business, would be very essential for a restaurant
business in the United Kingdom. The first aim of the business plan would be pointing out all the
services offered by the management to customers. The services that would make the restaurant
different from other restaurants would be on the forefront of the market plan. Nonetheless, other
conventional ways would be followed to ensure that the business plan is good to go (Gromfin,
2019 pp. 1). The first step would be to to set an objective based on the business situation at hand.
This would enable the business to always be guided in a specific way, as well as attain the
specific goals for the business
The second goal would be setting the marketing goals, the goals must always be related
to the objectives in the best way possible. Additionally, the goals should always be quantifiable
and specific. They would also be used to determine the increase in the top line revenue that the
plan is banked upon achieving. Succeeding this step a marketing budget would be required,
nonetheless, as much as the budget comes after and is dependable on the plan, it should never be
a reaction to the market plan. The budget would consequently lead to a good definition of the
customers of to the restaurant. As it was established earlier, a restaurant can never attract
everyone, it should, therefore, aim at catering for the needs of only a section of a population who
are interested in the services offered. The budget could be used as a distinguishing factor for the
customer bracket.
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 7
The Pricing Strategy
Based on the fact that an entrepreneur would come up with an idea to fill up a gap in the
market, which probably lacks competition in the beginning, two pricing could be considered at
first before any other changes could be made in the future. The first strategy to be considered
would be price skimming. Higher prices would be set compared to the services that would be
offered. This would be done with an aim of taking advantage of the market in its early stages
(Ferrell & Hartline, 2013 pp.167). However, as the market evolves and competition sets into it, it
would be inevitable to reduce the price of the services offered, based on the pricing of the
competitor and other factors that could affect prices in the market, such as the value of smart
technology in property management.
The second strategy that could be adopted, basically in the later stages of the market
evolution would be value-based pricing. This strategy would be beneficial for the enterprise
majorly if it has established a brand and has won over the hearts of its customers (Ferrell &
Hartline, 2013 pp.167). Based on their belief in the services offered by the enterprise, the
customers would develop a sense that it offers the best value for their money, and, therefore, find
it easy to pay well for the services. In the case of a more established rival enterprise offering the
same services, the enterprise could shift its pricing gears to competitive pricing, which is
normally done with consideration of the competitor price. Alternatively, a cost-plus pricing could
be used if the enterprise opts to always maintain a constant profit margin.
Conclusion (Summary)
The development of a business idea should be considered to be a step taken towards the
ultimate realization of a working, implemented idea. A lot of investment in research and
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 8
preparation should always be done to ensure that an idea is fully mature and effectively
implemented. Without high level commitment, it would be impossible to sustain the model of an
idea to its realization. The first thing to invest in, in terms of research, as discussed, is the market
research. This is basically done to establish the viability of a business idea. Viability depends
majorly on one criteria; the market gap that the idea would fill. The establishment of a market
gap would then give a go ahead signal to further push towards implementation of the idea.
Consequently, the idea developer should then start thinking about how to fund the idea
towards its implementation. This is done based on the assurance of the idea’s viability. Finding
the source of capital could act as an assurance that the business has kicked off. A strategic
market plan should, therefore, be developed to ensure that the newly started business continues
to grow through customer increase. Last but not least, the best pricing strategy for the business
should be adopted to ensure that both the customers and the enterprise are satisfied by the
benefits they attain from each other’s interaction.
FEASIBILITY STUDY FOR A RESTAURANT IN THE UNITED KINGDOM 9
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