WEAKNESSES- The store has just come into operation, so it has not generated many goodsignals for consumers.- There is not much capital to expand the location and business scale, to meett
PROJECT INTRODUCTION
BUSINESS IDEA
Food and beverage - entertainment services.
Snacking restaurants are flourishing in Vietnam, catering to the unique preferences and habits of the local population To align with market tastes and meet consumer demands, the Hymin Quan business project has been launched.
- Snack shops can put into business foods such as cheese sticks, chips, fried corn and drinks such as milk tea, coffee, and soft drinks,
Bui Van Ba Street, Tan Thuan Dong Ward, District 7, City Ho Chi Minh City.
ANALYZE STRENGTHS AND WEAKNESSES …(SWOT)
- The food is delicious, clean, attractive and served quickly.
- Clean and airy space creates comfort and relaxation for customers.
- Staff are friendly, hospitable, and enthusiastic
- The store has just come into operation, so it has not generated many good signals for consumers.
- There is not much capital to expand the location and business scale, to meet the needs of a large number of customers and compete with competitors
- Demand for eating and drinking is higher and higher.
The store's prime location, situated directly across from two major universities and along a bustling thoroughfare, ensures easy access and high visibility This strategic positioning, combined with the heavy foot traffic in the area, significantly enhances its appeal to potential customers.
- Besides, there are many shops and agents supplying different processing materials on the market.
- Some or many customers are still concerned about the safety, nutritional level and possible allergies when using the product (squid balls, shrimp balls, ).
- The risk of market share shrinking by competitors.
MARKET ANALYSIS
Situated directly across from the university, our store attracts a vibrant clientele of students, teachers, and young adults This prime location caters specifically to the high demand from young people aged 15 and above, making them our primary customers.
30 years old This is a group of customers who have entertainment and relaxation needs They are ice cream shops, cafes they make up the majority.
1.3.2 THE GOAL OF THE STORE
- Products are plentiful, diversified, service staff, professional
- The store will be a place for all customers to relax, a place to meet and exchange interesting friends after a tiring time.
- The main customers of the shop are students - students
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To gain a significant competitive edge in the entertainment, beverage, and dining sectors, restaurants must cater to the diverse needs of their customers Meeting these varying demands can lead to strong growth in today's dynamic market.
Although the number of shops and snacks in the area is more and more large.But we define our competitors as shops located within a radius of about 5 km.
ASSESSMENT OF INVESTMENT PROJECT
PROJECT EVALUATION
Snacking restaurant is expected to be in business for 5 years
- Total investment statistics is the calculation of all investment costs for a project, serving as a basis for planning and managing investment capital, determining investment efficiency of the project.
- Total investment of the project includes Site rental, equipment, contingency costs…
● The cost of re-renting the premises:
According to our group's reference about the market and the fact, the rental price of our shop has
Sign a 5-year lease, pay monthly.
Including machinery and tools for the sale of food such as frying machines, blender, refrigerators, gas cookers, sinuses are listed in the following table:
No Equipment Unit Amount Price Total
7 Set of pots, sinuses, pans The set 1 900,000 900,000
8 Bowls, chopsticks, spoons, forks, cups
Including equipment for the sale of food, serving customers such as tables, chairs, fans, air conditioners, television, are listed below:
No Equipment Unit Amount Price Total
For the purpose of quick capital recovery, we decided to apply the straight-line depreciation method, the expected construction time of the project is 5 years
Depreciation expenses are presented in the following table:
- Initial investment: 300,000,000 VND (in which equity is 150,000,000 VND and bank loan is 150,000,000 VND)
- Principal interest is paid evenly.
The cost of raw materials is determined by multiplying the price of each type by the monthly quantity used, and we anticipate that average spending on raw materials will remain stable year over year.
The cost of raw materials for a restaurant is influenced by its menu offerings and customer appeal, encompassing expenses related to various ingredients, spices, and flavors essential for food preparation The detailed cost categories are outlined in the table below.
No List price Quantity/ month
3 Fish ball + beef ball (kg)
8 Cooking spices of all kinds 50,000 600,000
Anvat.com will offer a diverse range of food and beverages, managed by the owner To enhance operations, the shop plans to hire an additional cashier and four part-time employees, with wages ranging from 22,000 to 25,000 VND per hour The staffing costs will be calculated based on this personnel plan.
Position Quantity Month Salary 1 month
Leasing costs for the premises will be settled on a fixed monthly basis, while the business registration fee will be covered during the project's first year.
In the initial year of launching our business, we will allocate funds for marketing expenses, including the printing of flyers for customer distribution and digital marketing campaigns on various websites Consequently, from 2022 to 2026, our fixed costs will exclude registration and marketing expenses, as outlined in the table below.
Transporting a restaurant involves various costs such as electricity and water, along with unexpected expenses that may arise from risks or uncertainties in the business process These unforeseen costs can also include employee bonuses Below is an estimation of the average variable costs over a one-year period, presented in the accompanying table.
The restaurant can accommodate up to 20 diners at a time, with an estimated daily service capacity of approximately 70 customers based on research of similar-sized establishments The snack bar is projected to be operational within the next five years.
The average price per customer for dining at the restaurant is outlined in the table below, reflecting the purchasing power of our target clientele We anticipate operating 360 days a year, and our estimated daily sales are derived by multiplying the selling price by the yield of each menu item.
No Name of type Price mean Quantity Money
We expect the average revenue to remain constant over the years.
Fixed tax rate (Tax rate): 20%
CP works 415,610,240 412,410,240 412,410,240 412,410,240 412,410,240 Fixed Cost 139,220,000 136,020,000 136,020,000 136,020,000 136,020,000 Variable cost 268,200,000 268,200,000 268,200,000 268,200,000 268,200,000 Depreciation 8,190,240 8,190,240 8,190,240 8,190,240 8,190,240
● NWC Table (Net working capital sheet)
In the first year, we intend to allocate VND 50,000,000 for purchasing various materials for our food and beverage sales, with an anticipated annual increase of VND 10,000,000 By the end of the final year, we expect to recover the total investment made over the years The details of our net working capital are outlined in the table below.
After 5 years of operation, the end of the project recovers the money spent at the beginning of each year to buy materials
After 5 years of operation, at the end of the project will sell the equipment purchased at the opening of the shop Resell for 20% of the original purchase price
2.1.9 PROJECT APPRAISAL BY NPV, IRR, PP, DPP
Profits from project investment are more profitable than depositing in the bank
The Snacks project has thoroughly assessed the impacts of its initial business activities, including renting premises and purchasing processing equipment Despite facing some risks and challenges, the project presents promising immediate opportunities The team conducted a comprehensive investigation, gathering data from various sources, and through careful analysis, they are confident in the project's future feasibility.
❖ Based on research and analysis results With the current price of the project NPV = 45,805,920 VND> 0, we can conclude that the project is highly profitable and should be invested
Investing in a restaurant presents a compelling opportunity for the group, with an opportunity cost of around 12% and an internal rate of return (IRR) of 17%, significantly exceeding this cost By meticulously planning, analyzing, and calculating these financial indicators, the project is poised to generate profits while ensuring swift capital recovery and timely repayment of bank loans.
THIS PROJECT SHOULD BE IMPLIED
RISK ANALYSIS OF THE PROJECT
PROJECT RISKS
● Wrong target group of customers
Eating is a fundamental human need, yet not everyone is inclined to purchase snacks Accurately identifying your target audience is crucial; failing to do so can lead to an unsuitable snack menu, unappealing restaurant decor, and ineffective customer engagement strategies.
• Unsuitable selection of a junk food business location
Choosing the right business location is crucial for success, but being situated near a university does not guarantee a profitable snack bar Most students primarily eat lunch on campus and head home after classes, which may limit their visits to nearby snack bars.
● Risks related to lack of food safety and hygiene
Food hygiene and safety are critical concerns for junk food owners, as incidents of food poisoning can lead to significant repercussions If customers fall ill, the owner is responsible for covering their healthcare expenses Additionally, such incidents can severely damage the restaurant's reputation, potentially leading to its closure.
● Number of "virtual" customers, low revenue
When I first started a snacking business, the number of customers was relatively large. Many of them come to the restaurant curious about new dishes; acquaintances, friends come to support This group of customers is called "virtual customer" That is, they only come to the shop to support and satisfy curiosity for the first time.
After a brief period of operation, customer numbers have declined significantly, leading to a shortage of potential and loyal customers This drop in clientele has resulted in decreasing revenue, making it challenging to sustain a long-term business.
● The menu is not rich, can not catch up with the "hot trend"
A boring menu; "Immutable" over time will make the shop unable to compete with other snacks in the area Without the "exclusive" and branded snacks of the restaurant,
18 there is only one way to build a rich menu and constantly innovate In it, there will be
"classic" snacks that are always loved by every audience And there are also novel snacks; attract customers' curiosity.
The first is the restaurants: serving dishes such as milk tea, ice cream, fast food, fish balls, This is a snack, so the direct competition is quite large Add
Unlike typical restaurants that operate primarily during morning to noon or evening hours, our restaurant offers service around the clock We also feature popular branded snacks, including KFC, Bun Bo Hue, and BBQ, ensuring a diverse menu for our customers at any time of day.
Building a trusted brand in the competitive food and beverage industry requires time and strategic policies Establishing a strong brand presence is essential for competing effectively with established names that already have customer loyalty.
Although the number of restaurants and snacks in the area is increasing day by day But we define competitors as stores within a radius of about 5 km.
- Address: Nguyen Huu Tho, Tan Phong Ward, District 7, City Ho Chi Minh
- Food: sweet potato shake, mixed rice paper, french fries, and some drinks.
Guests often face wait times exceeding 10 minutes when dining at the restaurant, and the service staff occasionally exhibit a poor attitude and slow response times Additionally, the restaurant's cramped layout and unappealing presentation contribute to an overall less-than-satisfactory dining experience.
- Address: Trung Son residential area
- Food: fried fish balls, fried sausages, french fries, cheese sticks, flan and accompanying drinks.
- The shop is known for many years
- Telephone ordering and home delivery services are available.
- Service quality is relatively good
- Born a long time ago, it has a certain number of regular customers
To ensure stability and growth, a restaurant must cultivate a base of loyal customers, as their revenue is crucial for success Initially, the restaurant may attract a significant number of visitors through promotions and the curiosity of acquaintances, friends, and family However, this influx often results in "virtual customers," whose contributions to revenue are temporary and tend to diminish over time.
Identifying the correct target customer group is crucial for creating an appropriate menu and implementing effective marketing strategies Regular checks on food hygiene and safety are essential to retain customers and protect the restaurant's reputation, as any incidents of food poisoning can lead to severe consequences, including closure Proper management and safe food handling practices are vital, as customers prioritize hygiene above all else when dining out Additionally, careful selection of ingredients, especially for homemade snacks, is necessary to ensure quality, and the presentation of food should be neat and tidy A clean environment, combined with high-quality food, significantly enhances customer satisfaction and encourages repeat visits.
The current trend is online platforms such as social networks, electronic applications, Therefore, the most popular way to promote products is through
20 platforms above society Specifically: posting articles and images about the restaurant's products on websites forums, fanpages, groups and personal accounts to spread and widely share products
Running ads on websites and Facebook is an effective way to promote your products Alongside online marketing strategies, we utilize various offline methods, including advertising on leaflets and posters within a 5 km radius of our restaurant Additionally, we design eye-catching large advertising panels and signs, and organize interactive contests to engage customers and draw them into our shop.
- Besides, there are some restaurants that are relatively cramped and narrow
- Service attitude is not good
SCENARIO ANALYSIS
3.2.1 WHERE COST OF GOODS SOLD AND VARIABLE COST INCREASE 10% a Business Report
171,270,44 3 b Project appraisal by NPV, IRR
In light of the numerous potential risks facing businesses, it is projected that a 10% increase in the cost of goods sold and a 10% rise in variable costs may occur due to market conditions, which are influenced by annual increases in the prices of goods, raw materials, and utility bills such as electricity and water.
The estimation results indicate that a 10% increase in the cost of goods sold (COGS) significantly impacts project profitability, as COGS constitutes a substantial portion of the overall profit If both COGS and variable costs rise by 10%, the project is projected to incur losses rather than generate profit.
Operating costs, particularly variable costs, pose a significant risk during the five-year operation period Fluctuations in expenses such as labor, staff salaries, and utility prices can lead to unforeseen costs that impact overall revenue To account for these uncertainties, the project estimates a 10% increase in operating costs for more accurate financial forecasting.
When considering a 10% increase in the cost of goods sold and operating costs, while maintaining selling prices to meet customer preferences, it is important to highlight the impact on financial metrics This scenario leads to a decrease in Net Present Value (NPV) and an Internal Rate of Return (IRR) of only 2.53%, indicating significant risks that may jeopardize the viability of the project.
3.2.2 WHERE THE SALES INCREASE 10% a Business Report
267,904,04 3 c Project appraisal by NPV, IRR
Over a five-year period, maintaining constant production and goods sold costs while achieving a 10% annual revenue increase significantly boosts the Net Present Value (NPV), leading to a substantial rise in profitability The Internal Rate of Return (IRR) also experiences a remarkable increase, rising 2.11 times from the initial estimate to an impressive 36% Consequently, this project presents a highly lucrative opportunity.
SENSITIVITY ANALYSIS
The next step in the project's risk analysis is sensitivity analysis, which examines the impact of a 10% increase in operating costs on the project's Net Present Value (NPV) The analysis indicates that the project remains feasible; however, with a discount rate of 40%, the NPV turns negative.
Current Worst Base Best Breakeven
Units sold of tea milk 25,000 22,500 25,000 30,000 22,095
PROJECT’S CONCLUSION
Given the potential risks associated with business operations, a forecast is made predicting a 10% increase in Cost of Goods Sold (COGS), variable costs, and other related expenses This projection considers the annual rise in commodity prices, material costs, electricity, and water bills, reflecting the current market conditions.
When the cost of goods sold (COGS) rises by 10%, it significantly impacts the project's profitability, as COGS constitutes a substantial portion of the overall profit If both COGS and variable costs increase by this margin, the likelihood of the project remaining profitable diminishes considerably.
When assessing project risks, it is crucial to consider the potential increase in operating costs over a five-year period Factors such as rising labor expenses, salary increments, and escalating utility prices can significantly impact overall costs and revenue Therefore, it is advisable to estimate an increase of 10% in operating costs to accurately forecast financial ratios.
Increasing the cost of goods sold and operating expenses by 10% while maintaining sales to cater to customer preferences significantly impacts financial metrics This adjustment leads to a net present value (NPV) of 45,805,920 VND and an internal rate of return (IRR) of 17%, which is nearly 14% lower than the project's initial estimates While the project remains viable, it poses risks and is unlikely to generate profits for investors.
The next phase of the project's risk analysis involves conducting a sensitivity analysis to evaluate the impact of a 10% rise in operating costs on the project's Net Present Value (NPV) As illustrated in the table, the project remains feasible, as a Weighted Average Cost of Capital (WACC) of 11.1136% results in a positive NPV.
Our project aims to generate profits for businesses while providing customers, particularly students and office workers, with nutritious and delicious water It addresses the human resource challenges faced by companies seeking to recruit both short-term and long-term workers for various projects, thus enhancing workforce availability In an increasingly competitive environment, our initiative promotes consumer demand and supports a healthier, environmentally friendly lifestyle, with a focus on organic and children's products After thorough calculations of Net Present Value (NPV) and Internal Rate of Return (IRR), our project demonstrates significant potential to attract both domestic and international investors, showcasing the viability of introducing Vietnamese products to the global market.