Business Plan for Room for Dessert Essay

Words: 958
Pages: 4

Memo to: from: subject: Business Plan for Room For Dessert
Date: [ 21.09.2010 ]
In this memo I summarize my analysis of the business plan for Room for Dessert (RFD) and evaluate if the proposed venture represents a good investment opportunity. My analysis focuses on the fit between the people and the opportunity only.
Successfully building a multi unit restaurant chain demands a team of people with considerable industry experience and execution skills. The people behind RFD have a deficiency in both. Also the business model lacks process innovation and is therefore easy to copy. The identified market could be attractive to some extent but it is unlikely that it will develop outside a niche. This increases uncertainty that the
…show more content…
Tapping into an unserved need of a growing market segment by operating a hard to copy business model increases the likelihood of the venture’s success and thus minimizes the risk involved. 4) Market
The business plan provides some qualitative evidence that a “favorable environment for a dessert-focused restaurant” exists but it fails to quantify the size and growth potential for a fine dining option in this specific market segment. Forecasts for related product categories such as luxury chocolate in retailing would help in evaluating the potential market. The choice of the luxury segment in the market is thus justified by the intensifying competition in the quick-service and casual segments and not by market data suggesting a need for a luxury option. 5) Business Model
The proposed business model has very attractive cash flow characteristics like the restaurant industry overall: suppliers usually invoice after the customers have paid, salaries are paid at the month’s end and product margins are high especially for beverages and desserts. It would have been beneficial to provide some food cost calculations based on the sample menu in order to show the reasonableness of the data provided in the plan.
However the restaurant industry has very low entry barriers and concepts are easy to copy. People, customized service, quality, portioning and ambiance are given as key differentiators but none of them can be protected.