EEE451 Case 4 Questions
September 11, 2012
Case 4 THAIFOON RESTAURANT
* Prepare a spreadsheet for the restaurateur to project his net profits.
From exhibit 3, Thaifoon restaurant forecast that there would be 18 turns (5 lunch turns and 13 dinner turns) each week. And the owner planed to have 30 or fewer seats in order to meet the legal regulations and design. So it means there are 30 seats for each turn. Daily Turnover Ratio | | Lunch | Dinner | Revenue | $12.00 | $25.00 | Monday | 1 | 1.5 | Tuesday | 1 | 1.5 | Wednesday | 1 | 1.5 | Thursday | 1 | 1.5 | Friday | 1 | 2.5 | Saturday | 0 | 2.5 | Sunday | 0 | 2 | Number of Seats | 30 | |
Moreover, the restaurant would open 52 weeks …show more content…
Also the competition is intensive between those Thai restaurants. He mentions that the city’s population is expected to increase by 20,000, and feel confident that the demand is big enough to support 5 similar Thai restaurants. I don't think it is that easy to attract a lot of customers from other Thai restaurants in the first year unless food is really good and unique in Thaifoon. In addition, he didn't do proactive marketing research to check people’s taste preference and attitude. All the data he got is based on whole Canada food industry, not specifically about London.
Then the location is good but foot traffic in lunch hour is very different that in dinner hour as most people are going back home from work and entertainment. I think there will not be enough people coming for dinner, especially there is no street parking nearby. Real costs may exceed projected costs. Especially for the first year, there are a lot of unexpected costs occurring. Therefore, Mr. Philmphrachanh should have enough number in hand in case of the short of the cash flow, which is the most important for a business. Since he has $100,000 from his relatives and saving, he doesn't need to worry about the interest rate expense. But what if he needs more money and the sales are less than he projected? I would recommend he prepare some money in advance, such as take a