Bahria University Islamabad

Department Of Business Administration

Page 1 of 26

Page 2 of 26

TABLE OF CONTENTS
PAGE
I.

Executive Summary......................................................................................... 4

II. Business Description........................................................................................ 4

A. Description of product/ Services.......................................................................5
B. Industry background........................................................................................ 5
C. Venture or firm background..............................................................................5
D. Goals and milestone objectives........................................................................6
III. Marketing plan and strategy............................................................................ 6
A. Target
market
....6
B. Competitor....................................................................................................... 7
C. Pricing strategy................................................................................................ 7
D. Operations and support...................................................................................7
A. Quality targets................................................................................................... 7
C. Service support................................................................................................ 9
V. Management Team............................................................................................ 9
A. Experience and expertise....................................................................................... 9
B. Organizational structure....................................................................................... 10
VI. Financial Plans and Projections............................................................................11
A. Income Statement.......................................................................................... 11
B. Balance Sheet................................................................................................ 12
C. Statement of cash flows................................................................................. 13
D. Capital budgeting........................................................................................... 14

Page 3 of 26

VII. Appendix............................................................................................................ 20

Page 4 of 26

1. Executive summary
This plan we are presenting here is for Green Heaven restaurant, it will be a new medium
sized restaurant that will be located in the middle of the Islamabad city in F7. Green
Heaven is an exciting new concept offering fresh organic food. Green Heaven focus will
be only on organic and creative ethnic food. The mainly emphasis on organic ingredients
is based on Green Heavens dedication to sustainable development. We have forecasted
the income statement, balance sheet and cash flow statement for 5 years. We have also
used capital budgeting technique like NPV, payback period, IRR, Profitability index. We
have also calculated the BETA of our restaurant by using HAMADA equation. We have
done financial forecasting for 5 years along with pre-money and post-money evaluation.
We have also conducted the business description with its industry background, a little
about the venture and about the goals and objectives. We have further discussed the
marketing plan and strategy. We have divided our target markets into 3 different
segments. We further then discussed the operations and supports.
1. Business Description
Mission
Green Heaven is a very great, good and healthy place to eat; it will combine an
intriguing atmosphere with excellent and healthy food that will be really good for
the people who will eat there. We want to deliver the best possible quality and
services and want to earn fair enough profit.
Vision
Through a shared commitment to excellence, we are dedicated to the
uncompromising quality of our food, service, people and profit, while taking
exceptional care of our guests and staff. We will continuously rive to surpass our
own accomplishment and be recognized as a leader in our industry

Page 5 of 26

A. Description Of Product And Services

Green Heaven will be offering the people of Islamabad a place where they will be having
a great healthy food in a very good environment. The chef that will be hired will be
having a large repertoire of ethnic ingredients and recipes. Green Heaven is planning that
in many of things they purchase, the recommendation of chef will also be considered.
Recipes will be used to provide the customers with a diverse and unusual menu. Green
Heaven will also be emphasizing on the healthy dishes.
B. Industrial Background
Currently in Islamabad we will find a large number of restaurants and food huts
providing different kind of foods, each and every of them have their own
specialization. The food market is greatly increasing due to the increase in the
population of the people. Some of the well known restaurants in the city are Marriot,
Jahangir, Habibi, Savors etc.
C. Venture Background
The venture that we will be launching will be a bit change from the others restaurant
that are operating in the city We will be introducing for the first time an organic
restaurant in the city with some of healthiest food menu and some fine quality
services.
D. Goals & Objectives
We want to focus mainly on the customer satisfaction and want to create a good brand
image for our restaurant. If our venture started running successfully and if we earn a
lot of profit we will then purchase our own land for the farming of the organic food by
ourselves under supervision of experience staff and we also have plans to open
different branches of our restaurant in some other different cities of Pakistan.

Page 6 of 26

2. Marketing Plan & Strategies

Target Market & Customers
The current population of Islamabad is about 2.6 million. As the founder of GREEN
HEAVEN has connection within the area of Islamabad and also in its neighbor city of
Rawalpindi therefore we have an excellent feel for the area and its customers. They will
all share something alike, which is a feeling of being in the crowd and having gotten it in
life although the crew will be different and will not connect to each other in each
segment, and each segment is complementary to the others, We also do plan to raise
menu rates as the restaurant gets more and more crowded and to make sure we are
charging a premium for the feeling if being in the crowd
Customers
GREEN HEAVEN believes that the market can be divided into different groups that it
will be aiming to target. The first group can be divided as the rich ones, the second group
can be divided as young energetic group, the third group can be divided as health
conscious who will be really willing to go for the organic food and the last group that will
be really interested in the healthy food offerings will be the men and women that are on
dieting.
Management
Market Segmentation
Rich Ones
Many of the rich are tech workers these days, and most of these work really hard for
earning more money. Their life has become really busy and also of the people who help
them in making them help in making that businesses possible. They hang out with each
other but they want to get away from it and use their money that they are earning on their
health. Because this wealth has come fairly easily for them, it is particularly easy to
separate them from their money again and they spend the most on drinks and food etc.

Page 7 of 26

Young energetic
The restaurant will have an atmosphere that will encourage people to come as couples or
some in groups along with their friends. GREEN HEAVEN does want to be a social place
where people meet each other and develop network.
Dieting Men & Women
The organic food of GREEN HEAVEN will always have a line of extremely delicious
very low fates meals. GREEN HEAVEN will have separate tables for women in which
they may sit together and may discuss all matters while feeling good about the food they
eat at GREEN HEAVEN.
A. Competition & Market Share
As far as competitor in the organic food market is concerned we wont be facing any
of it as there is no organic restaurant around the city but we can face some
competition from the other entire restaurant and it will be challenging for us to attract
the customers from the normal food restaurant to the organic food restaurant.
C. Pricing Strategy
Our menu will be fully about the organic foods. We wont be providing anything else
apart from it. Initially we will target to earn less profit as the venture will be new but
with the passage of time once we make our hold strong in the market and attract more
customer then slowly we will increase our margin depending on the sales and reaction
of the customers.
D. Promotion
As far as the promotion of the venture is considered we will use Newspaper for the
advertisement. We will also place some banners in the main location of the cities. We
will create a face book official page for it as well. We will also visit different
universities and colleges to inform the people about the benefits of the organic food
Page 8 of 26

and we all introduce our venture to them. We will also be having our own website and
we will warmly welcome the people to share their own feedback and to inform us of
our suggestion too.
3. Operations & Support
A. Quality Targets
One of our main focuses in all the entire venture will be about our quality. We
believe that if we can provide top quality healthy food and perfect environment
then we are sure that we can really create a strong grip on the business and can
really capture a lot of the market. Our main target will be always the quality.
B. Technology Requirement
As far as the technology is concerned so we wont be in need of any such advance
technology but still be in need of some of the electronic stuff like Air-conditioners,
LCD, Computer, Credit Card Machine, Software for the financial record, etc.
C. Service Support
All the services that we will perform, provide and arrange will be to purely promote,
improve, conserve and restore the mental and physical well being of the personnel. It
will be the part of our customer service and support as well.
4. Management Team
Experience & Expertise
GREEN HEAVEN will be a having a really strong management team for the services.
MANSOOR SHAHZAD will be the general manager. He has a vast experience of
working in organization with more people. Ali will be responsible for the finance and
accounting section as he is vastly experienced in it. Ali financial skills will be invaluable
in keeping GREEN HEAVEN on the right track and making it more profitable. In the last
GREEN HEAVEN will be having chef Gulzar who will be totally responsible for all the
cooking food stuff. Gulzar has a vast experience of 15 years and is well aware of the local
community and people around.
Page 9 of 26

The most important thing towards GREEN HEAVEN is the financial success which will
be achieved by having some strict controls over the financial records. Success will be
ensured by offering a very high quality services and providing a very clean environment
along with really well decorated interior. GREEN HEAVEN has also do plan to raise their
rates with the passage of time as the restaurants gets more and more crowded.

Organization Structure
Our organization structure for the new venture is given below in the Table

Owner

Restaurant manager

Executive CHEF

Financial Manager

Assistant CHEF
Line Cooks
Marketing Manager

HRM Manager

Operation Manager

Front line Manager

Workers

Page 10 of 26

5. Financial Plans And Projection

Assumptions
1.
2.
3.
4.
5.
6.

We use financial calculator for calculations

Startup capital is RS 1,500,000
Our business is 100% equity base business
We use HAMADA equation to find out the Beta
Use CAPM to calculate the cost of business
sales increase by 3% annually for the first year

70% Of Sales collected in a period of sales

30% of sales collected in period of after sales
3% Increase in sales from 2nd month
7. Miscellaneous expense are increase by 2% of sales
8. Utilities expense are increase by 15% of sales
9. Sales increase by 16% in year2 and 16% for 3rd year, 16% in year 4 and 16% in year 5
of annually sales
Cost of sales 10% of sales
Admin & Selling exp 8% of sales excluding depreciation

Balance

Page 11 of 26

Sheet
2% of sales
A/R increase by 25% of
sales
A/R increase by 40% of
sales
Stock increase by 5%
of sales

A/P 32% of sales

A/P 23% of sales
A/P 12% of sales
A/P 7% of sales

10. If additional funds needed in the business we provide the funds by own

Green Haven
Income Statement
Page 12 of 26

Income Statement
Net Sales

4115688.573

Less: Cost Of Sales

956170
3159518.57
3

Year 2
4774198.7
45
477419.87
45
4296778.
87

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

51000
11004
10008
720000

51000
11004
10008
720000

51000
11004
10008
720000

51000
11004
10008
720000

51000
11004
10008
720000

3144012

3144012
71612.981
17
572903.84
93
644516.8
305
3788528.
831

3144012

3144012

3144012

75000

76880

77650

580000

596450

610290

655000

673330

687940

3799012

3817342

3831952

508250.0
395

1185251
.489

1964403
.648

2874872
.951

508250.0
395
203300.01
58

1185251
.489
474100.5
957

1964403
.648
785761.4
59

2874872
.951
1149949.
18

304950.0
237

711150.
8936

1178642
.189

1724923
.771

Gross Profit
Admin & Selling
Expense
Manager
Kitchen Supervisor
Chefs
Servers/ Waiters
Delivery Boy
Dishwasher
Cleaner
Dep. Expense
Floor Air Conditions
Freezers (12 cf.)
Generator 1.5 kva
Rent Expense
Total Fixed
Expenses

Year 1

Miscellanea Expense

82313.77146

Utility Expenses
Total Variable
Expense
Total Admin &
Selling expense

617353.2859
699667.057
4
3843679.05
7

Earnings Before Tax

& Interest
Interest Expense
Earnings Before Tax
Income Tax (40%)
Earnings After Tax

684160.484
4
0
684160.484
4
0
684160.484
4

Year 3
5538070.
544
553807.0
544
4984263
.489

Year 4
6424161.
831
642416.1
831
5781745
.648

Year 5
7452027.
723
745202.7
723
6706824
.951

A.
Page 13 of 26

Green Haven
Balance Sheet
Year 1

Year 2

Year 3

Year 4

Year 5

2751585.6
66

Balance Sheet
Current Assets
353,879
1234706.5
7
205784.43
1,794,370

63145.693
73

182,568

722579.67
58

1909679.5
238709.94
2,211,535

2215228.2
276903.53
2,674,700

2569664.8
321208.1
3,613,453

1863007
223560.84
4,838,154

Non Current
Assets
Floor Ac
Less: Acc. Dep
Book Value

360000
51000
309000

309000
51000
258000

258000
51000
207000

207000
51000
156000

156000
51000
105000

Floor Ac
Less: Acc. Dep
Book Value

80000
11000
69000

69000
11000
58000

58000
11000
47000

47000
11000
36000

36000
11000
25000

Generator
Less: Acc. Dep
Book Value
Net Plant
Equipment
Total Assets

75000
10000
65000

65000
10000
55000

55000
10000
45000

45000
10000
35000

35000
10000
25000

443000
2,237,370

371000
2,582,535

299000
2,973,700

227000
3,840,453

155000
4,993,154

1,421,530

1527743.6

1,273,756

1027865.9
2

521,642

1500000

1054791.0
24

1699943.9
17

2812587.1
06

4471511.8
76

2,921,530

2,582,535

2,973,700

3,840,453

4,993,154

Cash
Accounts Receivable
Stocks

Liabilities
Current Liabilities
Accounts Payable
Long Term Liabilities
Long Term Debt
Owner's Equity
Equity
Total Owner's
Equity
B.

Page 14 of 26

Green Haven
Cash Flow Statement
Cash flow Statement
Cash flow fro Operating
Activities

Year 2

Year 3

Year 4

Year 5

304950.02
37

711150.89
36

1178642.1
89

1724923.7
71

6001

6001

6001

6001

(-) Increase (+) Decrease in A/R

(-) Increase (+) Decrease in
Inventory

-674972.93

-305548.7

-354436.8

706658

-32925

-38193.57

-44304.57

(+) Increase (-) Decrease in A/p

106213.6
290733.3
063

-253987.38

-245890.08

97647.26
506224.04

119422.2
436

540011.7
385

2029005.
991

0
290733.30
63

119422.24
36

540011.73
85

2029005.9
91

353,879
63,146

63,146
182,568

182,568
722,580

722,580
2,751,586

Net Income/ Loss

Add: Dep

Net cash provided (used) by

OP. Act
Cash flow for Investing
Activities
Capital Expenditure (CAPEX)
Net cash provided (used) by
Inv. Act
Cash flow for Financing
Activities
N/P
Net cash provided (used) by
Fin. Act
Net Change in cash

Cash Beginning
Cash Ending

Page 15 of 26

Green Haven

Capital Budgeting
Year 0

Year 2

Year 3

Year 4

Year 5

477419
4115689
9

553807
1

642416
2

7452028

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

240000
432000
600000
540000
216000
108000
216000

51000
51000
11004
11004
10008
10008
720000 720000
314401 31440
2
12
82313.7 71612.
7
98
617353. 572903
3
.8
699667. 64451
1
6.8
384367 37885
9
29

51000
11004
10008
720000
31440
12

51000
11004
10008
720000
314401
2

51000
11004
10008
720000
3144012

75000

76880

77650

580000
65500
0
37990
12

596450

610290

673330
381734
2

687940

Earnings Before Tax

272009.
5
0
272009.
5

Income Tax (40%)

Earnings After Tax

0 394268
272009. 59140

17390
59
0
17390
59
695623
.4
10434

260682
0
0
260682
0
104272
8
156409

Cost Of Project
Initial Investment in WC
Net Cash flow over
project life
Net Sales
Admin & Selling
Expense
Manager
Kitchen Supervisor
Chefs
Servers/ Waiters
Delivery Boy
Dishwasher
Cleaner
Dep. Expense
Floor Air Conditions
Freezers (12 cf.)
Generator 1.5 kva
Rent Expense
Total Fixed Expenses
Miscelleance Expense
Utility Expenses
Total Variable
Expense
Total Admin & Selling
expense
Earnings Before Tax &
Interest
Interest Expense

Year 1

1266750
-50000

240000
432000
600000
540000
216000
108000
216000

98566
9.9
0
98566
9.9

3831952

3620076
0
3620076
1448030
2172045

Page 16 of 26

Add: Dep Expense

Opportunity Cost
Salvage Value
Project Net Cash flow
C.

131675
0

5
6001
278010.
5
0
0

1.9
6001
59740
2.9
0
0

35
6001
10494
36
0
0

2
6001
157009
3
0
0

2178046
0
0

278010.
5

59740
2.9

10494
36

157009
3

2178046

6001

Page 17 of 26

Year
1

Year
2

1.26
1.11
37284
0

Year 3

Year 4

Year 5

1.47
1.29
68379
1

2.09
1.88
14009
44

3.51
3.2
25855
87

9.27
8.84
43165
12

1.83

1.84

1.86

1.67

1.49

0.76%
0.30%
0.83%

0.89%

0.90%

0.90%

0.90%

0.11%

0.23%

0.30%

0.34%

0.28%

0.41%

0.42%

0.38%

Liquidity Ratio
Current Ratio
Quick Ratio
Working Capital
Total Asset
Turnover
Profitability
Ratio
Return On
Investment
Return On
Equity
Ratio Analysis

Current Assets/ Current

Liabilities
C.A - Inventory / C.L
C.A - C.L
Net Sales / Total Assets
Net Sales-COS/ Net Sales
NPAT/ Total Assets
NPAT/ Owner's Equity

HAMADA Equation
BL = Bu (1+(1-t) D/E)
Bu = BL / (1+ (1-t) D/E)
BL = Beta of leverage
Company
Bu = Beta of unleverage company
D = Debt
E = Equity
BL = 1.08

Global Resturant Industrial

Beta

www.pages.stern.nyu.edu

D/E = 13.15%
Bu = 1
Cost of Equity = Rf + B (MRP) + Lp + Mp
8.5% + 1 (12.24%) + .19
+ 5%
44.74%
D.

Page 18 of 26

Net Present Value

NPV = - 1316750 + 278010.50/(1.44)^1 + 597402.90/ (1.44)^2 + 1049436/
(1.44)^3 + 157009/ (1.44)^4
+ 2178046/ (1.44)^5
207183
Profitablity Index
PI = PV of Future Cashflow/ Initial Cost
1523933/ 1316750
1.15
E.

AFN
Form
ula

(Ao /So)gso - (Lo/So) gso - S1 x M x (1-PQR)

2nd
Year

356211 - 210723 304950

-159462

3rd
Year

297370/5538070.50 (763871) - 1273756/5538070 (763871) 5538070(.128411)

410165 - 175690 711150
-476675

4th
Year

3840453/6424162 (886092) - 1027866/6424162 (886092) 6424162 (.18342)

529718 - 141774 1178642
-790698

5th
Year
AFN

4993154/7452028 (1027866) - 521642/7452028 (1023866) 7452028 (.231457)

688710 - 71950 1724924
-1108163

Page 19 of 26

Payback
Period
No- of years prior to full recovery + Unrecovered cost at the start / Cash flow
full recovery period
Year
Year 0
Year 1
Year 2 Year 3
4
131675 278010.5 59740 10494 15700
Cash Flows
0
156
2.9
36
93
131675 1038739. 44133 60809 21781
Commulative Cashflow
0
484
7
9.6
92

during
Year
5
21780
46
43562
39

No- of years prior to full recovery + Unrecovered cost at the start / Cash flow during
full recovery period
2.420546846

Internal Rate of
Return

51.49%

Net Present Value

207183

Profitability Ratio

1.15
2.42
Years

Pay Back Period

Value of Resturant 31/12/2018 = FCF (1+g) / Cost of equity

g
VOP = Rs 1,905,000

Page 20 of 26

Appendix
Depreciation Schedule
Cost: RS360,000.00, Salvage: RS 54,000.00, Life: 6 years
Convention: Full-Month, First Year: 12 months

Depreciation Schedule

Year

Book Value
Year Start

Depreciation
Expense

Accumulated
Depreciation

Book Value
Year End

2014

RS360,000

RS51,000.00

RS51,000

RS309,000

2015

RS309,000

RS51,000.00

RS102,000

RS258,000

2016

RS258,000

RS51,000.00

RS153,000

RS207,000

2017

RS207,000

RS51,000.00

RS204,000

RS156,000

2018

RS156,000

RS51,000.00

RS255,000

RS105,000

2019

RS105,000

RS51,000.00

RS306,000

RS54,000
Page 21 of 26

Monthly Depreciation = Dep. Expense / 12

= 51000/12
= 4250

Depreciation Schedule
Cost: RS80,000.00, Salvage: RS14,000.00, Life: 6 years
Convention: Full-Month, First Year: 12 months

Depreciation Schedule

Year

Book Value
Year Start

Depreciation
Expense

Accumulated
Depreciation

Book Value
Year End

2014

RS80,000

RS11,000.00

RS11,000

RS69,000

2015

RS69,000

RS11,000.00

RS22,000

RS58,000

2016

RS58,000

RS11,000.00

RS33,000

RS47,000

2017

RS47,000

RS11,000.00

RS44,000

RS36,000

2018

RS36,000

RS11,000.00

RS55,000

RS25,000

Page 22 of 26

2019

RS25,000

RS11,000.00

RS66,000

RS14,000

Monthly Depreciation = Dep. Expense / 12

= 11000/12
= 917
F.

Page 23 of 26

Depreciation Schedule
Cost: RS75,000.00, Salvage: RS15,000.00, Life: 6 years
Convention: Full-Month, First Year: 12 months

Depreciation Schedule

Year

Book Value
Year Start

Depreciation
Expense

Accumulated
Depreciation

Book Value
Year End

2014

RS75,000

RS10,000.00

RS10,000

RS65,000

2015

RS65,000

RS10,000.00

RS20,000

RS55,000

2016

RS55,000

RS10,000.00

RS30,000

RS45,000

2017

RS45,000

RS10,000.00

RS40,000

RS35,000

2018

RS35,000

RS10,000.00

RS50,000

RS25,000

2019

RS25,000

RS10,000.00

RS60,000

RS15,000

Monthly Depreciation = Dep. Expense / 12

= 10000/12
= 834
G.

Page 24 of 26

Depreciation Schedule (Motor Bikes)

Cost: RS90,000.00, Salvage: RS21,000.00, Life: 6 years
Convention: Full-Month, First Year: 12 months

Depreciation Schedule

Year

Book Value
Year Start

Depreciation
Expense

Accumulated
Depreciation

Book Value
Year End

2014

RS90,000

RS11,500.00

RS11,500

RS78,500

2015

RS78,500

RS11,500.00

RS23,000

RS67,000

2016

RS67,000

RS11,500.00

RS34,500

RS55,500

2017

RS55,500

RS11,500.00

RS46,000

RS44,000

2018

RS44,000

RS11,500.00

RS57,500

RS32,500

2019

RS32,500

RS11,500.00

RS69,000

RS21,000

Monthly Depreciation = Dep. Expense / 12

= 11500/12
= 958

Competitive Edge
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Our competitive edge is that we will be the first in the market to introduce an organic
restaurant in Islamabad which will be really a competitive advantage to us also because
people prefer healthy food for themselves and we often find a lot of people that they do
not compromise one health.
SWOT Analysis
Strengths:
The first to introduce organic restaurant in the area
Hygienic and healthy food
More attraction for the people as it will be greatly beneficial to health
Weakness
Attitude of staff
Employee turnover
.Opportunities
Line extension
Horizontal and vertical brand extension
.Threats
Lack of supplies
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Competitors

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