c

FEASIBILITY REPORT
ON
³RESTURANT´
Feasibility Report as a part of partial fulfilment of PGDM
degree.

Submitted by: NITENDRA SINGH

Enrolment no: 1074

Under the Supervision of: MR. Y.P.SINGH

Faculty of Management Department.
Submitted to:
Department of Management, IISE, LUCKNOW

INTERNATIONAL INSTITUTE FOR SPECIAL EDUCATION

KANCHANA BIHARI MARG, KALYANPUR, LUCKNOW, PIN -226022
Acknowledgement:

Before I embark upon the details of this project, let me t ake this opportunity to
express my heartiest gratitude towards the people who have provided invaluable
help & support through the entire duration the project. It gives me immense
pleasure to express my deep sense of gratitude to c Mr.Y.P.SINGH, FACULTY
OF MANAGEMENT, for his valuable guidance and consistent supervision
throughout the course and providing me an o pportunity to present a Feasibility
report of ³RESTURENT´. I would like to thank him for giving us excellent
suggestion and affectionate, encouraging through development of project a nd
for devoting their precious time. I offer thanks to them for co-ordination and
grateful to all our well-wishers who extended their support and to the entire
friends for their valuable help throughout the work. It was an indeed a learning
experience for me.

Nitendra singh

DATE:

PLACE:
PREFACE:
c

This project is made mainly with a concern so as to know the practical

knowledge of financial Feasibility Report related to establishment of any

business. This project made me aware of the importance of the preparation of

feasibility report related to the ³RESTURENT´. This report will talk about the

owner capital, Market analysis related to competitors, Estimate of income and

expenditure, Source of income and many more things. This helped me to

understand the company view point related to this feasibility concepts.

c
c

TABLE OF CONTENT
TOPIC COVERED PAGE NO.

PROJECT AT A GLANCE

WORKING ASSUMPTION

MARKET ANALYSIS

FINANCIAL ANALYSIS

PROJECT APPRAISAL

RISK ANALYSIS OF PROPOSED PROJECT

CONCLUSION
c

PROJECT AT AGLANCE:
NAME OF THE PROMOTER ïcNITENDRA SINGH

ADDRESS : IISE CAMPUS, KALYANPUR, LKO.c

CONTACT NO : 9956866981c

EMAIL ID : nitendra16@gmail.com

COST OF PROJECT : Rs.699280

MEANS OF FINANCE : Owner¶s capital-349280

Loan- 350000

ARR = 68.77

NPV = 13149.42

PBP = 2YEARS, 2MONTHS

IRR = 41%
 Rc WORKING ASSUMPTIONS:

1. It is assumed that the life of project is five years.

2. It is assumed that the salvage value is equal to its book value.

3. Working capital margin: It is assumed that the w.c.m will be recovered on its
Book value.

4. written down method: It is assumed that the dep reciation will be charged as
written down value method throughout the life of project.

5. It is assume that there will be no tax liability.

6. WCM will be maintaining equivalent to next six months operating expenses.

7. The number of working days in a year will be 300.

8. Assumed that the revenue will increase by 15% every year.

9. The price will be based on prevailing market rates.

10. All the revenue expenses will be charged at prevailing market rates.

11. The expenses will increase by 5-7%.

12. It is assume that the depreciation will be charged at 20% every year.
 Rc MARKET ANALYSIS:
TARGET CUSTOMER:

For business point of view my target customer will be the track drivers, tourist
buses, young and college going students, family who loves t o have food outside,
and the local people.

SERVICE PROVIDED BY US:

My hotel cum restaurant provides all type of services related to its target
customer. We generally believe that the customer should satisfied by our
services. We will be providing the food facility(lunch and dinner), refreshment
facility(tea and coffee),service of car or any other vehicle parking and many
more things.

MARKET PLACE:

For the businessmen point of view you should open your shop where there is no
competitor. I have chosen the location for my business is lucknow -kanpur
highway. In the project study I came to know that the hotels are there in this
way but they do not work as restaurant. They are simple and they do not target
the high range of people. Simple track drivers are their potential customers. I
have introduced my business in the concept of dhaba cum restaurant. Kanpur
and Lucknow is the biggest city of U.P. and this highway is very much in use. I
am going for long run establishment so this location can provide me good
revenue and profitability.
a) Archaeological monuments: The location does not have any archa eological
monuments in nearby 5km radius.

b) Biological resources: It was found during study period that the location is
devoid of any endangered flora and
fauna in 5km radius.

c) Cultural Monuments: This unit does not have any cultura l monuments within
the area of 5 km radius.

e) Employment Generation: This unit will generate the employment in the

immediate surroundings of the local people.
f) Geography: The location is geographically suitable for hotel and restaurant
and the project will not be disturbed by climatic and other geographical
condition.

k) Sensitive area: The location does not have any sensitive area.
l) Power: The power would be sourced from State Electricity Board from near
by sub station.
c
Parking Area
Parking is the important issue for any business. I will be providing the parking
area for any kind of vehicle. The customer will not have to worry about their
important assets. There will not be any charge for parking.
 Rc FINANCIAL ANALYSIS
ùc WORKING CAPITAL MARGIN

SL.NO PERTICULERS NUMBERS SALARY TOTAL

1.c MANAGER 1 7000 7000

2.c HEAD COOK 1 5000 5000
3.c COOK HELPER 3 2500 7500
4.c SERVICE MAN 4 1500 6 000
5.c MASALCHI 3 1000 1000

ùc CASH AT BANK: Rs. 2,00,000

ùcSTOCK: Rs. 2,53,680

Total working capital margin: Rs.6,12,680

 ùc CAPITAL ASSETS:

SL.NO PARTICULERS QUANTITY COST PER TOTAL COST

PIECES
1. RECEPTION 1Table+2Chair 5000 5,000
2. THREE BURNER 1 9000 9,000
BHATTI SET
3. TWO BURNER 1 6000 6,000
BHATTI SET
4. TANDOOR 1 2500 2,500
5. TABLES 8 1100 8,800
6. CHAIRS(PLASTIC) 32 250 8,000
7. CHARPAI 10 700 7,000
8. CROCKERY 75 200 15,000
9. BHAGAUNA 10 500 5,000
10. COOKING 3 1000 3,000
APPLIANCES
11. MIXER GRINDER 1 3100 3,100
12. REFRIGERATOR 2 7000 14,000
13. GLASSESS(FOR 50 4 200
TEA)
TOTAL 86,600
 ùc EXPENSES:

|
c 
|c c | c 
c
|

c KG(UNIT)/LITRES
1 RICE 50 18
2 FLOUR 50 18
3 PULSES 25 60
4 SPICES 10 300
5 SUJII 5 20
6 TEA 5 150
7 MAIDA 30 25
8 SUGAR 35 42
9 GRAM FLOUR 10 45
10 RAJMA 20 40
11 NUTRELA 10 70
12 MUSTARD OIL 30 60
13 REFINED OIL 40 50
14 VANASPATI GHEE 20 40
15 DESI GHEE 10 250
16 POTATO 100 10
17 ONION 50 30
18 EGG 20 75
19 PICKLES 4 40
20 CYLINDER 8 500
21 COAL 75 20
c
|
c
22 VEGETABLES(SEASONAL) «« ««
23 PANEER 20 150
24 MILK 25 16
25 CHICKEN 40 150
26 MUTTON 15 200
27 FISH 10 80

h
c

The monthly expenses = Rs. 42280

So the yearly expenses will be = Rs.42280*12
=Rs. 507360
 ùc REVENUE:

Number of customers visit per day (average) is 75.

Revenue earned from one customer per day (average) is 30.
So the per day revenue earned (average) is 75*30 = 2250 .

Yearly revenue earned (average) is 2250*300 = 675000.

ùc DEPRECIATION SCHEDULE:

YEAR GROSS VALUE DEPRECIATION BOOK VALUE

VALUE
c c c c
1 75900 15180 60720
2 60720 12144 48576
3 48576 9715.2 38860.8
4 38860.8 7772.16 31088.64
5 31088.64 6217.728 24870.912
c
NOTE: I have charged depreciation on the furniture, Three burner bhatti set,
Two burner bhatti set, Fridge and mixer grinder.
 ùc LOAN REPAYMENT SCHUDLE:

c c c
LOAN AMOUNT c
c
c 



c c c
c
c
c
c
c TIME PERIOD c c c c c
c RATE OF INTEREST(P.A)  c c c c c
c c c c c
c c c c c c
EMI 
c
c c c c c c c
c
PERIOD c
OB cINTEREST c
EMI c PRINCIPAL REPAYMENT c
CB c
YRS c MONTHS
12 c INTERE

c c c c  c c c c c
c 



c
 c 
c  
c 


 c c


c
 c
c 


 c
c 
c 



c 


 c
 c c c
c 


 c
c 
c 


c  c c

c
 c

c  c
 c 
c 

 c  c
 c c c
c  c

c 
c 
  c 

c c 

c
 c
c 

c
c 
c 


c    c
 c c c
c    c

c 
c 
   c 
c
c 

c
 c
c 
c

c 
c 


c 

c
 c c c
c 

c c 
c 

 c 
c c c
 c

c 
c 
c 
c 

 
c 
 
c
 c c c
c 
 
c  c 
c 



c 
 c
 c c c
c 
 c c 
c 
 

c  
c
 c c c
c  
c 

c 
c 
  c 
  
c
 c c c

c 
  
c c 
c 


c   c

 c c c
 c   c 
c 
c 


c  
 
c
 c c c
c  
 
c  c 
c 

 c 

  c
 c c c
c 

  c 
c 
c 

c   c
 c c c
c   c 

c 
c 

c 
 c
 c c c
c 
 c  c 
c 

 c  
 
c
 c c c

c  
 
c c 
c  



c 

 
c
c c c
 
c 

 
c c 
c  
 
c  

c
 c c c
c  

c c 
c   c 

 
c
 c c c
c 

 
c c 
c   c 


c
 c c c

c 


c 
c 
c    
c 


c
 c c c
 c 


c 

c 
c  

c 


c
 c c c
c 


c c 
c  
c 

c
 c c c
c 

c c 
c  
 c 

 c
 c c c
c 

 c 

c 
c    c 
 c
 c c c
c 
 c c 
c    c 

c
 c c c

c 

c c 
c   
c 
 c
 c c c
c 
 c  
c 
c  
c 


 c
 c c c
c 


 c  c 
c  
 c   
c
 c c c
c   
c 

c 
c  
c  c
 c c c

c  c c 
c    c  
c
 c c c
 c  
c c 
c 
 
c 
c
 c c c
c 
c c 
c 
 c  c
 c c c
c  c 
c 
c  c  
 
c
 c c c
c  
 
c 
c 
c   c  
c
 c c c
c  
c c 
c   c  
c
 c c c

c  
c c 
c 


c 


c
 c c c

c 


c c 
c 

c 



c
 c c c

c 



c  c 
c   c 
  c
 c c c

c 
  c c 
c   
c 
c
 c c c

c 
c   c 
c 
 c 


c
 c c c

c 


c 
c 

c  
c 

c
 c c c

c 

c 
c 
c 
c 
 c
 c c c

c 
 c c 

c  
c  c
 c c c

c  c 
c 
c 

c   c
 c c c

c   c  c 

c  c  
 c
 c c c

c  
 c 
c 
c 

c  c
c c c
 
c  c c 
c   c 

 c
 c c c
c 

 c c 
c 

c 
 
c
 c c c
c 
 
c c 
c   c 

c
 c c c

c 

c c 
c 
c


c
 c c c
c


c c 
c 
c

 c
 c c c
c

 c
c 
c 
c 
c
 c c c
c 
c


c 
c  
c 
 c
 c c c
c 
 c 
c 
c 
 c 
c
 c c c
c 
c 

c 
c   c  c
 c c c

c  c 
c 
c  c 


c
c c c

c
c
c c c c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
 c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c c
c c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c
c c c c c c c

c c c c c c c
 c c c c c c c
c c c c c c c c
c
c c c c c c c
c ùc MASTER SHEET c c c c c c c

SL.NO PERTICULERS 0 1 2 3 4 5

1 PRELIMANERY AND
PREOPERATING
EXPENSES
2 CAPITAL ASSETS 86600
3 WCM 612680
4 REVENUE 675000 776250 892687.5 1026590.63 1180579.23
5 OPERATING EXP. 507360 532728 559364.4 587332.62 616699.25
EXCLUDING DEP.
6 DEPERICIATION 15180 12144 9715.2 7772.16 6217.728
7 OPERATING PROFIT 152460 231378 343038.3 431485.85 557662.26
{4-(5+6)}

9 EBIT(7+8) 152460 231378 343038.3 431485.85 557662.26

10 INTEREST 49100 40931 31449 20442 7666
11 EBT(9-10) 103360 190447 311589.3 411043.85 549996.26

13 PAT(11-12) 103360 190447 311589.3 411043.85 549996.26

14 SOLVAGE VALUE - - - - 24870.912
15 RECOVERY OF WCM - - - - 612680
16 INITIAL 699280 - - - - -
INVESTMENT(1+2+3)
17 OPERATIONAL 167640 243522 352753.5 439258.01 563879.988
CASH INFLOW
{6+10+13(1-T)}
18 TERMINAL CASH - - - - 637550.912
INFLOW (14+15)
19 PROJECT 699280 167640 243522 352753.5 439258.01 1201430.9
CASHFLOW
(16+17+18)
 Rc PROJECT APPRAISAL

PROJECT CASH FLOW

AVERAGE RATE OF RETURN (ARR) = ----------------------------------* 100
INITIAL INVESTMENT
= 68.77

NET PRESENT VALUE (NPV) = PVIF(r%, 1year)+PVIF(r%, 2year)+---

- INITIAL INVESTMENT
= 13149.42

INTERNAL RATE OF RETURN (IRR) = 41%

PAY BACK PERIOD (PBP) = 2years, 2 months.

 Rc RISK ANALYSIS OF PROPOSED PROJECT:

This project helped a lot to understand the risk analysis related to the
competitor. The competitors are there in the way but their concept is not very
much stronger. They generally targeted the track drivers. They provide the
facility which is not very much accepted by the family and young and students.
As I have targeted my target customers this will be providing the good revenue
and profitability. The customer wants high level of satisfaction. I will be
providing the satisfaction level of customer.
The dhabawala¶s do not provide the parking facility for their customers but I
will be providing the parking facility for my customers. The level of satisfaction
can be increased by this.
The risk from others competitor are less. I can easily establish my busine ss in
purposed location. In an introduction I will be getting something less revenue
but as the awareness will be created the revenue will increase.
Risk from political issues, social issues, environmental issues are not there
because I have gone through with all the formalities.
All types of risk are analysed and it is said that the purposed project are good
and can be established in desired location. This project is fully free with any
type of risk.
CONCLUSION:

In a conclusion part it can be said that this project is feasible from the financial,
marketing and technical point of view. From this project I found that the
business of Restaurant is profitable as well as feasible from all aspect of
business line.
From this purposed project good revenue can be earned and profitability can be
generated. This project is very much profitable in long term.