Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2015

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

This report presents an entrepreneurial study of launching a Mexican theme restaurant in Karachi. The elementary concept comes from the ever growing food and restaurant industry in Pakistan. The presence of many international food chains and restaurants, as well as several renowned local restaurants offering varied cuisines indicate the fact that the restaurant business is thriving on several factors like taste, quality of service, ambiance and there is a great potential for an eatery that brings out the best combo to succeed eventually. As a developing nation, Pakistan has experienced high level of awareness in the people regarding food and its fashionable trends resulting in a huge population liking international cuisines amongst the local menus.

The establishment of food streets in Karachi like Port Grand, Boat Basin, Badar Commercial and others have restaurants offering food that are mostly traditional, Chinese, Italian or fast food but there are not many options when it comes to the spicy Mexican menu. This fact has supported the researcher’s belief in developing a new brand with a unique cuisine and menu which is not common in Karachi. Thus, analyzing the huge potential of a theme based restaurant in Karachi the researcher has developed a feasibility report for launching a Mexican restaurant which will be something new for the food lovers as well as generate a huge potential in the market.

There has been a combination of research methodologies used to formulate this feasibility, first the researcher has conducted quantitative research through market survey questionnaires from the general public to understand people’s expectation.

spending preferences, liking and avoidable elements in restaurants or dining out options. The survey questionnaire \was collected from a sample of 256 respondents and the results portrayed that 95% of sample are interested in trying out something new and if given a chance 93% of the sample would visit a newly establish Mexican restaurant. I In an another question, when asked about the decision making factors for dining out or selecting a restaurant it was found that 51 % put price and 30% put food quality as the first choice while 22% put price and 41% put food quality as second choice and 12% put o price and 10% food quality as their third choice. So, price remains a dominant factor but at the same time food quality also matters a lot. In an another important question the researcher asked about the average preferred spending per head for a decent dining or restaurant experience and the results show that 54% wants to spend between Rs.750 and Rs.1000 while 25% wishes to spend between Rs.1000 and Rs.1250 but 20% of the sample wants to spend below Rs.750.

Secondly the researcher also conducted a qualitative research through personal interviews with real estate agents, interior designers and market people to judge wha;t is required to run a restaurant business in Karachi. The financial aspect in any feasibility report plays immense importance role in making a final decision and it depends on numerous factors such as limited options available, environmental constraints and business running capital requirements. The researcher visited few potential buildings for restaurant, visited the furniture market, explored electronic market for kitchen appliances and looked few crockery and cutlery options, searched for lights and decor items for interior design that was based on Mexican flag colors and traditions. The other important factors included in the feasibility report are manpower requirements, average expenses and capital for daily running of the restaurant.

In the end of this feasibility report a 5 year execution plan is proposed with anticipated income and expenses. The total cost of the project is calculated to be roughly around 6.8 million rupees with rate of return to be 7.3% and annual income projection of 87.6%. The capital amount invested in is expected to payback in about 14 to 15 months. The income and expence values are estimated on average restaurant running and detailed calculations are available in separate sections in actual feasibility report. The options to launch such project can be 100% ownership or percentage of partnership on investment basis. However, in case of loan from financial institute the returns would vary because it will include interest rates and revenue will follow accordingly but the major impact would be on initial capital which would cut down up to 50% of the basic capital investment.

Pages

63

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