Description
Outline concerning a unique business opportunity presented by bodo bolivar.
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A unique business opportunity
Presented by
Bodo Bolivar
Clara Chileana
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Executive Summary
Ceviche is one of Peruvian’s favourite dishes, served cold and made out of a mix of raw fish,
onions, corn, sweet potato and key lime. The latter generates a chemical process which makes
the fish taste like cooked. This chemical process does not kill all bacteria therefore it is
extremely important to eat a ceviche from a trustful source which ensures the fish is clean and
fresh.
Currently in Lima, the capital, ceviche is served in hundreds of cevicherias, which are generally
restaurants specialized in cold and warm seafood. These cevicherias have a traditional business
model, with fully equipped and staffed kitchen and large space for seating customers choosing
from a variety of more than 80 dishes. This complexity is usually translated into a higher price,
and as the price goes down, the cleanliness of the restaurant goes down in a direct relationship.
Currently, a middle-range business person willing to eat a good ceviche at a price within his or
her budget (S/.12 to 15) will not be able to find a place offering it at that price without sacrificing
some cleanliness.
FastCeviche plans to establish a restaurant chain specialized in ceviche offering reasonable
prices and an impeccable environment. The way it will achieve this is through an innovative
business model similar to some fast food models, with a centralized kitchen delivering the cold
ingredients to the restaurants. In this way, economies of scale achieved through the process
efficiency as well as the smaller facilities used as restaurants will enable FastCeviche attend that
market segment currently underserved.
The total investment required for the project is US$75.587 supplied by the shareholders. This
will allow FastCeviche establish itself as a chain with presence in the four main districts in Lima
in a six month time span, opening four restaurants served from one centralized kitchen.
FastCeviche expects to attract on average, 50 customers per day and have by the end of the first
year a positive cash flow and a net income of US$6,364. Under the assumption that the business
only maintains the four restaurants in subsequent years, the net income would be US$48,627
from year two onwards.
The rapid expansion strategy that FastCeviche will adopt to have a first movers advantage, will
rely initially on the investment of the shareholders and later, either on organic growth,
franchising or joint ventures.
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1. Peru
Peru, located in the Pacific Coast of South America, has been showing steady expansion
accumulating a total growth of 22% in five years. The country is expected to continue growing at
an approximate annual rate of 6.5%, higher than most other Latin American countries. In the last
decade, exports have grown from US$7,021 million to US$20,000 million; inflation has been
stable below 3.5% and the local currency Nuevo Sol has appreciated slightly versus the US
dollar.
Politically, Peru has a democratic government and a stable environment, and has managed to
improve its credit risk, to be even better than the average Latin American countries. As a result,
foreign direct investment has increased from 5% in 2003 to 13.9% in 2005.
2. Ceviche
Ceviche is a typical Peruvian dish created in the 16
th
century based on a mixture of cultures
present in this country and it was recently denominated Cultural Heritage of Peru. This dish can
be described as a seafood salad, a mix of either plain raw fish or other types of seafood combined
with very acid key lime, onion, hot pepper, sweet potato and corn. The raw fish goes through a
process called ‘denaturation’ which is the effect of the acid lime on the fish’s proteins, making it
taste more like cooked fish rather than raw J apanese sushi. This process usually takes place
within a few minutes from the time the lime juice makes contact with the fish.
To obtain a good quality ceviche, experts recommend preparing it from fresh fish only, not
previously frozen, to ensure a good texture. When in contact with the lime juice for a long period
(half an hour to an hour), it becomes very rubbery and opaque effect that is usually described as
overcooked, therefore it is imperative to be consumed immediately after preparation.
The chemical process that takes place with the lime kills some bacteria that might be present on
the fish, however it does not kill all of them, therefore it is extremely important for the source of
the fish to be highly reputable and trustworthy to ensure a safe ceviche. This knowledge is shared
among ceviche consumers who give great importance to the restaurant’s hygiene, appearance
and reputation, even more than any other restaurant where dishes are cooked with heat.
3. Cevicheria
In Peru, restaurants serving ceviche are called cevicherias. These types of restaurants usually sell
ceviche and its closest variety called ‘tiradito’ which is based on the same concept with the
difference that the fish is cut thinner and it does not contain onion. Cevicherias also serve other
cold and warm dishes, a variety of desserts and alcoholic and non-alcoholic drinks, however, the
most popular dishes in this type of restaurant are ceviche and tiradito, as demonstrated by
primary research (Appendix 1).
Cevicherias have a business model similar to any other traditional restaurant, including a fully
equipped and staffed kitchen, full table service with waitresses, cashiers and usually an
administrator and a big space for customer seating. These restaurants operate during lunchtime
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only, considering the strong tradition to consume seafood during the day and not so much for
dinner.
Cevicherias, together with Chifa (Chinese Food) and Roasted Chicken are Peruvians’ favourite
dishes. Moreover, Peru has the highest per capita consumption of fish in Latin America, rising to
20 kg per year, while countries such as Mexico or Brazil consume 10.4 and 6.5 kg respectively
(Infopesca – FAO, 2005). As the industry expert and renowned Peruvian Chef puts it, “In the
same way Americans eat sandwiches for lunch, Peruvians eat ceviche” (Acurio, 2006).
Despite people’s preferences for fish and particularly ceviche, only Chifa and Roasted Chicken
restaurants have evolved into a simpler restaurant format and offer delivery services, while
ceviche is still served only in regular restaurants and do not offer delivery.
Cevicherias can be put into four big categories, A, B, C and D. The following table describes the
main differences between these types of cevicherias and a representative picture of each type can
be found in appendix 2.
Type Average Price of
Ceviche
Cleanliness and
Freshness
Number of Dishes
on the Menu
Comments
A S/. 25 or more Trustful 75 High end, fashion
B S/. 19 Good - Acceptable 99 Big, nice
C S/. 15 Almost Acceptable 87 Smaller
D S/. 10 Better not know 60 Informal
Source: Primary research
There are only two chains of this type of restaurant, one of them has four stores and the other one
five. Despite being a chain, each location works as an individual restaurant only sharing the
brand, that is, each location is fully equipped with a kitchen and complete staff. All other
cevicherias are individual restaurants, not chains. A diagram of the business model of traditional
cevicherias can be found in appendix 3.
4. FastCeviche
A good and safe ceviche can only be consumed in regular restaurants. Out of the people
interviewed, all of them business workers, 58% agreed that they eat ceviche less frequently than
they would like to and the main reasons were convenience and price (see appendix 4 for details).
From the same survey, 77% of interviewees said that in order to consume a good ceviche, they
would have to spend more than their regular budget. This information makes the problem clear:
currently, there are very few clean cevicherias offering good ceviche at an affordable price.
The plan is to establish a chain of restaurants specialized in ceviche and tiradito only, with a fast
food concept. The chain will use a similar model as Subway restaurants, having a centralized
kitchen facility which prepares the ingredients and delivers them in special containers to the
restaurants, achieving economies of scale. As ceviche and tiradito can be considered a salad, all
the ingredients (fish, onion, sweet potato, corn, hot pepper) will be ready to mix, right in front of
the customer. A diagram of the business model can be found in appendix 5.
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To keep the business model simple, FastCeviche will only offer two main dishes: ceviche and
tiradito, which are the favourites among the more than 85 dishes regular cevicherias offer. These
two dishes will only be available in a choice of two types of fish (sole fish and fish of the day),
calamari and octopus. This will maintain complexity low and allow some of the costs savings be
transferred to the end customer. Only pop, beer and chicha morada, a traditional Peruvian
beverage, will be served.
The service will be more like a self-serve restaurant, or again, similar to Subway, in which the
customer pays first for the selected dish, and goes through the counter choosing what to add of
each other ingredient, allowing them to influence on the recipe if they want to. The dining area
will be rather small, to convey the idea of fast and not a place where to stay after lunch. The
seats will be like in a bar, with high tables and stools, to convey that idea of short term seating.
The idea of having the ingredients on the counter and mixing the ceviche in the customer’s
presence will serve two purposes. The first one is to convey a sense of cleanliness and freshness.
The customer will be able to see how the fish is replenished every time the container is empty,
how the ingredients all look fresh, how the employee mixes the ingredients with gloves and with
very clean utensils and that the ceviche will not taste like ‘overcooked’ because it is mixed right
before its consumption.
The second purpose is to start educating the customer about potential delivery or to-go services
for ceviche. J ust as the employee mixes the ceviche only when it is going to be consumed, the
customer will start figuring out that they can easily pick it up or ask for it to be delivered in
separate containers for later mixing and eating. After a period of education and paradigm change,
FastCeviche will be able to introduce delivery and take away services to expand its business.
By adopting this business model which enables it to reach economies of scale through the
centralized kitchen and reduced costs due to the simplicity of the menu and small size facility,
FastCeviche will be able to enter the market in a segment currently unattended. It will satisfy the
customer’s need for cleanliness and freshness and charge a reasonable price (S/. 13 for a regular
ceviche, approximately US$4.00) that is currently not available in cevicherias type A, B or C. A
positioning map of FastCeviche can be found in appendix 6.
5. The Customer
The target customer is a ceviche fan, one of those belonging to the 58% of the population
represented in the survey who would love to eat more ceviche but currently can not do it because
of time and budget constraints. The customer will mainly be a business worker, in a position not
so high as to look for a full restaurant service but instead, a middle management level who
usually has lunch in restaurants two or three times a week within a pre-set time window.
The target customer’s spending budget for every day lunch during working days is
approximately S/.12 to S/.15 and has 45 minutes to one hour available for lunch. This customer
will look for a convenient location in order to make better use of his/her free time and is
conscious of the cleanliness required in a ceviche restaurant.
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Another group of target customers is made up of friends and families with similar spending
patterns who would like to have ceviche at home for a change. This customer segment has a huge
potential when the business expands into offering delivery service.
6. Market Analysis
6.1. Market Size
The market will be analyzed from two perspectives, top-down, from the general market to the
specific target market, and bottom-up relying on information from industry experts as well as
FastCeviche’s own capacity.
Top-Down Analysis
Peru has 27.9 million people, out of which 30% belongs to rural areas, reducing the potential
market right from the start to 19.5 million. Most of this population is distributed along the main
regions: Lima, Arequipa, Trujillo, Chiclayo and Piura, out of which Lima has the biggest
population, holding 7.6 million.
In Lima, at least 52% of the population has a socio-demographic status and income which does
not allow them to have lunch at a restaurant as a regular routine. That portion of the population
usually eats from local people delivering food to work or take their own lunch. This reduces the
potential population to 3.65 million.
Main offices and white collar jobs however, are not spread around the region but concentrated in
the province of Lima, the capital, and especially in four main districts: San Isidro, Miraflores,
Santiago de Surco and La Molina. These four districts have a total population of 516,650 people,
out of which 63% (325,391 people) are employed within those same areas (INEI, 2005).
Those four main districts are currently served by a minimum of 375 restaurants and 50
cevicherias (see appendix 7 for more details). These values are underestimated because the
sources are the local municipalities and yellow pages in which not all restaurants are registered.
Additionally, those same districts gather 38 fast food restaurants or 56% of all fast food
restaurants belonging to big chains such as Mc Donald’s and Pizza Hut.
The fast food concept is relatively new in Peru and has developed mainly in Lima. It started in
1988 with Bembos, a Peruvian chain serving hamburgers. It was not until 1993, after Peru
opened its market to foreign investment, that big multinational chains such as Burger King and
Mc Donald’s established restaurants in Lime. Within the fast food segment, three sub categories
share the following market share: pizza 28%, chicken 42% and hamburgers 30% in a market of
approximately US$100 million, a remarkable growth in the 13 years of its existence.
In general, the restaurant industry has been experiencing steady growth as the Peruvian economy
improved in the latest years and consumption increased. The industry is projected to grow at 6%
per year, even higher than the average Gross Domestic Product growth of 4.1% (Camaralima,
2006)
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Concluding, the top down analysis shows that there is a large enough market in Lima (325,000
people) currently served by a reasonable number of restaurants in a fast growing industry and in
which the fast food concept is well accepted.
Bottom-Up Analysis
The analysis of the current market was done by interviewing three restaurant owners of different
types and sizes in Lima and one restaurant manager. The research found that on average,
cevicherias and other restaurants have a daily customer base ranging from 40 to 250 people,
depending on their location, branding, prices and capacity. Narrowing the information down to
smaller sized restaurant like FastCeviche, and considering that cevicherias open daily for lunch,
the average demand is estimated at 1500 customers per month per restaurant.
FastCeviche wants to have a fast turnaround and provide a simplified service. As it will not
provide waitress services, it can only afford a small number of seats to ensure it is kept under
control and costs are still low. It is estimated that on average, a FastCeviche restaurant will have
fifteen seated places.
FastCeviche will open for lunch only, as all other cevicherias, and the operating hours will be
from 11:00 am to 4:00 pm. Considering the type of seating, it can be estimated that a customer
will stay on average half an hour, resulting in a maximum capacity of 150 people per day (15
seats x 2 times occupied in an hour x 5 hours) or 4500 per month. The peak hours are expected to
be between 1:00pm and 2:00pm, when most offices have lunch break.
6.2. Sales forecast
Despite having a maximum capacity of 150 customers per day, the target is to reach on average,
50 customers per day, 33% of the maximum capacity. Weekends are expected to have a lower
demand because most offices do not work on weekends but it is slightly compensated by a higher
demand from friends and family. The distribution of customers throughout the day and the week
is expected to be as follows.
Schedule
Monday Tuesday Wednesday Thursday Friday Saturday Sunday
11:00 AM - 12:00 PM 7 7 7 7 7 4 4
12:00 PM - 1:00 PM 14 14 14 14 14 14 14
1:00 AM - 2:00 PM 20 20 20 20 20 20 20
2:00 AM - 3:00 PM 8 8 8 8 8 8 8
3:00 AM - 4:00 PM 6 6 6 6 6 6 6
Customer per Restaurant 55 55 55 55 55 35 35
Weekends Weekdays
Restaurant
Seasonality might be a factor in this business considering that people like to eat ceviche more
during the summer. Nevertheless, just as seasons are not that extreme in Lima, the demand for
ceviche will not fluctuate dramatically, moving slightly around the 50 customers per day with a
small increase in summer and a small fall during the winter.
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Promotion will be very basic, based on flyers distributed to nearby offices and emailing but
heavily relying on word of mouth. Considering this process takes some time, the expectation is
to start the first month with five customers per day per restaurant, steadily growing with time, up
to the sixth month when the full forecast is reached.
6.3. Pricing
Pricing has been determined by comparing he current prices offered by competing cevicherias
and the contribution margin such price would yield considering FastCeviche’s costs. In order to
simplify the pricing structure, the menu will have six dishes:
Ceviche of Sole Fish
Ceviche of Sole Fish mixed with octopus and calamari
Tiradito of Sole Fish
Ceviche of Fish of the Day
Ceviche of Fish of the Day mixed with octopus and calamari
Tiradito of Fish of the Day
Furthermore, the prices will only be set by type of fish regardless of the dish. That is, Sole fish
dishes will have a price of S/. 20 and dishes with the fish of the day will have a price of S/.13.
With these prices, FastCeviche not only is below the competitor’s price (S/.24 for sole and
S/.14.7 for fish of the day) but still obtains a reasonable contribution margin estimated to be
S/.7.12 on average per dish. Further details are shown in appendix 8.
7. FastCeviche’s Competitive advantage
The business model based on a centralized kitchen and smaller restaurants is the basis of
FastCeviche’s competitive advantage. This model will allow the company to quickly reach
economies of scale from the moment the second restaurant is opened, by sharing the kitchen
facilities, consolidated purchasing practices and a single cooking staff.
The centralized kitchen model outperforms the traditional restaurant model due to several
reasons described as follows.
Detail Current Cevicheria FastCeviche
Waitresses Several None
Seated places Many A few
Kitchen Fully equipped in each restaurant Minimum requirements in each
restaurant and a centralized
kitchen facility
Cook 1 chef per restaurant 1 centralized chef
Varity of dishes offered More than 80 Less than 6
Hot dishes Yes No
Avg customer waiting time Long Short
Visibility of cooking No Yes
Delivery No Yes
In the restaurant business, the highest fixed costs are rent, salaries and depreciation. Spaces have
to be big enough to hold a fully equipped kitchen, readily available to prepare and serve hot and
cold dishes as well as a variety of desserts. Each restaurant will most often have a Chef or a
Chief Cook and several waitresses, assistants and a cashier.
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FastCeviche with its centralized kitchen will incur in those costs only once, for the first
restaurant and then will leverage upon that investment to open the other restaurants, using the
same kitchen resources such as equipment and personnel to serve three, four or even more
restaurants. The smaller restaurants will only have two or three front-line employees and
minimum number of kitchen appliances, minimizing the labour costs, investment and fixed costs.
Comparing the approximate costs of a regular restaurant with FastCeviche, it is interesting to
note that a regular restaurant, using the same prices FastCeviche will offer, would need
approximately 62 customers per day in order to reach its break even point while FastCeviche
needs 23 for every new small restaurant it opens and 48 for the first restaurant which also has the
centralized kitchen.
FastCeviche will enter the market with an expansion strategy aiming to be present at least in the
four most significant districts in Lima in a very short time. The fast expansion will help reinforce
the brand and clearly establish the idea of a chain and with that, all the benefits such as customer
loyalty and consumer confidence on its consistency. This strategy will enable FastCeviche to
position itself as the pioneer in this segment, before new competitors follow the idea.
8. Implementation
Considering a conservative introduction of the restaurant chain, the project will start with only
one restaurant, to test the concept, improve and standardize processes and later expand.
Therefore, instead of implementing a kitchen on one centralized location and another location
with a restaurant, the first location will serve as both, centralized kitchen and end customer
location. This location will serve in the future as the centralized kitchen. All further openings
will have a small format, meaning they will only have a customer area, a serving area and a very
small kitchen.
8.1. Centralized Kitchen
The centralized kitchen requires approximately 28 square metres and the following appliances
4 element stove
Large industrial freezer with two temperatures
Sink
Dishwasher
Following the logical flow of the ingredients, the kitchen will be designed so that ingredients
come out of the fridge, go through the required processes and end up in the fridge or on the
delivery trays to be sent to the restaurants. A layout of the centralized kitchen can be found in
appendix 9.
8.2. Small format restaurants
The restaurants can be divided in three main areas: the customer area, the serving area and the
small kitchen.
8.2.1. The customer area
The customer area will need a space of approximately 30 square metres in which there will be
high tables with stools. The idea of having this type of seating places is to encourage customers
to leave once they finish eating.
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8.2.2. The serving area
The serving area is the area around the counter where the employee will prepare the ceviche. It
will have a working table to receive the ingredients coming from the kitchen and a refrigerated
counter facing the customer with all the ingredients. The counter will also have a cash register
and behind it a beverage dispenser.
8.2.3. The small kitchen
At the back of the restaurant, there will be a small kitchen only equipped with a regular size
refrigerator and a sink. Ingredients for the day will be stored in the fridge and some other
ingredients not requiring refrigeration such as salt or pepper will be stored in cabinets.
The whole restaurant will have very simple and minimal decoration to convey the idea of a clean
environment. Countertops and tables will be white as well as walls to demonstrate that things are
kept impeccable. A drawing of the layout for the restaurants is shown in appendix 10.
9. Operations
9.1. Sourcing and Operations
The sourcing of all ingredients will be done in a centralized manner for the whole restaurant
chain to achieve volume discounts when applicable and share inventories to reduce carrying
costs. Most suppliers offer delivery services so ingredients and other supplies will be delivered to
the centralized kitchen in different frequencies will be delivered every morning while ingredients
such as salt can be replenished less frequently.
Some of the ingredients need prior cooking before being mixed with the raw fish and lime. For
example, sweet potatoes are placed on the dish, part as decoration but also as a component of the
dish. The sweet potato is served cold on the dish however it needs to be cooked, peeled and cut
before serving. A similar situation occurs with the corn.
Other ingredients that require prior processing are the octopus and calamari which have to be
quickly passed through boiling water for a few minutes because the effect of lime on them is not
the same as with fish. Some other ingredients such as the onion and hot pepper do not require
prior cooking however they require cleaning and cutting in a specific way before being
introduced to the ceviche.
All these operations will take place in the centralized kitchen and the output will be all the
ingredients in small containers ready to be placed on the counter top to be mixed and served as
ceviche. The only operation to take place at the restaurants is squeezing the lime. The reason for
this is because the lime juice changes taste with time therefore it needs to be freshly squeezed.
9.2. Staffing
The staffing requirements for the centralized kitchen were calculated by analyzing the operations
taking place there. Most restaurants have professional Chefs working on new recipies and
designing new menus, however, considering this restaurant will only serve one type of dish and
it will be standardized, there is no need for a Chef but only a cook.
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The cook will be in charge of the careful cutting of the fish in the appropriate manner and
advising the employees at the restaurants about the best way to prepare a ceviche. An assistant
cook would be responsible for cutting, grinding or boiling other ingredients.
The cook’s detailed responsibilities include:
Define the recipes and establish the portions of each dish
Supervise the cooking operations
Manage the assistants
Cut the fish
The assistant’s responsibilities include:
Receive supplies when delivered
Select ingredients to be used during the day
Cut and prepare ingredients
Boil ingredients
Clean and wash dishes, pans and bowls
Receive empty containers from restaurants and store them
Control inventory of ingredients and filled containers
Receive orders from restaurants and select required inventory to deliver
Give the delivery person the required ingredients
At the beginning, with only one restaurant operating, two people (a cook and an assistant) can
handle the operations as shown in appendix 11. An additional assistant cook will be added with
expansion.
The employees working at the restaurants (counterpersons) do not need to have an extensive
cooking background because the learning curve for mixing the ingredients for ceviche is fast.
The personal trait required for this position is more on the personality side. The employee must
be polite, entrepreneurial enough so that she/he shows excitement for the new venture and should
have a very high understanding of the importance of customer service and hygiene. Employees
will always use the uniform provided by FastCeviche, caps and gloves to maintain a high
standard of cleanliness.
Each restaurant will be staffed with two counterpersons who will have the following
responsibilities:
Open and get the restaurant ready
Receive daily supplies and store them properly
Set up the counter with required ingredients and replenish when necessary
Greet the customers, bill them, collect cash
Serve the dishes and beverages
Cut and squeeze the limes
Pick up any dirty dishes left on tables
Clean tables, floors, dishes and empty containers
Control local inventory and ask for replenishment when necessary
The number of counterpersons has been determined as two for several reasons. The most
important one is the volume of customers expected on each restaurant and the capacity of each
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counterperson to serve them. Another reason is to make is more difficult for the employees at the
restaurant dealing with the money collected to take some or all of it.
To oversee the operations of the kitchen and the restaurants, FastCeviche will hire a manager
who will be in charge of supervising the operations. The roles of this manager include:
Supervise operations in the centralized kitchen and restaurants
Pay salaries
Supervise proper inventory controls
Oversee proper cash management in restaurants
Negotiate with large suppliers
Set basis for outsourced delivery service of ingredients to restaurants
9.3. Organizational Culture
The organizational culture will be based on trust, fostering openness among peers and
information sharing at all levels, not only at an operational level to ensure process improvement
and benchmarking, but also regarding the business itself, in order to ensure that the employees
know how the company is doing and where it is heading.
Hygiene will be the company’s mandate, to the extent that not even profitability should
jeopardize it. The hiring process will look for candidates who have that value well entrenched
already, as it is something very difficult to learn or acquire. FastCeviche will offer its employees
training regarding cleaning best practices and the manager will be in charge of bringing latest
news about the topic every week to reinforce it.
Customer Service will be FastCeviche’s second most important value. The employees must
understand very well that the customer is always right, and should always do their best to serve
the customer well. The only acceptable case of not giving priority to a customer would be if
doing so puts health or hygiene at risk.
9.4. Milestones
The project will go through three main phases including the following activities.
Phase Time Activities Milestone
1 3 months Raise funds and strengthen the
leadership team
Legally set up the company
Find and rent the location
Renovations and permits
Hire manager, cook, assistant cook
and 2 counterpersons
Train staff
First Restaurant opens to public
2 2 months Look for three potential locations
Evaluate the acceptance of the
concept
Concept proved to be viable,
decision to expand is made
3 2 months Raise additional capital
Rent three locations
Three new restaurants open to
public
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Renovations
Hire additional assistant cook and 6
counterpersons
Train staff
10. Management Team
Clara Chileana: has five years of experience in different industries specializing in Supply
Chain, Process Improvement and Project Management. Her experience in the food industry at
Nestle and at the cosmetics industry have contributed to build in her background a strong focus
on health and hygiene, bringing best practices and examples of common pitfalls in the large
industries. Moreover, her experience in supply chain will help structure the processes and
procedures for FastCeviche.
Bodo Bolivar: Bodo brings to the team more than eight years of finance experience in a large
bank in Peru as well as the entrepreneurial spirit. Knowing the financial tools available in Peru
and how to use them appropriately, Bodo will provide financial support to the team as well as
overlook the overall business.
Elicia Ecuadori: Elicia is a young entrepreneur specialized in the food industry. She has a
bachelor’s degree in hospitality services administration and more than six years of experience in
the catering business. She is the link to the industry providing know-how about the business,
suppliers and the network.
The current team will be expanded to include in the board of directors other young
entrepreneurial business people who are not linked to the industry, in order to bring fresh and
unbiased opinion to the running of this venture, as well as a larger network to spread the word
about the new chain and attract more customers faster.
11. Financials
11.1. Investment
In order to set up the first restaurant, FastCeviche will incur in several costs in terms of
equipment, renovations, cookware, cleaning and safety supplies, personal supplies for employees
and legal fees. Moreover, there will be additional expenses such as the monthly rent of the
restaurant while renovations take place, salaries to be paid to employees while they receive
training, and other smaller expenses. The total investment for setting up FastCeviche with the
first restaurant and the full kitchen is estimated to be US$24,857. Subsequent openings of the
smaller restaurants will require an investment of $20,400. The details about the start-up costs can
be found in appendix 12.
As the milestones indicate, FastCeviche expects to invest in three more restaurants after two
months. At that point in time, an additional contribution of capital of US$50,730 is required in
order to proceed with the renovations, set ups and working capital to start the operations.
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The total investment required, rising to $75,587 will be raised from the current shareholders,
friends and family. Considering the affordable investment and the relatively quick return, no
need for external funding is foreseen.
11.2. Variable Costs
In order to calculate the cost of each dish (six in total) and beverages (three types only), the team
used the individual recipes and researched about the ingredients costs. A strong focus was given
on obtaining an accurate price for the fish considering it makes between 50% and 86% of the
total cost of the dishes.
FastCeviche will serve the food using non-disposable plates and cutlery. Only the glasses will be
disposable, therefore its cost is included in the calculation of the individual cost of the beverage.
An item that was also considered as part of any dish is a pair of disposable gloves which will be
used by the counterperson to prepare every entree and disposed of after finishing. The detailed
cost analysis of the dishes and beverages can be found in appendix 13.
11.3. Fixed Costs
The first restaurant will have the centralized kitchen annexed to it; therefore its fixed costs will
be higher than any other restaurant to be opened in the future. This larger format including the
regular restaurant area and the centralized kitchen will assume the cost of the two to three person
kitchen staff and the manager, representing the highest fixed cost of all. The total fixed cost of
this first restaurant including the centralized kitchen will be US$ 3,560 per month.
The smaller format restaurants to be opened in phase two will incur in lower fixed costs due to
the reduced renting space required, only two counterpersons on each location and sharing the
cost of the manager, adding up to US$ 1,700.
11.4. Break even point
The first restaurant will need 48 people to reach its break even while a small format will require
only 22. This big difference is due to the fact that the first restaurant will have the centralized
kitchen and all the fixed costs that the smaller formats do not incur in. Detailed information
about the fixed costs and break even points can be found in appendix 14.
Economies of scale are achieved when the number of small format restaurants starts increasing,
reaching an optimum at three small restaurants and the restaurant with the centralized kitchen. At
this point the break even point is 31 customers per restaurant on average.
After opening the four restaurants (three small format and the one with centralized kitchen),
costs do not decline linearly any further because it is necessary to hire a new manager to handle
the new restaurants and hire more assistant cooks in order to handle the extra volume more
restaurants signify. However, some economies of scale can still be achieved.
11.5. Income Statement
The pro forma income statement for FastCeviche indicates that for first semester of the first year
of operations the result will be a negative net income. The reason for this is the high upfront
costs required to set up the first restaurant, and the sales ramping up slowly from a very
13
conservative estimate of five customers per day during the first month, to finally reach the break
even point for the four restaurants in month seven.
The net income for year one is estimated to be US$ 6,364. For the following year, under the
scenario than no new investments are done and FastCeviche remains with the four restaurants
opened until that time, the net income for year two rises to US$48,627 (see appendix 15).
11.6. Sensitivity Analysis
Among the more than 170 variables involved in the calculations of the profitability of this
business, five of them are the most important ones and therefore used to simulate scenarios in
order to understand the sensitivity of the income to variations on these items.
Labour costs represent almost 38% of fixed costs. The sensitivity analysis determined that
FastCeviche remains profitable even if salaries have to be adjusted 170% above the current
estimate. The probability of any adjustment to be required is not that high considering that
FastCeviche will be paying salaries higher than the industry average. For example, the
counterperson will earn S/. 660 per month while on average in this sector, a person occupying
that same position would earn S/. 594 (Programa de Estadisticas y Estudios Laborales, 2006).
Another variable analyzed to understand its sensitivity to variations was rent which represents
32.7% of fixed costs. This variable also has the possibility to be 200% higher and FastCeviche
would still remain profitable.
For variable costs, the most important cost is the cost of the fish. Although the price of fish can
rise up to 70% without having negative effects on FastCevche, it can be assumed that any
significant increase in the price of fish would drive other restaurants serving ceviche to raise
their prices and FastCeviche being able to follow in the adjustment, and therefore the increased
cost would be absorbed by the higher price.
Regarding revenues, the number of customers per day proved to be the most sensitive variable.
The current target is 50 customers per day; however the analysis shows that below 30 customers
per day the business would not be able to cover its fixed costs. In terms of pricing, FastCeviche
can afford lowering prices up to 25% lower. Complete information about the sensitivity analysis
can be found in appendix 16.
11.7. Statement of Cash Flows
The statement of cash flows found in appendix 17 shows that in the sixth month, FastCeviche
reaches its lowest point in terms of cash flow and the highest investment and starts recovering as
it achieves a positive cash flow from that point onwards. A graphic representation of the cash
flow is shown in appendix 18.
12. Expansion plans and exit strategy
As mentioned in the milestones section, phase one will serve as a concept validation.
FastCeviche will allow the first two or three months to verify if the concept is accepted and if the
projections are going to be as expected. If things do not go as well as expected, FastCeviche
should decide to close at the most after the fourth month.
14
Closing would entail liquidating all the assets. The calculation of the rescue value has taken into
consideration that certain investments such as the ones for renovations will not be possible to
recover, while others such as kitchen equipment might be sold at 30% of its value. This
liquidation would yield a terminal value of US$4,975; therefore the shareholders would have to
assume a loss of US$19,883.
In case things go as expected, expands into four restaurants and there is still potential to further
expand, FastCeviche can choose among several options. Expansion can be done organically or
with investment from the shareholders considering that opening additional restaurants do not
require too large an investment (US$ 20,500).
Another alternative for expansion is to use franchises. In Peru, franchising is fairly new however
the most common business currently using the franchise model is restaurants. The local law does
not have any restrictions in terms of a minimum period of existence for the business to start
franchising; therefore, this could be a possibility even in the short term, once the processes are
clearly defined and improved (Camara Peruana de Franquicias, 2006).
Another option for expansion is to set up an agreement or joint venture with a larger restaurant or
other party in this industry. This option might require diluting some of the equity however; the
expansion could be much faster than in the other cases.
Although the management team has thought about these alternatives, the focus will be on
establishing the first restaurant and aiming to achieve the expected results to continue with the
expansion plans.
15
Appendices
Appendix 1: Primary Research – Consumer preferences in a Cevicheria
0
10
20
30
40
50
60
70
80
Tiradito Ceviches J aleas Fried Seefood Seafood Rice
%
16
Appendix 2: Types of Cevicherias
Type A Type B
Type C Type D
Appendix 3: Business Model of a traditional chain of Cevicherias
Food Suppliers Kitchen Restaurant Customers
Food Suppliers Kitchen Restaurant Customers
17
Appendix 4: Primary Research – Frequency for visiting a Cevicheria
9. Usted va a comer a una cevicheria (you go to a cevicheria)
Mas seguido de lo que le gustaría (more frequently than I would like to) 14%
Tan seguido como le gusta (As frequent as I would like) 29%
Menos seguido de lo que le gustaría (less frequently than I would like) 57%
Total 100%
Source: Primary research
Appendix 5: FastCeviche Business Model
Food Suppliers Kitchen Restaurant
Restaurant
Restaurant
Customers
Customers
Customers
Delivery
18
Appendix 6: Positioning Map of FastCeviche vs. Cevicherias Type A, B, C, D
Appendix 7: Restaurants in the four main districts
Source: Yellow Pages and Local Municipalities
Price of ceviche
Very Clean & Fresh
Not as Clean & Fresh
S/.25 S/.19 S/.15 S/.10
50
18
10
14
8
Cevicherias
38
12
10
12
4
Fast
Food
375 TOTAL
156 Miraflores
101 San Isidro
83 Surco
35 La Molina
Restaurants District
50
18
10
14
8
Cevicherias
38
12
10
12
4
Fast
Food
375 TOTAL
156 Miraflores
101 San Isidro
83 Surco
35 La Molina
Restaurants District
19
Fish Dish Name Prices Type A Type B Type C Type D
Ceviche Tradicional S/. 20.00 S/. 32.00 S/. 26.33 S/. 24.13 N/A
Ceviche Mixto S/. 20.00 S/. 32.00 S/. 26.33 S/. 24.13 N/A
Tiradito al Aji Amarillo S/. 20.00 S/. 32.00 S/. 26.33 S/. 24.13 N/A
Ceviche Tradicional S/. 13.00 S/. 25.00 S/. 19.00 S/. 14.71 S/. 10.00
Ceviche Mixto S/. 13.00 S/. 25.00 S/. 19.00 S/. 15.63 S/. 10.00
Tiradito al Aji Amarillo S/. 13.00 S/. 25.00 S/. 19.00 S/. 15.90 S/. 10.00
Competitors Average Price List Fast Ceviche Menu Price List
Sole Fish
Fish of the
Day
Fish Dish Name Prices Price less Tax Sale % Weighted Price Weighted Cost Contribution Margin
Ceviche Tradicional S/. 20.00 S/. 16.81 13.3% S/. 2.24 S/. 1.14 S/. 8.24
Ceviche Mixto S/. 20.00 S/. 16.81 13.3% S/. 2.24 S/. 0.92 S/. 9.90
Tiradito al Aji Amarillo S/. 20.00 S/. 16.81 13.3% S/. 2.24 S/. 1.15 S/. 8.22
Ceviche Tradicional S/. 13.00 S/. 10.92 20.0% S/. 2.18 S/. 1.00 S/. 5.93
Ceviche Mixto S/. 13.00 S/. 10.92 20.0% S/. 2.18 S/. 0.95 S/. 6.17
Tiradito al Aji Amarillo S/. 13.00 S/. 10.92 20.0% S/. 2.18 S/. 1.00 S/. 5.91
100.0% S/. 13.28 S/. 6.16 S/. 7.12
Drinks Dish Name Prices Price less Tax Sale % Weighted Price Weighted Cost Contribution Margin
Regular Pop S/. 2.00 S/. 1.68 30% S/. 0.50 S/. 0.32 S/. 0.61
Diet Pop S/. 2.00 S/. 1.68 20% S/. 0.34 S/. 0.24 S/. 0.47
Beer S/. 4.00 S/. 3.36 20% S/. 0.67 S/. 0.36 S/. 1.55
Chicha Morada S/. 1.50 S/. 1.26 30% S/. 0.38 S/. 0.16 S/. 0.74
100.0% S/. 1.89 S/. 1.08 S/. 0.81
Average Contribution Margin Per Customer S/. 15.17 S/. 7.24 S/. 7.92
Food Sales's Mix
Drink Sales's Mix
Drinks
Lenguado
Daily Fish
Appendix 8: Price Comparison
20
Appendix 9: Centralized Kitchen
Cold / Raw area
Warm / cooked area
Working table
Pans
Ingredients
21
Appendix 10: Restaurant Layout
Serving
Area
Small
Kitchen
Customer Area
Serving
Area
Small
Kitchen
Customer Area
22
Cut lettuce Boil octopus Cut octopus Store octopus
Peal SP Cut SP Store SP
Boil Calamari Cut Calamari Store Calamari
Cut corn Store corn
Cut apples
Cut quince
Cut pineapple
Cut cilantro Store Cilantro
Cut Hot Peppers Store Hot Peppers
Cut Yellow Peppers Store Y Peppers
Grind garlic Store Garlic
Store Onions
Fry Andean Corn Store Corn
Store Fish
Hour 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0
Slice Fish
C
h
e
c
k
i
n
v
e
n
t
o
r
y
&
P
r
e
p
a
r
e
f
o
r
D
e
l
i
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e
r
y
C
o
o
k
R
e
c
e
i
v
e
s
u
p
p
l
i
e
s
D
e
l
i
v
e
r
y
t
o
r
e
s
t
a
u
r
a
n
t
s
Boil Sweet Potato (SP)
Boil corn
Boil Chicha Morada Store Chicha
A
s
s
i
s
t
a
n
t
C
o
o
k
Cut Onions
Appendix 11: Operations Schedule at Centralized Kitchen
23
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Materials 1 $4,000 800 $ 0 760 $ 3,200 $
Stools 15 $600 200 $ 180 114 $ 600 $
Tables 2 $400 100 $ 0 76 $ 400 $
Total $5,000 $1,100 $180
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Industrial Refrigerator Indumey 1.50 X 0.60 X 0.90 (0.81 m3) 1 $1,900 633 $ 950 361 $ - $
Refrigerated Counter 1.50 x0.60 x0.90 (0.9 m2) 1 $1,650 550 $ 825 314 $ 1,650 $
Stainless steel sink 1 $490 163 $ 245 93 $ 490 $
Shelves 1 $400 133 $ 200 76 $ 400 $
Working table 1.20 X 0.60 X 0.90 (0.72 m2) 1 $390 130 $ 195 74 $ 390 $
4 element stove - gas 1 $300 120 $ 150 57 $ - $
Pans 4 $150 100 $ 0 29 $ - $
Blender 1 $90 60 $ 45 17 $ - $
Gas containers 2 $78 31 $ 0 15 $ - $
15kg scale 1 $40 27 $ 20 8 $ - $
Stainless steel strainers 2 $38 38 $ 0 7 $ - $
Knives 4 $23 23 $ 0 4 $ 23 $
Spoons 4 $10 10 $ 0 2 $ 10 $
Container for Chicha 2 $9 9 $ 0 2 $ - $
Can opener 2 $6 6 $ 0 1 $ - $
Cutting board 2 $5 5 $ 0 1 $ - $
Plastic strainers 2 $2 2 $ 0 0 $ - $
Total $5,581 $2,041 $2,630
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Plates 45 $70 70 $ 35.2 13 $ 70 $
Beer Glasses 15 $30 30 $ 15.0 6 $ 30 $
Tuppers 10 $19 19 $ 9.4 4 $ 19 $
Forks &Knives 48 $15 15 $ 7.5 3 $ 15 $
Spoons 15 $5 5 $ 2.3 1 $ 5 $
Lime squeezer 3 $5 5 $ 2.3 1 $ 5 $
Total $143 $143 $72
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Trash Can 1 $14 14 $ 7.0 3 $ 14 $
Cleaning soap 1 $9 36 $ 4.5 2 $ 9 $
75lt trash bags 4 $9 9 $ 4.4 2 $ 9 $
Clorox 1 $7 28 $ 3.5 1 $ 7 $
Towels 4 $6 25 $ 3.1 1 $ 6 $
Small trash can 1 $5 5 $ 2.3 1 $ 5 $
Windowcleaner 1 $5 19 $ 2.3 1 $ 5 $
Sponges 1 $4 17 $ 2.1 1 $ 4 $
Boxes to store vegetables 1 $4 15 $ 1.9 1 $ 4 $
Cleaning cloths 2 $3 13 $ 1.6 1 $ 3 $
Plastic wrap 2 $3 11 $ 1.4 1 $ 3 $
Bucket 1 $2 2 $ 1.1 0 $ 2 $
Industrial Paper towel 1 $2 9 $ 1.1 0 $ 2 $
Detergent 1 $2 6 $ 0.8 0 $ 2 $
Broom 1 $1 4 $ 0.5 0 $ 1 $
Napkins 1 $1 2 $ 0.3 0 $ 1 $
Total $76 $214 $38
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Counter 1 $3,500 1,167 $ 1400.0 665 $ 3,500 $
Containers of Policarbonate for counter (medium) 39 $1,560 1,040 $ 312.0 296 $ 1,560 $
Cash Register Machine 1 $400 160 $ 240.0 76 $ 400 $
Containers of Policarbonate for counter (small) 9 $135 135 $ 27.0 26 $ 135 $
AluminuimBow22 cmor 3 litres 45 $0 - $ 0.0 - $ - $
Total $5,674 $2,728 $2,018 0
- $
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Uniforms (only top) 10 $31 31 $ 18.8 6 $ 31 $
Cabs or Chef Hat 10 $16 16 $ 9.4 3 $ 16 $
Gloves 2 $8 8 $ 4.5 1 $ 8 $
Cleaning Gloves 1 $7 7 $ 4.1 1 $ 7 $
Total $61 $61 $37 11.6375
- $
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Legal Issues - Permits 1 $500 100 $ 0.0 95 $ 100 $
Office Expenses 1 $50 20 $ 0.0 10 $ - $
Total $550 $120 $0 0
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Rent deposit per month 2 $1,632 - $ 0 310 $ 1,224 $
Initial Working Capital Supplies 1 $625 - $ 0 119 $ 625 $
Montlhy Salary 2 $3,150 - $ 0 3,150 $
Manteinance 1 $98 - $ 0 19 $ 73 $
Other 1 $1,488 - $ 0 283 $ 1,488 $
Total $6,994 $0 $0
Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Grand Total $24,857 $6,607 $4,975 $4,121 $20,400
Renovations
Start Up - Investment
Kitchen Equipment
Cookware
Legal Fees
Other current expenses
Cleaning and Safety supplies
Restaurant Equipment
Personal Supplies
Appendix 12: Investment
24
Appendix 13: Dish cost analysis
Concept Retail Price Quantity Serving Size Units Cost %
Sole "Lenguado" S/. 44.00 1000 200 grms S/. 8.80 86.3%
Total Main Ingredients S/. 8.80 86.3%
Onion S/. 1.09 4 0.25 unit S/. 0.07 0.7%
Hot Pepper "Limo" Red S/. 9.60 20 0.13 unit S/. 0.06 0.6%
Hot Pepper "Limo" Yellow S/. 9.60 20 0.13 unit S/. 0.06 0.6%
Key Limes S/. 2.30 25 4.00 units S/. 0.37 3.6%
Salt S/. 0.80 1000 5.00 grms S/. 0.00 0.0%
Cilantro S/. 0.45 1 0.10 unit S/. 0.05 0.4%
MSG Seasoning "Ajinomoto" S/. 10.20 1000 5.00 grms S/. 0.05 0.5%
Total Other Ingredients S/. 0.66 6.4%
Corn S/. 1.00 1 0.33 units S/. 0.33 3.2%
Sweet Potato S/. 1.29 4 0.50 units S/. 0.16 1.6%
Lettuce S/. 0.89 1 0.10 units S/. 0.09 0.9%
Andean Fried Corn S/. 3.00 1000 20.00 grms S/. 0.06 0.6%
Total Other Food S/. 0.64 6.3%
Napkins S/. 1.90 1000 2 units S/. 0.004 0.0%
Disposable Gloves S/. 6.96 150 2 units S/. 0.09 0.9%
Total Cleaning Supplies S/. 0.10 0.9%
Total Variable Cost S/. 10.19 100.0%
Dish Picture
Dish Cost Analysis
Dish Name: Classic Ceviche with Sole Fish "Lenguado"
25
Appendix 13: Dish Cost Analysis
Concept Retail Price Quantity Serving Size Units Cost %
Fish of the Day S/. 22.73 1000 200 grms S/. 4.55 76.2%
Total Main Ingredients S/. 4.55 76.2%
Sugar S/. 2.79 1000 26.70 grms S/. 0.07 1.2%
Yellow Hot Pepper S/. 1.85 20 1.30 unit S/. 0.12 2.0%
Vinager S/. 2.55 500 8.30 ml S/. 0.04 0.7%
Key Limes S/. 2.30 15 2.00 units S/. 0.31 5.1%
Salt S/. 0.80 1000 5.00 grms S/. 0.00 0.1%
Cilantro S/. 0.45 1 0.10 unit S/. 0.05 0.8%
Oil S/. 4.50 1000 2.66 ml S/. 0.01 0.2%
Total Other Ingredients S/. 0.60 10.1%
Corn S/. 1.00 1 0.50 units S/. 0.50 8.4%
Sweet Potato S/. 1.29 4 0.50 units S/. 0.16 2.7%
Andean Fried Corn S/. 3.00 1000 20.00 grms S/. 0.06 1.0%
Total Other Food S/. 0.72 12.1%
Otros 0.0%
Napkins S/. 1.90 1000 2 units S/. 0.004 0.1%
Disposable Gloves S/. 6.96 150 2 units S/. 0.09 1.6%
Total Cleaning Supplies S/. 0.10 1.6%
Total Variable Cost S/. 5.97 100.0%
Dish Cost Analysis
Dish Name: Tiradito With Fish Of The Day Of Yellow Hot Pepper Sauce
Dish Picture
26
Appendix 13: Dish Cost Analysis
Concept Retail Price Quantity Serving Size Units Cost %
Coca Cola / Inka Cola / Sprite 500 ml S/. 15.00 12 1 unit S/. 1.25 97.8%
Disposable Glass (7 ounce - 200 ml) S/. 27.60 1,000 1 unit S/. 0.03 2.2%
Total Cost S/. 1.28 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Coca Cola / Inka Cola / Sprite (light) S/. 17.00 12 1 unit S/. 1.42 98.1%
Disposable Glass (7 ounce - 200 ml) S/. 27.60 1,000 1 unit S/. 0.03 1.9%
Total Cost S/. 1.44 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Bottle 355 ml S/. 12.90 6 1 unit S/. 2.15 100.0%
Total Cost S/. 2.15 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Coca Cola / Inka Cola / Sprite S/. 5.20 3,000 350 unit S/. 0.61 88.6%
Disposable Glass (12 ounce -350 ml) S/. 77.81 1,000 1 unit S/. 0.08 11.4%
Total Cost S/. 0.68 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Purple Corn S/. 1.95 1000 50 grms S/. 0.10 15.7%
Water S/. 0.00 1000 4 liters S/. 0.00 0.0%
Dry Cherry "Guindas" S/. 8.75 20 0.1 units S/. 0.04 7.0%
Key Limes S/. 2.30 15 0.5 Units S/. 0.08 12.3%
Peelings fromApples S/. 3.45 5 0.15 Units S/. 0.10 16.6%
Membrillo S/. 2.90 5 0.15 Units S/. 0.09 14.0%
Steak of Cinnamon S/. 40.00 100 0.15 Units S/. 0.06 9.6%
Peelings fromPineapple S/. 0.80 100 0.15 Units S/. 0.00 0.2%
Sugar S/. 2.79 1000 12.5 grms S/. 0.03 5.6%
Whole Cloves S/. 40.00 1000 1 grms S/. 0.04 6.4%
Disposable Glass (12 ounce -350 ml) S/. 77.81 1,000 1 unit S/. 0.08 12.5%
Total Cost S/. 0.62 100.0%
Drink - Chicha Morada
Regular Drinks
Light Drinks
Beer
Regular Drinks (3 litres bottles)
Drinks Cost Analysis
27
Appendix 13: Dish Cost Analysis
# Unit Product Price
1 Unit Corn S/. 1.00
1 kg Red Onio S/. 1.09
500 ml Vinager S/. 2.55
1 unit Lettuce S/. 0.89
1 dozen Coca Cola / Inka Kola S/. 15.00
1 dozen Coca Cola / Inka Kola Light S/. 17.00
6 units Beer Bottle 355 ml S/. 12.90
3 litres Coca Cola S/. 5.20
1 kg Purple Corn S/. 1.95
1 kg Sweet Potate S/. 1.29
1 unit Cilantro S/. 0.45
1 unit Celery S/. 0.40
1 kg Hot Pepper "Limo" Yellow S/. 9.60
1 kg Hot Pepper "Limo" Red S/. 9.60
1 kg Yellow Hot Pepper S/. 1.85
1 kg Rocoto S/. 0.30
1 kg o manojo Garlic S/. 4.60
1 kg Key Limes S/. 2.30
1 kg Andean Fried Corn S/. 3.00
1 kg Tomatto S/. 2.10
1 kg Apples S/. 3.45
1 kg Pineapples S/. 0.80
1 kg Membrillo S/. 2.90
1 kg Salt S/. 0.80
1 kg Pepper S/. 40.00
1 500 ml MSG Seasoning "Ajinomoto" S/. 10.20
1 kg Steak of Cinnamon S/. 40.00
1 kg Whole Cloves S/. 40.00
1 kg Sugar S/. 3.15
200 grms aprox Anis S/. 2.00
1 Litres Milk S/. 2.25
6 Cans Evaporated Milk S/. 11.00
1 Litres Oil S/. 4.50
1000 grms Fish "Lenguado" S/. 22.00
1000 grms Fish "Lengueta" S/. 12.50
1000 grms Fish "Corvina" S/. 25.00
1000 grms Fish "Perico" S/. 9.00
1000 grms Fish "Mero" S/. 12.50
1000 grms Fish "Robalo" S/. 25.00
1000 grms Fish "Toyo" S/. 15.00
1000 grms Fish "Cojinova" S/. 20.00
1000 grms Octopus S/. 12.00
1000 grms Calamari S/. 7.00
15 units Green Sponge 3M S/. 13.50
1 unit Plastic Wrap Film12¨x 30 mts. S/. 4.40
1 unit Plastic Wrap Film12¨x 1500 mts. S/. 101.00
1 unit Plastic Wrap Film15¨x 1500 mts. S/. 129.03
8 meters AluminiumPaper X 8 MTS. S/. 4.20
150 units Disposable Gloves (plastic) S/. 6.96
100 units Disposable Gloves (better quality) S/. 13.50
1 unit Broom S/. 25.00
1 unit Bucket 5 litres S/. 10.00
1 unit Fire Extinguisher 1 litres S/. 150.00
Sea Products
Cleaning Products
Suppl i es Li st
28
Appendix 14: Fixed cost analysis and break even point
Small Format Large Format Competitors
Gas S/. 100 S/. 100
Electricity S/. 90 S/. 99 S/. 99
Water S/. 0 S/. 0 S/. 0
Telephone S/. 90 S/. 90 S/. 90
Total Utilities S/. 180 S/. 289 S/. 289
Square Metres 55.60 74.2 110
Rent S/. 1,957 S/. 2,612 S/. 3,872
Maintenance fee S/. 235 S/. 313 S/. 465
Total S/. 2,192 S/. 2,925 S/. 4,337
Advertising S/. 100 S/. 100
Repair & Maintenance S/. 50 S/. 100 S/. 100
Miscellaneous S/. 50 S/. 100 S/. 100
Transportation
Insurance S/. 75 S/. 150 S/. 150
Bank Fees S/. 20 S/. 20
Office Expenses S/. 35 S/. 70 S/. 70
Professional Fee - Accountant S/. 300 S/. 300
Depreciation S/. 1,357 S/. 1,762 S/. 1,762
Total S/. 1,567 S/. 2,502 S/. 2,502
Cook S/. 960 960
Assistant Cook S/. 660 1980
Counterperson S/. 1,320 S/. 1,320 S/. 1,980
Restaurant & Kitchen Manager S/. 2,760 S/. 2,760
Total S/. 1,320 S/. 5,700 S/. 7,680
Grand Total S/. 5,259 S/. 11,416 S/. 14,808
Daily Breakeven Point (Customers/Rest) 22 48 62
Fixed Costs (S/.)
29
Appendix 15: Income Statement
Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales S/. 2,275 S/. 6,825 S/. 11,375 S/. 15,925 S/. 27,299 S/. 43,224 S/. 56,874 S/. 70,524 S/. 84,173 S/. 90,998 S/. 90,998 S/. 90,998
Cost of Sales S/. 1,086 S/. 3,259 S/. 5,432 S/. 7,605 S/. 13,037 S/. 20,642 S/. 27,160 S/. 33,678 S/. 40,197 S/. 43,456 S/. 43,456 S/. 43,456
Gross Margin S/. 0 S/. 1,189 S/. 3,566 S/. 5,943 S/. 8,320 S/. 14,263 S/. 22,583 S/. 29,714 S/. 36,845 S/. 43,977 S/. 47,542 S/. 47,542 S/. 47,542
Direct Labor
Cook S/. 240 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960
Cook Assistant S/. 165 S/. 660 S/. 660 S/. 660 S/. 660 S/. 660 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320
Cashier / Waitress S/. 165 S/. 660 S/. 660 S/. 660 S/. 1,320 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940
Total Labor Costs S/. 570 S/. 2,280 S/. 2,280 S/. 2,280 S/. 2,940 S/. 7,560 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220
Other Expenses
Rent & Maintenance S/. 2,925 S/. 2,925 S/. 2,925 S/. 2,925 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501
Utilities S/. 145 S/. 289 S/. 289 S/. 289 S/. 650 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723
Advertising S/. 1,000 S/. 0 S/. 0 S/. 0 S/. 1,000 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100
Repair & Maintenance S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250
Miscellaneous S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250
Transportation S/. 0 S/. 0 S/. 0 S/. 0 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510
Insurance S/. 150 S/. 150 S/. 150 S/. 150 S/. 150 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375
Bank Fees S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20
Office Expenses S/. 210 S/. 70 S/. 70 S/. 70 S/. 70 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175
Professional Fee - Accountant S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300
Manager S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760
Depreciation S/. 1,762 S/. 1,762 S/. 1,762 S/. 1,762 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834
Total Administrative Expensive S/. 7,690 S/. 8,476 S/. 8,476 S/. 8,476 S/. 16,413 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798
Operating Margin -S/. 8,260 -S/. 9,568 -S/. 7,191 -S/. 4,813 -S/. 11,033 -S/. 14,095 -S/. 6,435 S/. 696 S/. 7,828 S/. 14,959 S/. 18,525 S/. 18,525 S/. 18,525
Profit Before Taxes -S/. 8,260 -S/. 9,568 -S/. 7,191 -S/. 4,813 -S/. 11,033 -S/. 14,095 -S/. 6,435 S/. 696 S/. 7,828 S/. 14,959 S/. 18,525 S/. 18,525 S/. 18,525
Accumulated Profits -S/. 8,260 -S/. 17,827 -S/. 25,018 -S/. 29,831 -S/. 40,865 -S/. 54,960 -S/. 61,395 -S/. 60,698 -S/. 52,871 -S/. 37,912 -S/. 19,387 -S/. 862 S/. 17,662
Corporate Tax (30%) S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 5,557
Net Income Peruvian Soles -S/. 8,260 -S/. 9,568 -S/. 7,191 -S/. 4,813 -S/. 11,033 -S/. 14,095 -S/. 6,435 S/. 696 S/. 7,828 S/. 14,959 S/. 18,525 S/. 18,525 S/. 12,967
Net Income US$ -$2,581 -$2,990 -$2,247 -$1,504 -$3,448 -$4,405 -$2,011 $218 $2,446 $4,675 $5,789 $5,789 $4,052
Fast Ceviche
Income Statement Forecast (First Year - S/.)
30
Year 1 Year 2 Year 3 Year 4 Year 5
Sales S/. 591,489 S/. 1,091,980 S/. 1,091,980 S/. 1,091,980 S/. 1,091,980
Cost of Sales S/. 282,464 S/. 521,472 S/. 521,472 S/. 521,472 S/. 521,472
Gross Margin S/. 309,025 S/. 570,508 S/. 570,508 S/. 570,508 S/. 570,508
S/. 0 S/. 0 S/. 0 S/. 0
Direct Labor S/. 0 S/. 0 S/. 0 S/. 0
Cook S/. 11,520 S/. 11,520 S/. 11,520 S/. 11,520 S/. 11,520
Cook Assistant S/. 12,540 S/. 15,840 S/. 15,840 S/. 15,840 S/. 15,840
Cashier / Waitress S/. 50,820 S/. 71,280 S/. 71,280 S/. 71,280 S/. 71,280
Total Labor Costs S/. 74,880 S/. 98,640 S/. 98,640 S/. 98,640 S/. 98,640
S/. 0 S/. 0 S/. 0 S/. 0
Other Expenses S/. 0 S/. 0 S/. 0 S/. 0
Rent & Maintenance S/. 94,286 S/. 114,014 S/. 114,014 S/. 114,014 S/. 114,014
Utilities S/. 7,297 S/. 8,670 S/. 8,670 S/. 8,670 S/. 8,670
Advertising S/. 1,800 S/. 1,200 S/. 1,200 S/. 1,200 S/. 1,200
Repair & Maintenance S/. 2,400 S/. 3,000 S/. 3,000 S/. 3,000 S/. 3,000
Miscellaneous S/. 2,400 S/. 3,000 S/. 3,000 S/. 3,000 S/. 3,000
Transportation S/. 4,080 S/. 6,120 S/. 6,120 S/. 6,120 S/. 6,120
Insurance S/. 3,600 S/. 4,500 S/. 4,500 S/. 4,500 S/. 4,500
Bank Fees S/. 240 S/. 240 S/. 240 S/. 240 S/. 240
Office Expenses S/. 1,680 S/. 2,100 S/. 2,100 S/. 2,100 S/. 2,100
Professional Fee - Accountant S/. 3,600 S/. 3,600 S/. 3,600 S/. 3,600 S/. 3,600
Manager S/. 33,120 S/. 33,120 S/. 33,120 S/. 33,120 S/. 33,120
Depreciation S/. 53,719 S/. 70,008 S/. 70,008 S/. 70,008 S/. 70,008
Total Administrative Expensive S/. 208,223 S/. 249,572 S/. 249,572 S/. 249,572 S/. 249,572
Operating Margin S/. 25,922 S/. 222,296 S/. 222,296 S/. 222,296 S/. 222,296
Profit Before Taxes S/. 25,922 S/. 222,296 S/. 222,296 S/. 222,296 S/. 222,296
Accumulated Profits
Corporate Tax S/. 5,557 S/. 66,689 S/. 66,689 S/. 66,689 S/. 66,689
Net Income Peruvian Soles S/. 20,365 S/. 155,607 S/. 155,607 S/. 155,607 S/. 155,607
Net Income US$ $6,364 $48,627 $48,627 $48,627 $48,627
Fast Ceviche
Income Statement Forecast
31
Appendix 16: Sensitivity Analysis (Peruvian S/.)
% Breakeven Net Profits Rent M2 Breakeven Net Profits % Breakeven Net Profits
-30% 27.1 183,277 # 5 25.1 199,140 # -30% 26.0 224,391
-25% 27.6 178,665 6 26.0 191,885 -25% 26.7 212,927
-20% 28.2 174,054 7 26.9 184,629 -20% 27.4 201,463
-15% 28.8 169,442 8 27.8 177,374 -15% 28.1 189,999
-10% 29.4 164,831 9 28.7 170,118 -10% 28.9 178,535
-5% 29.9 160,219 10 29.6 162,863 -5% 29.7 167,071
0% 30.5 155,607 11 30.5 155,607 0% 30.5 155,607
5% 31.1 150,996 12 31.4 148,352 5% 31.4 144,143
10% 31.7 146,384 13 32.3 141,096 10% 32.4 132,679
15% 32.2 141,773 14 33.2 133,841 15% 33.4 121,215
20% 32.8 137,161 15 34.2 126,586 20% 34.5 109,751
25% 33.4 132,549 16 35.1 119,330 25% 35.6 98,287
30% 34.0 127,938 17 36.0 112,075 30% 36.9 86,824
100% 42.1 63,375 33 50.5 5,732 - 70% 51.0 6,983 -
Labour Analysis Rent Cost Analysis
37.8% of the Fixed Cost 32.7% of the fixed cost 75% of the Variable Cost
Fish Cost Analysis
% # Profits % Breakeven Net Profits
-40% 30 5,907 - -25% 59 -50,699
-30% 35 35,801 -20% 49 2,730
-20% 40 75,736 -15% 43 40,949
-10% 45 115,672 -10% 38 79,169
0% 50 155,607 -5% 34 117,388
10% 55 195,543 0% 31 155,607
20% 60 235,478 5% 28 193,827
30% 65 275,414 10% 26 232,046
40% 70 315,350 15% 24 270,265
50% 75 355,285 20% 22 308,484
60% 80 395,221 25% 21 346,704
200% 150 954,319 30% 19 384,923
Average Price S/. 15.2 Goal: 50 Customers per Day
Number of Customers Price Change
32
Appendix 17: Statement of Cash Flows
Concept Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Operating Activities
Profit Before Taxes 8,260 - 9,568 - 7,191 - 4,813 - 11,033 - 14,095 - 6,435 - 696 7,828 14,959 18,525 18,525 18,525
Depreciation - 1,762 1,762 1,762 1,762 5,834 5,834 5,834 5,834 5,834 5,834 5,834 5,834
Income Taxes Payable - - - - - - - - - - - 5,557 -
Net Cash Provided by operations 8,260 - 7,806 - 5,429 - 3,051 - 9,272 - 8,261 - 601 - 6,530 13,662 20,793 24,359 24,359 18,801
Investment Activities
Initial Renovation Improvements 18,240 - 42,682 -
Machines 18,319 - 42,866 -
Furniture 18,156 - 42,485 -
Legal, other miscellaneous costs 2,198 - 5,144 -
Net cash used in investing activities 56,913 - - - - 133,177 - - - - - - - - -
Financing Activities
Shareholder 79,543 97,919 65,279
Short TermBank Loan
Long TermBank Loan
Net Cash used in financing activities 79,543 - - 97,919 65,279 - - - - - - - -
Increase or decrease in cash 14,370 7,806 - 5,429 - 94,867 77,169 - 8,261 - 601 - 6,530 13,662 20,793 24,359 24,359 18,801
Cash at the beginning of the year 14,370 14,370 6,565 1,136 96,003 18,834 10,573 9,972 16,502 30,164 50,957 75,315 99,674
Cash at the end of the period S/. 14,370 6,565 1,136 96,003 18,834 10,573 9,972 16,502 30,164 50,957 75,315 99,674 118,475
Cash at the end of the period US$ $4,491 $2,051 $355 $30,001 $5,886 $3,304 $3,116 $5,157 $9,426 $15,924 $23,536 $31,148 $37,024
Fast Ceviche
Statement of Cashflow Forecast (S/.)
33
Appendix 18: Cash flow Graph (US$)
4,491
3,116
37,024
30,001
-20,367
-72,740
-100,000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
0 1 2 3 4 5 6 7 8 9 10 11 12
Month
US $
Real cash flow Zero Investment
34
References
Acurio, G. "Who Needs Clubs When Everyone Is at the Cafe?" (The New York Times, 2006,
April 16)
Camara Peruana de Franquicias. (2006). Conceptos Basicos. Retrieved Nov. 2, 2006, fromhttp://www.cpfranquicias.com/index.php
Cavenecia, Mariano. Owner Los Cavenecia Personal Interview 15 Nov 2006
COCIM. (2000). Estudio de Mercado sobre Franquicias en el Perú. Retrieved Nov. 15, 2006,
fromhttp://www.icex.es/servicios/documentacion/documentoselaborados/icex/pdfs/PERUESTUDI
O%20FRANQUICIAS.pdf
Ferreyros, Gianinna. Manager Restuarnat Club La Planicie. Personal Interview 15 Oct 2006
Giurfa, Pablo. Owner Cevicheria Corio. Personal Interview 10 Nov 2006
INEI - Instituto Nacional de Estadistica e Informatica. (2005). Banco de Informacion Distrital.
Retrieved Nov. 5, 2006, fromhttp://www.inei.gob.pe/
Infopesca - FAO. (2005). Presente y futuro de los mercados de pescado y productos pesqueros
de la pesca a pequeña escala. Retrieved Nov. 15, 2006, fromhttp://www.infopesca.org/publicaciones_libre_acceso/Latin_American_Artisanal_Fisheries_a
nd_their_Markets_Esp.pdf
Programa de Estadisticas y Estudios Laborales. "Boletin de Estadisticas Ocupacionales - Sector
Restaurantes y Hoteles." Ministerio Del Trabajo Y Promocion Del Empleo, J une 2006,
Proinversion. (2006). Fundamentos de la Economía Peruana. Retrieved Nov. 15, 2006, fromhttp://www.proinversion.gob.pe/pqinvertir/razones/cont_1.htm
Zuniga, Gian Carlo. Owner Restaurant Dama Juana. Personal interview. 8 Nov. 2006.
doc_548172824.pdf
Outline concerning a unique business opportunity presented by bodo bolivar.
i
A unique business opportunity
Presented by
Bodo Bolivar
Clara Chileana
ii
Executive Summary
Ceviche is one of Peruvian’s favourite dishes, served cold and made out of a mix of raw fish,
onions, corn, sweet potato and key lime. The latter generates a chemical process which makes
the fish taste like cooked. This chemical process does not kill all bacteria therefore it is
extremely important to eat a ceviche from a trustful source which ensures the fish is clean and
fresh.
Currently in Lima, the capital, ceviche is served in hundreds of cevicherias, which are generally
restaurants specialized in cold and warm seafood. These cevicherias have a traditional business
model, with fully equipped and staffed kitchen and large space for seating customers choosing
from a variety of more than 80 dishes. This complexity is usually translated into a higher price,
and as the price goes down, the cleanliness of the restaurant goes down in a direct relationship.
Currently, a middle-range business person willing to eat a good ceviche at a price within his or
her budget (S/.12 to 15) will not be able to find a place offering it at that price without sacrificing
some cleanliness.
FastCeviche plans to establish a restaurant chain specialized in ceviche offering reasonable
prices and an impeccable environment. The way it will achieve this is through an innovative
business model similar to some fast food models, with a centralized kitchen delivering the cold
ingredients to the restaurants. In this way, economies of scale achieved through the process
efficiency as well as the smaller facilities used as restaurants will enable FastCeviche attend that
market segment currently underserved.
The total investment required for the project is US$75.587 supplied by the shareholders. This
will allow FastCeviche establish itself as a chain with presence in the four main districts in Lima
in a six month time span, opening four restaurants served from one centralized kitchen.
FastCeviche expects to attract on average, 50 customers per day and have by the end of the first
year a positive cash flow and a net income of US$6,364. Under the assumption that the business
only maintains the four restaurants in subsequent years, the net income would be US$48,627
from year two onwards.
The rapid expansion strategy that FastCeviche will adopt to have a first movers advantage, will
rely initially on the investment of the shareholders and later, either on organic growth,
franchising or joint ventures.
1
1. Peru
Peru, located in the Pacific Coast of South America, has been showing steady expansion
accumulating a total growth of 22% in five years. The country is expected to continue growing at
an approximate annual rate of 6.5%, higher than most other Latin American countries. In the last
decade, exports have grown from US$7,021 million to US$20,000 million; inflation has been
stable below 3.5% and the local currency Nuevo Sol has appreciated slightly versus the US
dollar.
Politically, Peru has a democratic government and a stable environment, and has managed to
improve its credit risk, to be even better than the average Latin American countries. As a result,
foreign direct investment has increased from 5% in 2003 to 13.9% in 2005.
2. Ceviche
Ceviche is a typical Peruvian dish created in the 16
th
century based on a mixture of cultures
present in this country and it was recently denominated Cultural Heritage of Peru. This dish can
be described as a seafood salad, a mix of either plain raw fish or other types of seafood combined
with very acid key lime, onion, hot pepper, sweet potato and corn. The raw fish goes through a
process called ‘denaturation’ which is the effect of the acid lime on the fish’s proteins, making it
taste more like cooked fish rather than raw J apanese sushi. This process usually takes place
within a few minutes from the time the lime juice makes contact with the fish.
To obtain a good quality ceviche, experts recommend preparing it from fresh fish only, not
previously frozen, to ensure a good texture. When in contact with the lime juice for a long period
(half an hour to an hour), it becomes very rubbery and opaque effect that is usually described as
overcooked, therefore it is imperative to be consumed immediately after preparation.
The chemical process that takes place with the lime kills some bacteria that might be present on
the fish, however it does not kill all of them, therefore it is extremely important for the source of
the fish to be highly reputable and trustworthy to ensure a safe ceviche. This knowledge is shared
among ceviche consumers who give great importance to the restaurant’s hygiene, appearance
and reputation, even more than any other restaurant where dishes are cooked with heat.
3. Cevicheria
In Peru, restaurants serving ceviche are called cevicherias. These types of restaurants usually sell
ceviche and its closest variety called ‘tiradito’ which is based on the same concept with the
difference that the fish is cut thinner and it does not contain onion. Cevicherias also serve other
cold and warm dishes, a variety of desserts and alcoholic and non-alcoholic drinks, however, the
most popular dishes in this type of restaurant are ceviche and tiradito, as demonstrated by
primary research (Appendix 1).
Cevicherias have a business model similar to any other traditional restaurant, including a fully
equipped and staffed kitchen, full table service with waitresses, cashiers and usually an
administrator and a big space for customer seating. These restaurants operate during lunchtime
2
only, considering the strong tradition to consume seafood during the day and not so much for
dinner.
Cevicherias, together with Chifa (Chinese Food) and Roasted Chicken are Peruvians’ favourite
dishes. Moreover, Peru has the highest per capita consumption of fish in Latin America, rising to
20 kg per year, while countries such as Mexico or Brazil consume 10.4 and 6.5 kg respectively
(Infopesca – FAO, 2005). As the industry expert and renowned Peruvian Chef puts it, “In the
same way Americans eat sandwiches for lunch, Peruvians eat ceviche” (Acurio, 2006).
Despite people’s preferences for fish and particularly ceviche, only Chifa and Roasted Chicken
restaurants have evolved into a simpler restaurant format and offer delivery services, while
ceviche is still served only in regular restaurants and do not offer delivery.
Cevicherias can be put into four big categories, A, B, C and D. The following table describes the
main differences between these types of cevicherias and a representative picture of each type can
be found in appendix 2.
Type Average Price of
Ceviche
Cleanliness and
Freshness
Number of Dishes
on the Menu
Comments
A S/. 25 or more Trustful 75 High end, fashion
B S/. 19 Good - Acceptable 99 Big, nice
C S/. 15 Almost Acceptable 87 Smaller
D S/. 10 Better not know 60 Informal
Source: Primary research
There are only two chains of this type of restaurant, one of them has four stores and the other one
five. Despite being a chain, each location works as an individual restaurant only sharing the
brand, that is, each location is fully equipped with a kitchen and complete staff. All other
cevicherias are individual restaurants, not chains. A diagram of the business model of traditional
cevicherias can be found in appendix 3.
4. FastCeviche
A good and safe ceviche can only be consumed in regular restaurants. Out of the people
interviewed, all of them business workers, 58% agreed that they eat ceviche less frequently than
they would like to and the main reasons were convenience and price (see appendix 4 for details).
From the same survey, 77% of interviewees said that in order to consume a good ceviche, they
would have to spend more than their regular budget. This information makes the problem clear:
currently, there are very few clean cevicherias offering good ceviche at an affordable price.
The plan is to establish a chain of restaurants specialized in ceviche and tiradito only, with a fast
food concept. The chain will use a similar model as Subway restaurants, having a centralized
kitchen facility which prepares the ingredients and delivers them in special containers to the
restaurants, achieving economies of scale. As ceviche and tiradito can be considered a salad, all
the ingredients (fish, onion, sweet potato, corn, hot pepper) will be ready to mix, right in front of
the customer. A diagram of the business model can be found in appendix 5.
3
To keep the business model simple, FastCeviche will only offer two main dishes: ceviche and
tiradito, which are the favourites among the more than 85 dishes regular cevicherias offer. These
two dishes will only be available in a choice of two types of fish (sole fish and fish of the day),
calamari and octopus. This will maintain complexity low and allow some of the costs savings be
transferred to the end customer. Only pop, beer and chicha morada, a traditional Peruvian
beverage, will be served.
The service will be more like a self-serve restaurant, or again, similar to Subway, in which the
customer pays first for the selected dish, and goes through the counter choosing what to add of
each other ingredient, allowing them to influence on the recipe if they want to. The dining area
will be rather small, to convey the idea of fast and not a place where to stay after lunch. The
seats will be like in a bar, with high tables and stools, to convey that idea of short term seating.
The idea of having the ingredients on the counter and mixing the ceviche in the customer’s
presence will serve two purposes. The first one is to convey a sense of cleanliness and freshness.
The customer will be able to see how the fish is replenished every time the container is empty,
how the ingredients all look fresh, how the employee mixes the ingredients with gloves and with
very clean utensils and that the ceviche will not taste like ‘overcooked’ because it is mixed right
before its consumption.
The second purpose is to start educating the customer about potential delivery or to-go services
for ceviche. J ust as the employee mixes the ceviche only when it is going to be consumed, the
customer will start figuring out that they can easily pick it up or ask for it to be delivered in
separate containers for later mixing and eating. After a period of education and paradigm change,
FastCeviche will be able to introduce delivery and take away services to expand its business.
By adopting this business model which enables it to reach economies of scale through the
centralized kitchen and reduced costs due to the simplicity of the menu and small size facility,
FastCeviche will be able to enter the market in a segment currently unattended. It will satisfy the
customer’s need for cleanliness and freshness and charge a reasonable price (S/. 13 for a regular
ceviche, approximately US$4.00) that is currently not available in cevicherias type A, B or C. A
positioning map of FastCeviche can be found in appendix 6.
5. The Customer
The target customer is a ceviche fan, one of those belonging to the 58% of the population
represented in the survey who would love to eat more ceviche but currently can not do it because
of time and budget constraints. The customer will mainly be a business worker, in a position not
so high as to look for a full restaurant service but instead, a middle management level who
usually has lunch in restaurants two or three times a week within a pre-set time window.
The target customer’s spending budget for every day lunch during working days is
approximately S/.12 to S/.15 and has 45 minutes to one hour available for lunch. This customer
will look for a convenient location in order to make better use of his/her free time and is
conscious of the cleanliness required in a ceviche restaurant.
4
Another group of target customers is made up of friends and families with similar spending
patterns who would like to have ceviche at home for a change. This customer segment has a huge
potential when the business expands into offering delivery service.
6. Market Analysis
6.1. Market Size
The market will be analyzed from two perspectives, top-down, from the general market to the
specific target market, and bottom-up relying on information from industry experts as well as
FastCeviche’s own capacity.
Top-Down Analysis
Peru has 27.9 million people, out of which 30% belongs to rural areas, reducing the potential
market right from the start to 19.5 million. Most of this population is distributed along the main
regions: Lima, Arequipa, Trujillo, Chiclayo and Piura, out of which Lima has the biggest
population, holding 7.6 million.
In Lima, at least 52% of the population has a socio-demographic status and income which does
not allow them to have lunch at a restaurant as a regular routine. That portion of the population
usually eats from local people delivering food to work or take their own lunch. This reduces the
potential population to 3.65 million.
Main offices and white collar jobs however, are not spread around the region but concentrated in
the province of Lima, the capital, and especially in four main districts: San Isidro, Miraflores,
Santiago de Surco and La Molina. These four districts have a total population of 516,650 people,
out of which 63% (325,391 people) are employed within those same areas (INEI, 2005).
Those four main districts are currently served by a minimum of 375 restaurants and 50
cevicherias (see appendix 7 for more details). These values are underestimated because the
sources are the local municipalities and yellow pages in which not all restaurants are registered.
Additionally, those same districts gather 38 fast food restaurants or 56% of all fast food
restaurants belonging to big chains such as Mc Donald’s and Pizza Hut.
The fast food concept is relatively new in Peru and has developed mainly in Lima. It started in
1988 with Bembos, a Peruvian chain serving hamburgers. It was not until 1993, after Peru
opened its market to foreign investment, that big multinational chains such as Burger King and
Mc Donald’s established restaurants in Lime. Within the fast food segment, three sub categories
share the following market share: pizza 28%, chicken 42% and hamburgers 30% in a market of
approximately US$100 million, a remarkable growth in the 13 years of its existence.
In general, the restaurant industry has been experiencing steady growth as the Peruvian economy
improved in the latest years and consumption increased. The industry is projected to grow at 6%
per year, even higher than the average Gross Domestic Product growth of 4.1% (Camaralima,
2006)
5
Concluding, the top down analysis shows that there is a large enough market in Lima (325,000
people) currently served by a reasonable number of restaurants in a fast growing industry and in
which the fast food concept is well accepted.
Bottom-Up Analysis
The analysis of the current market was done by interviewing three restaurant owners of different
types and sizes in Lima and one restaurant manager. The research found that on average,
cevicherias and other restaurants have a daily customer base ranging from 40 to 250 people,
depending on their location, branding, prices and capacity. Narrowing the information down to
smaller sized restaurant like FastCeviche, and considering that cevicherias open daily for lunch,
the average demand is estimated at 1500 customers per month per restaurant.
FastCeviche wants to have a fast turnaround and provide a simplified service. As it will not
provide waitress services, it can only afford a small number of seats to ensure it is kept under
control and costs are still low. It is estimated that on average, a FastCeviche restaurant will have
fifteen seated places.
FastCeviche will open for lunch only, as all other cevicherias, and the operating hours will be
from 11:00 am to 4:00 pm. Considering the type of seating, it can be estimated that a customer
will stay on average half an hour, resulting in a maximum capacity of 150 people per day (15
seats x 2 times occupied in an hour x 5 hours) or 4500 per month. The peak hours are expected to
be between 1:00pm and 2:00pm, when most offices have lunch break.
6.2. Sales forecast
Despite having a maximum capacity of 150 customers per day, the target is to reach on average,
50 customers per day, 33% of the maximum capacity. Weekends are expected to have a lower
demand because most offices do not work on weekends but it is slightly compensated by a higher
demand from friends and family. The distribution of customers throughout the day and the week
is expected to be as follows.
Schedule
Monday Tuesday Wednesday Thursday Friday Saturday Sunday
11:00 AM - 12:00 PM 7 7 7 7 7 4 4
12:00 PM - 1:00 PM 14 14 14 14 14 14 14
1:00 AM - 2:00 PM 20 20 20 20 20 20 20
2:00 AM - 3:00 PM 8 8 8 8 8 8 8
3:00 AM - 4:00 PM 6 6 6 6 6 6 6
Customer per Restaurant 55 55 55 55 55 35 35
Weekends Weekdays
Restaurant
Seasonality might be a factor in this business considering that people like to eat ceviche more
during the summer. Nevertheless, just as seasons are not that extreme in Lima, the demand for
ceviche will not fluctuate dramatically, moving slightly around the 50 customers per day with a
small increase in summer and a small fall during the winter.
6
Promotion will be very basic, based on flyers distributed to nearby offices and emailing but
heavily relying on word of mouth. Considering this process takes some time, the expectation is
to start the first month with five customers per day per restaurant, steadily growing with time, up
to the sixth month when the full forecast is reached.
6.3. Pricing
Pricing has been determined by comparing he current prices offered by competing cevicherias
and the contribution margin such price would yield considering FastCeviche’s costs. In order to
simplify the pricing structure, the menu will have six dishes:
Ceviche of Sole Fish
Ceviche of Sole Fish mixed with octopus and calamari
Tiradito of Sole Fish
Ceviche of Fish of the Day
Ceviche of Fish of the Day mixed with octopus and calamari
Tiradito of Fish of the Day
Furthermore, the prices will only be set by type of fish regardless of the dish. That is, Sole fish
dishes will have a price of S/. 20 and dishes with the fish of the day will have a price of S/.13.
With these prices, FastCeviche not only is below the competitor’s price (S/.24 for sole and
S/.14.7 for fish of the day) but still obtains a reasonable contribution margin estimated to be
S/.7.12 on average per dish. Further details are shown in appendix 8.
7. FastCeviche’s Competitive advantage
The business model based on a centralized kitchen and smaller restaurants is the basis of
FastCeviche’s competitive advantage. This model will allow the company to quickly reach
economies of scale from the moment the second restaurant is opened, by sharing the kitchen
facilities, consolidated purchasing practices and a single cooking staff.
The centralized kitchen model outperforms the traditional restaurant model due to several
reasons described as follows.
Detail Current Cevicheria FastCeviche
Waitresses Several None
Seated places Many A few
Kitchen Fully equipped in each restaurant Minimum requirements in each
restaurant and a centralized
kitchen facility
Cook 1 chef per restaurant 1 centralized chef
Varity of dishes offered More than 80 Less than 6
Hot dishes Yes No
Avg customer waiting time Long Short
Visibility of cooking No Yes
Delivery No Yes
In the restaurant business, the highest fixed costs are rent, salaries and depreciation. Spaces have
to be big enough to hold a fully equipped kitchen, readily available to prepare and serve hot and
cold dishes as well as a variety of desserts. Each restaurant will most often have a Chef or a
Chief Cook and several waitresses, assistants and a cashier.
7
FastCeviche with its centralized kitchen will incur in those costs only once, for the first
restaurant and then will leverage upon that investment to open the other restaurants, using the
same kitchen resources such as equipment and personnel to serve three, four or even more
restaurants. The smaller restaurants will only have two or three front-line employees and
minimum number of kitchen appliances, minimizing the labour costs, investment and fixed costs.
Comparing the approximate costs of a regular restaurant with FastCeviche, it is interesting to
note that a regular restaurant, using the same prices FastCeviche will offer, would need
approximately 62 customers per day in order to reach its break even point while FastCeviche
needs 23 for every new small restaurant it opens and 48 for the first restaurant which also has the
centralized kitchen.
FastCeviche will enter the market with an expansion strategy aiming to be present at least in the
four most significant districts in Lima in a very short time. The fast expansion will help reinforce
the brand and clearly establish the idea of a chain and with that, all the benefits such as customer
loyalty and consumer confidence on its consistency. This strategy will enable FastCeviche to
position itself as the pioneer in this segment, before new competitors follow the idea.
8. Implementation
Considering a conservative introduction of the restaurant chain, the project will start with only
one restaurant, to test the concept, improve and standardize processes and later expand.
Therefore, instead of implementing a kitchen on one centralized location and another location
with a restaurant, the first location will serve as both, centralized kitchen and end customer
location. This location will serve in the future as the centralized kitchen. All further openings
will have a small format, meaning they will only have a customer area, a serving area and a very
small kitchen.
8.1. Centralized Kitchen
The centralized kitchen requires approximately 28 square metres and the following appliances
4 element stove
Large industrial freezer with two temperatures
Sink
Dishwasher
Following the logical flow of the ingredients, the kitchen will be designed so that ingredients
come out of the fridge, go through the required processes and end up in the fridge or on the
delivery trays to be sent to the restaurants. A layout of the centralized kitchen can be found in
appendix 9.
8.2. Small format restaurants
The restaurants can be divided in three main areas: the customer area, the serving area and the
small kitchen.
8.2.1. The customer area
The customer area will need a space of approximately 30 square metres in which there will be
high tables with stools. The idea of having this type of seating places is to encourage customers
to leave once they finish eating.
8
8.2.2. The serving area
The serving area is the area around the counter where the employee will prepare the ceviche. It
will have a working table to receive the ingredients coming from the kitchen and a refrigerated
counter facing the customer with all the ingredients. The counter will also have a cash register
and behind it a beverage dispenser.
8.2.3. The small kitchen
At the back of the restaurant, there will be a small kitchen only equipped with a regular size
refrigerator and a sink. Ingredients for the day will be stored in the fridge and some other
ingredients not requiring refrigeration such as salt or pepper will be stored in cabinets.
The whole restaurant will have very simple and minimal decoration to convey the idea of a clean
environment. Countertops and tables will be white as well as walls to demonstrate that things are
kept impeccable. A drawing of the layout for the restaurants is shown in appendix 10.
9. Operations
9.1. Sourcing and Operations
The sourcing of all ingredients will be done in a centralized manner for the whole restaurant
chain to achieve volume discounts when applicable and share inventories to reduce carrying
costs. Most suppliers offer delivery services so ingredients and other supplies will be delivered to
the centralized kitchen in different frequencies will be delivered every morning while ingredients
such as salt can be replenished less frequently.
Some of the ingredients need prior cooking before being mixed with the raw fish and lime. For
example, sweet potatoes are placed on the dish, part as decoration but also as a component of the
dish. The sweet potato is served cold on the dish however it needs to be cooked, peeled and cut
before serving. A similar situation occurs with the corn.
Other ingredients that require prior processing are the octopus and calamari which have to be
quickly passed through boiling water for a few minutes because the effect of lime on them is not
the same as with fish. Some other ingredients such as the onion and hot pepper do not require
prior cooking however they require cleaning and cutting in a specific way before being
introduced to the ceviche.
All these operations will take place in the centralized kitchen and the output will be all the
ingredients in small containers ready to be placed on the counter top to be mixed and served as
ceviche. The only operation to take place at the restaurants is squeezing the lime. The reason for
this is because the lime juice changes taste with time therefore it needs to be freshly squeezed.
9.2. Staffing
The staffing requirements for the centralized kitchen were calculated by analyzing the operations
taking place there. Most restaurants have professional Chefs working on new recipies and
designing new menus, however, considering this restaurant will only serve one type of dish and
it will be standardized, there is no need for a Chef but only a cook.
9
The cook will be in charge of the careful cutting of the fish in the appropriate manner and
advising the employees at the restaurants about the best way to prepare a ceviche. An assistant
cook would be responsible for cutting, grinding or boiling other ingredients.
The cook’s detailed responsibilities include:
Define the recipes and establish the portions of each dish
Supervise the cooking operations
Manage the assistants
Cut the fish
The assistant’s responsibilities include:
Receive supplies when delivered
Select ingredients to be used during the day
Cut and prepare ingredients
Boil ingredients
Clean and wash dishes, pans and bowls
Receive empty containers from restaurants and store them
Control inventory of ingredients and filled containers
Receive orders from restaurants and select required inventory to deliver
Give the delivery person the required ingredients
At the beginning, with only one restaurant operating, two people (a cook and an assistant) can
handle the operations as shown in appendix 11. An additional assistant cook will be added with
expansion.
The employees working at the restaurants (counterpersons) do not need to have an extensive
cooking background because the learning curve for mixing the ingredients for ceviche is fast.
The personal trait required for this position is more on the personality side. The employee must
be polite, entrepreneurial enough so that she/he shows excitement for the new venture and should
have a very high understanding of the importance of customer service and hygiene. Employees
will always use the uniform provided by FastCeviche, caps and gloves to maintain a high
standard of cleanliness.
Each restaurant will be staffed with two counterpersons who will have the following
responsibilities:
Open and get the restaurant ready
Receive daily supplies and store them properly
Set up the counter with required ingredients and replenish when necessary
Greet the customers, bill them, collect cash
Serve the dishes and beverages
Cut and squeeze the limes
Pick up any dirty dishes left on tables
Clean tables, floors, dishes and empty containers
Control local inventory and ask for replenishment when necessary
The number of counterpersons has been determined as two for several reasons. The most
important one is the volume of customers expected on each restaurant and the capacity of each
10
counterperson to serve them. Another reason is to make is more difficult for the employees at the
restaurant dealing with the money collected to take some or all of it.
To oversee the operations of the kitchen and the restaurants, FastCeviche will hire a manager
who will be in charge of supervising the operations. The roles of this manager include:
Supervise operations in the centralized kitchen and restaurants
Pay salaries
Supervise proper inventory controls
Oversee proper cash management in restaurants
Negotiate with large suppliers
Set basis for outsourced delivery service of ingredients to restaurants
9.3. Organizational Culture
The organizational culture will be based on trust, fostering openness among peers and
information sharing at all levels, not only at an operational level to ensure process improvement
and benchmarking, but also regarding the business itself, in order to ensure that the employees
know how the company is doing and where it is heading.
Hygiene will be the company’s mandate, to the extent that not even profitability should
jeopardize it. The hiring process will look for candidates who have that value well entrenched
already, as it is something very difficult to learn or acquire. FastCeviche will offer its employees
training regarding cleaning best practices and the manager will be in charge of bringing latest
news about the topic every week to reinforce it.
Customer Service will be FastCeviche’s second most important value. The employees must
understand very well that the customer is always right, and should always do their best to serve
the customer well. The only acceptable case of not giving priority to a customer would be if
doing so puts health or hygiene at risk.
9.4. Milestones
The project will go through three main phases including the following activities.
Phase Time Activities Milestone
1 3 months Raise funds and strengthen the
leadership team
Legally set up the company
Find and rent the location
Renovations and permits
Hire manager, cook, assistant cook
and 2 counterpersons
Train staff
First Restaurant opens to public
2 2 months Look for three potential locations
Evaluate the acceptance of the
concept
Concept proved to be viable,
decision to expand is made
3 2 months Raise additional capital
Rent three locations
Three new restaurants open to
public
11
Renovations
Hire additional assistant cook and 6
counterpersons
Train staff
10. Management Team
Clara Chileana: has five years of experience in different industries specializing in Supply
Chain, Process Improvement and Project Management. Her experience in the food industry at
Nestle and at the cosmetics industry have contributed to build in her background a strong focus
on health and hygiene, bringing best practices and examples of common pitfalls in the large
industries. Moreover, her experience in supply chain will help structure the processes and
procedures for FastCeviche.
Bodo Bolivar: Bodo brings to the team more than eight years of finance experience in a large
bank in Peru as well as the entrepreneurial spirit. Knowing the financial tools available in Peru
and how to use them appropriately, Bodo will provide financial support to the team as well as
overlook the overall business.
Elicia Ecuadori: Elicia is a young entrepreneur specialized in the food industry. She has a
bachelor’s degree in hospitality services administration and more than six years of experience in
the catering business. She is the link to the industry providing know-how about the business,
suppliers and the network.
The current team will be expanded to include in the board of directors other young
entrepreneurial business people who are not linked to the industry, in order to bring fresh and
unbiased opinion to the running of this venture, as well as a larger network to spread the word
about the new chain and attract more customers faster.
11. Financials
11.1. Investment
In order to set up the first restaurant, FastCeviche will incur in several costs in terms of
equipment, renovations, cookware, cleaning and safety supplies, personal supplies for employees
and legal fees. Moreover, there will be additional expenses such as the monthly rent of the
restaurant while renovations take place, salaries to be paid to employees while they receive
training, and other smaller expenses. The total investment for setting up FastCeviche with the
first restaurant and the full kitchen is estimated to be US$24,857. Subsequent openings of the
smaller restaurants will require an investment of $20,400. The details about the start-up costs can
be found in appendix 12.
As the milestones indicate, FastCeviche expects to invest in three more restaurants after two
months. At that point in time, an additional contribution of capital of US$50,730 is required in
order to proceed with the renovations, set ups and working capital to start the operations.
12
The total investment required, rising to $75,587 will be raised from the current shareholders,
friends and family. Considering the affordable investment and the relatively quick return, no
need for external funding is foreseen.
11.2. Variable Costs
In order to calculate the cost of each dish (six in total) and beverages (three types only), the team
used the individual recipes and researched about the ingredients costs. A strong focus was given
on obtaining an accurate price for the fish considering it makes between 50% and 86% of the
total cost of the dishes.
FastCeviche will serve the food using non-disposable plates and cutlery. Only the glasses will be
disposable, therefore its cost is included in the calculation of the individual cost of the beverage.
An item that was also considered as part of any dish is a pair of disposable gloves which will be
used by the counterperson to prepare every entree and disposed of after finishing. The detailed
cost analysis of the dishes and beverages can be found in appendix 13.
11.3. Fixed Costs
The first restaurant will have the centralized kitchen annexed to it; therefore its fixed costs will
be higher than any other restaurant to be opened in the future. This larger format including the
regular restaurant area and the centralized kitchen will assume the cost of the two to three person
kitchen staff and the manager, representing the highest fixed cost of all. The total fixed cost of
this first restaurant including the centralized kitchen will be US$ 3,560 per month.
The smaller format restaurants to be opened in phase two will incur in lower fixed costs due to
the reduced renting space required, only two counterpersons on each location and sharing the
cost of the manager, adding up to US$ 1,700.
11.4. Break even point
The first restaurant will need 48 people to reach its break even while a small format will require
only 22. This big difference is due to the fact that the first restaurant will have the centralized
kitchen and all the fixed costs that the smaller formats do not incur in. Detailed information
about the fixed costs and break even points can be found in appendix 14.
Economies of scale are achieved when the number of small format restaurants starts increasing,
reaching an optimum at three small restaurants and the restaurant with the centralized kitchen. At
this point the break even point is 31 customers per restaurant on average.
After opening the four restaurants (three small format and the one with centralized kitchen),
costs do not decline linearly any further because it is necessary to hire a new manager to handle
the new restaurants and hire more assistant cooks in order to handle the extra volume more
restaurants signify. However, some economies of scale can still be achieved.
11.5. Income Statement
The pro forma income statement for FastCeviche indicates that for first semester of the first year
of operations the result will be a negative net income. The reason for this is the high upfront
costs required to set up the first restaurant, and the sales ramping up slowly from a very
13
conservative estimate of five customers per day during the first month, to finally reach the break
even point for the four restaurants in month seven.
The net income for year one is estimated to be US$ 6,364. For the following year, under the
scenario than no new investments are done and FastCeviche remains with the four restaurants
opened until that time, the net income for year two rises to US$48,627 (see appendix 15).
11.6. Sensitivity Analysis
Among the more than 170 variables involved in the calculations of the profitability of this
business, five of them are the most important ones and therefore used to simulate scenarios in
order to understand the sensitivity of the income to variations on these items.
Labour costs represent almost 38% of fixed costs. The sensitivity analysis determined that
FastCeviche remains profitable even if salaries have to be adjusted 170% above the current
estimate. The probability of any adjustment to be required is not that high considering that
FastCeviche will be paying salaries higher than the industry average. For example, the
counterperson will earn S/. 660 per month while on average in this sector, a person occupying
that same position would earn S/. 594 (Programa de Estadisticas y Estudios Laborales, 2006).
Another variable analyzed to understand its sensitivity to variations was rent which represents
32.7% of fixed costs. This variable also has the possibility to be 200% higher and FastCeviche
would still remain profitable.
For variable costs, the most important cost is the cost of the fish. Although the price of fish can
rise up to 70% without having negative effects on FastCevche, it can be assumed that any
significant increase in the price of fish would drive other restaurants serving ceviche to raise
their prices and FastCeviche being able to follow in the adjustment, and therefore the increased
cost would be absorbed by the higher price.
Regarding revenues, the number of customers per day proved to be the most sensitive variable.
The current target is 50 customers per day; however the analysis shows that below 30 customers
per day the business would not be able to cover its fixed costs. In terms of pricing, FastCeviche
can afford lowering prices up to 25% lower. Complete information about the sensitivity analysis
can be found in appendix 16.
11.7. Statement of Cash Flows
The statement of cash flows found in appendix 17 shows that in the sixth month, FastCeviche
reaches its lowest point in terms of cash flow and the highest investment and starts recovering as
it achieves a positive cash flow from that point onwards. A graphic representation of the cash
flow is shown in appendix 18.
12. Expansion plans and exit strategy
As mentioned in the milestones section, phase one will serve as a concept validation.
FastCeviche will allow the first two or three months to verify if the concept is accepted and if the
projections are going to be as expected. If things do not go as well as expected, FastCeviche
should decide to close at the most after the fourth month.
14
Closing would entail liquidating all the assets. The calculation of the rescue value has taken into
consideration that certain investments such as the ones for renovations will not be possible to
recover, while others such as kitchen equipment might be sold at 30% of its value. This
liquidation would yield a terminal value of US$4,975; therefore the shareholders would have to
assume a loss of US$19,883.
In case things go as expected, expands into four restaurants and there is still potential to further
expand, FastCeviche can choose among several options. Expansion can be done organically or
with investment from the shareholders considering that opening additional restaurants do not
require too large an investment (US$ 20,500).
Another alternative for expansion is to use franchises. In Peru, franchising is fairly new however
the most common business currently using the franchise model is restaurants. The local law does
not have any restrictions in terms of a minimum period of existence for the business to start
franchising; therefore, this could be a possibility even in the short term, once the processes are
clearly defined and improved (Camara Peruana de Franquicias, 2006).
Another option for expansion is to set up an agreement or joint venture with a larger restaurant or
other party in this industry. This option might require diluting some of the equity however; the
expansion could be much faster than in the other cases.
Although the management team has thought about these alternatives, the focus will be on
establishing the first restaurant and aiming to achieve the expected results to continue with the
expansion plans.
15
Appendices
Appendix 1: Primary Research – Consumer preferences in a Cevicheria
0
10
20
30
40
50
60
70
80
Tiradito Ceviches J aleas Fried Seefood Seafood Rice
%
16
Appendix 2: Types of Cevicherias
Type A Type B
Type C Type D
Appendix 3: Business Model of a traditional chain of Cevicherias
Food Suppliers Kitchen Restaurant Customers
Food Suppliers Kitchen Restaurant Customers
17
Appendix 4: Primary Research – Frequency for visiting a Cevicheria
9. Usted va a comer a una cevicheria (you go to a cevicheria)
Mas seguido de lo que le gustaría (more frequently than I would like to) 14%
Tan seguido como le gusta (As frequent as I would like) 29%
Menos seguido de lo que le gustaría (less frequently than I would like) 57%
Total 100%
Source: Primary research
Appendix 5: FastCeviche Business Model
Food Suppliers Kitchen Restaurant
Restaurant
Restaurant
Customers
Customers
Customers
Delivery
18
Appendix 6: Positioning Map of FastCeviche vs. Cevicherias Type A, B, C, D
Appendix 7: Restaurants in the four main districts
Source: Yellow Pages and Local Municipalities
Price of ceviche
Very Clean & Fresh
Not as Clean & Fresh
S/.25 S/.19 S/.15 S/.10
50
18
10
14
8
Cevicherias
38
12
10
12
4
Fast
Food
375 TOTAL
156 Miraflores
101 San Isidro
83 Surco
35 La Molina
Restaurants District
50
18
10
14
8
Cevicherias
38
12
10
12
4
Fast
Food
375 TOTAL
156 Miraflores
101 San Isidro
83 Surco
35 La Molina
Restaurants District
19
Fish Dish Name Prices Type A Type B Type C Type D
Ceviche Tradicional S/. 20.00 S/. 32.00 S/. 26.33 S/. 24.13 N/A
Ceviche Mixto S/. 20.00 S/. 32.00 S/. 26.33 S/. 24.13 N/A
Tiradito al Aji Amarillo S/. 20.00 S/. 32.00 S/. 26.33 S/. 24.13 N/A
Ceviche Tradicional S/. 13.00 S/. 25.00 S/. 19.00 S/. 14.71 S/. 10.00
Ceviche Mixto S/. 13.00 S/. 25.00 S/. 19.00 S/. 15.63 S/. 10.00
Tiradito al Aji Amarillo S/. 13.00 S/. 25.00 S/. 19.00 S/. 15.90 S/. 10.00
Competitors Average Price List Fast Ceviche Menu Price List
Sole Fish
Fish of the
Day
Fish Dish Name Prices Price less Tax Sale % Weighted Price Weighted Cost Contribution Margin
Ceviche Tradicional S/. 20.00 S/. 16.81 13.3% S/. 2.24 S/. 1.14 S/. 8.24
Ceviche Mixto S/. 20.00 S/. 16.81 13.3% S/. 2.24 S/. 0.92 S/. 9.90
Tiradito al Aji Amarillo S/. 20.00 S/. 16.81 13.3% S/. 2.24 S/. 1.15 S/. 8.22
Ceviche Tradicional S/. 13.00 S/. 10.92 20.0% S/. 2.18 S/. 1.00 S/. 5.93
Ceviche Mixto S/. 13.00 S/. 10.92 20.0% S/. 2.18 S/. 0.95 S/. 6.17
Tiradito al Aji Amarillo S/. 13.00 S/. 10.92 20.0% S/. 2.18 S/. 1.00 S/. 5.91
100.0% S/. 13.28 S/. 6.16 S/. 7.12
Drinks Dish Name Prices Price less Tax Sale % Weighted Price Weighted Cost Contribution Margin
Regular Pop S/. 2.00 S/. 1.68 30% S/. 0.50 S/. 0.32 S/. 0.61
Diet Pop S/. 2.00 S/. 1.68 20% S/. 0.34 S/. 0.24 S/. 0.47
Beer S/. 4.00 S/. 3.36 20% S/. 0.67 S/. 0.36 S/. 1.55
Chicha Morada S/. 1.50 S/. 1.26 30% S/. 0.38 S/. 0.16 S/. 0.74
100.0% S/. 1.89 S/. 1.08 S/. 0.81
Average Contribution Margin Per Customer S/. 15.17 S/. 7.24 S/. 7.92
Food Sales's Mix
Drink Sales's Mix
Drinks
Lenguado
Daily Fish
Appendix 8: Price Comparison
20
Appendix 9: Centralized Kitchen
Cold / Raw area
Warm / cooked area
Working table
Pans
Ingredients
21
Appendix 10: Restaurant Layout
Serving
Area
Small
Kitchen
Customer Area
Serving
Area
Small
Kitchen
Customer Area
22
Cut lettuce Boil octopus Cut octopus Store octopus
Peal SP Cut SP Store SP
Boil Calamari Cut Calamari Store Calamari
Cut corn Store corn
Cut apples
Cut quince
Cut pineapple
Cut cilantro Store Cilantro
Cut Hot Peppers Store Hot Peppers
Cut Yellow Peppers Store Y Peppers
Grind garlic Store Garlic
Store Onions
Fry Andean Corn Store Corn
Store Fish
Hour 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0
Slice Fish
C
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e
c
k
i
n
v
e
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o
r
y
&
P
r
e
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a
r
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o
r
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i
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e
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y
C
o
o
k
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e
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e
i
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e
s
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p
p
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i
e
s
D
e
l
i
v
e
r
y
t
o
r
e
s
t
a
u
r
a
n
t
s
Boil Sweet Potato (SP)
Boil corn
Boil Chicha Morada Store Chicha
A
s
s
i
s
t
a
n
t
C
o
o
k
Cut Onions
Appendix 11: Operations Schedule at Centralized Kitchen
23
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Materials 1 $4,000 800 $ 0 760 $ 3,200 $
Stools 15 $600 200 $ 180 114 $ 600 $
Tables 2 $400 100 $ 0 76 $ 400 $
Total $5,000 $1,100 $180
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Industrial Refrigerator Indumey 1.50 X 0.60 X 0.90 (0.81 m3) 1 $1,900 633 $ 950 361 $ - $
Refrigerated Counter 1.50 x0.60 x0.90 (0.9 m2) 1 $1,650 550 $ 825 314 $ 1,650 $
Stainless steel sink 1 $490 163 $ 245 93 $ 490 $
Shelves 1 $400 133 $ 200 76 $ 400 $
Working table 1.20 X 0.60 X 0.90 (0.72 m2) 1 $390 130 $ 195 74 $ 390 $
4 element stove - gas 1 $300 120 $ 150 57 $ - $
Pans 4 $150 100 $ 0 29 $ - $
Blender 1 $90 60 $ 45 17 $ - $
Gas containers 2 $78 31 $ 0 15 $ - $
15kg scale 1 $40 27 $ 20 8 $ - $
Stainless steel strainers 2 $38 38 $ 0 7 $ - $
Knives 4 $23 23 $ 0 4 $ 23 $
Spoons 4 $10 10 $ 0 2 $ 10 $
Container for Chicha 2 $9 9 $ 0 2 $ - $
Can opener 2 $6 6 $ 0 1 $ - $
Cutting board 2 $5 5 $ 0 1 $ - $
Plastic strainers 2 $2 2 $ 0 0 $ - $
Total $5,581 $2,041 $2,630
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Plates 45 $70 70 $ 35.2 13 $ 70 $
Beer Glasses 15 $30 30 $ 15.0 6 $ 30 $
Tuppers 10 $19 19 $ 9.4 4 $ 19 $
Forks &Knives 48 $15 15 $ 7.5 3 $ 15 $
Spoons 15 $5 5 $ 2.3 1 $ 5 $
Lime squeezer 3 $5 5 $ 2.3 1 $ 5 $
Total $143 $143 $72
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Trash Can 1 $14 14 $ 7.0 3 $ 14 $
Cleaning soap 1 $9 36 $ 4.5 2 $ 9 $
75lt trash bags 4 $9 9 $ 4.4 2 $ 9 $
Clorox 1 $7 28 $ 3.5 1 $ 7 $
Towels 4 $6 25 $ 3.1 1 $ 6 $
Small trash can 1 $5 5 $ 2.3 1 $ 5 $
Windowcleaner 1 $5 19 $ 2.3 1 $ 5 $
Sponges 1 $4 17 $ 2.1 1 $ 4 $
Boxes to store vegetables 1 $4 15 $ 1.9 1 $ 4 $
Cleaning cloths 2 $3 13 $ 1.6 1 $ 3 $
Plastic wrap 2 $3 11 $ 1.4 1 $ 3 $
Bucket 1 $2 2 $ 1.1 0 $ 2 $
Industrial Paper towel 1 $2 9 $ 1.1 0 $ 2 $
Detergent 1 $2 6 $ 0.8 0 $ 2 $
Broom 1 $1 4 $ 0.5 0 $ 1 $
Napkins 1 $1 2 $ 0.3 0 $ 1 $
Total $76 $214 $38
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Counter 1 $3,500 1,167 $ 1400.0 665 $ 3,500 $
Containers of Policarbonate for counter (medium) 39 $1,560 1,040 $ 312.0 296 $ 1,560 $
Cash Register Machine 1 $400 160 $ 240.0 76 $ 400 $
Containers of Policarbonate for counter (small) 9 $135 135 $ 27.0 26 $ 135 $
AluminuimBow22 cmor 3 litres 45 $0 - $ 0.0 - $ - $
Total $5,674 $2,728 $2,018 0
- $
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Uniforms (only top) 10 $31 31 $ 18.8 6 $ 31 $
Cabs or Chef Hat 10 $16 16 $ 9.4 3 $ 16 $
Gloves 2 $8 8 $ 4.5 1 $ 8 $
Cleaning Gloves 1 $7 7 $ 4.1 1 $ 7 $
Total $61 $61 $37 11.6375
- $
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Legal Issues - Permits 1 $500 100 $ 0.0 95 $ 100 $
Office Expenses 1 $50 20 $ 0.0 10 $ - $
Total $550 $120 $0 0
Concept Quantity Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Rent deposit per month 2 $1,632 - $ 0 310 $ 1,224 $
Initial Working Capital Supplies 1 $625 - $ 0 119 $ 625 $
Montlhy Salary 2 $3,150 - $ 0 3,150 $
Manteinance 1 $98 - $ 0 19 $ 73 $
Other 1 $1,488 - $ 0 283 $ 1,488 $
Total $6,994 $0 $0
Total US$ Annual Dep. Rescue Value Sales Tax Small Restaurant Fomat
Grand Total $24,857 $6,607 $4,975 $4,121 $20,400
Renovations
Start Up - Investment
Kitchen Equipment
Cookware
Legal Fees
Other current expenses
Cleaning and Safety supplies
Restaurant Equipment
Personal Supplies
Appendix 12: Investment
24
Appendix 13: Dish cost analysis
Concept Retail Price Quantity Serving Size Units Cost %
Sole "Lenguado" S/. 44.00 1000 200 grms S/. 8.80 86.3%
Total Main Ingredients S/. 8.80 86.3%
Onion S/. 1.09 4 0.25 unit S/. 0.07 0.7%
Hot Pepper "Limo" Red S/. 9.60 20 0.13 unit S/. 0.06 0.6%
Hot Pepper "Limo" Yellow S/. 9.60 20 0.13 unit S/. 0.06 0.6%
Key Limes S/. 2.30 25 4.00 units S/. 0.37 3.6%
Salt S/. 0.80 1000 5.00 grms S/. 0.00 0.0%
Cilantro S/. 0.45 1 0.10 unit S/. 0.05 0.4%
MSG Seasoning "Ajinomoto" S/. 10.20 1000 5.00 grms S/. 0.05 0.5%
Total Other Ingredients S/. 0.66 6.4%
Corn S/. 1.00 1 0.33 units S/. 0.33 3.2%
Sweet Potato S/. 1.29 4 0.50 units S/. 0.16 1.6%
Lettuce S/. 0.89 1 0.10 units S/. 0.09 0.9%
Andean Fried Corn S/. 3.00 1000 20.00 grms S/. 0.06 0.6%
Total Other Food S/. 0.64 6.3%
Napkins S/. 1.90 1000 2 units S/. 0.004 0.0%
Disposable Gloves S/. 6.96 150 2 units S/. 0.09 0.9%
Total Cleaning Supplies S/. 0.10 0.9%
Total Variable Cost S/. 10.19 100.0%
Dish Picture
Dish Cost Analysis
Dish Name: Classic Ceviche with Sole Fish "Lenguado"
25
Appendix 13: Dish Cost Analysis
Concept Retail Price Quantity Serving Size Units Cost %
Fish of the Day S/. 22.73 1000 200 grms S/. 4.55 76.2%
Total Main Ingredients S/. 4.55 76.2%
Sugar S/. 2.79 1000 26.70 grms S/. 0.07 1.2%
Yellow Hot Pepper S/. 1.85 20 1.30 unit S/. 0.12 2.0%
Vinager S/. 2.55 500 8.30 ml S/. 0.04 0.7%
Key Limes S/. 2.30 15 2.00 units S/. 0.31 5.1%
Salt S/. 0.80 1000 5.00 grms S/. 0.00 0.1%
Cilantro S/. 0.45 1 0.10 unit S/. 0.05 0.8%
Oil S/. 4.50 1000 2.66 ml S/. 0.01 0.2%
Total Other Ingredients S/. 0.60 10.1%
Corn S/. 1.00 1 0.50 units S/. 0.50 8.4%
Sweet Potato S/. 1.29 4 0.50 units S/. 0.16 2.7%
Andean Fried Corn S/. 3.00 1000 20.00 grms S/. 0.06 1.0%
Total Other Food S/. 0.72 12.1%
Otros 0.0%
Napkins S/. 1.90 1000 2 units S/. 0.004 0.1%
Disposable Gloves S/. 6.96 150 2 units S/. 0.09 1.6%
Total Cleaning Supplies S/. 0.10 1.6%
Total Variable Cost S/. 5.97 100.0%
Dish Cost Analysis
Dish Name: Tiradito With Fish Of The Day Of Yellow Hot Pepper Sauce
Dish Picture
26
Appendix 13: Dish Cost Analysis
Concept Retail Price Quantity Serving Size Units Cost %
Coca Cola / Inka Cola / Sprite 500 ml S/. 15.00 12 1 unit S/. 1.25 97.8%
Disposable Glass (7 ounce - 200 ml) S/. 27.60 1,000 1 unit S/. 0.03 2.2%
Total Cost S/. 1.28 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Coca Cola / Inka Cola / Sprite (light) S/. 17.00 12 1 unit S/. 1.42 98.1%
Disposable Glass (7 ounce - 200 ml) S/. 27.60 1,000 1 unit S/. 0.03 1.9%
Total Cost S/. 1.44 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Bottle 355 ml S/. 12.90 6 1 unit S/. 2.15 100.0%
Total Cost S/. 2.15 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Coca Cola / Inka Cola / Sprite S/. 5.20 3,000 350 unit S/. 0.61 88.6%
Disposable Glass (12 ounce -350 ml) S/. 77.81 1,000 1 unit S/. 0.08 11.4%
Total Cost S/. 0.68 100.0%
Concept Retail Price Quantity Serving Size Units Cost %
Purple Corn S/. 1.95 1000 50 grms S/. 0.10 15.7%
Water S/. 0.00 1000 4 liters S/. 0.00 0.0%
Dry Cherry "Guindas" S/. 8.75 20 0.1 units S/. 0.04 7.0%
Key Limes S/. 2.30 15 0.5 Units S/. 0.08 12.3%
Peelings fromApples S/. 3.45 5 0.15 Units S/. 0.10 16.6%
Membrillo S/. 2.90 5 0.15 Units S/. 0.09 14.0%
Steak of Cinnamon S/. 40.00 100 0.15 Units S/. 0.06 9.6%
Peelings fromPineapple S/. 0.80 100 0.15 Units S/. 0.00 0.2%
Sugar S/. 2.79 1000 12.5 grms S/. 0.03 5.6%
Whole Cloves S/. 40.00 1000 1 grms S/. 0.04 6.4%
Disposable Glass (12 ounce -350 ml) S/. 77.81 1,000 1 unit S/. 0.08 12.5%
Total Cost S/. 0.62 100.0%
Drink - Chicha Morada
Regular Drinks
Light Drinks
Beer
Regular Drinks (3 litres bottles)
Drinks Cost Analysis
27
Appendix 13: Dish Cost Analysis
# Unit Product Price
1 Unit Corn S/. 1.00
1 kg Red Onio S/. 1.09
500 ml Vinager S/. 2.55
1 unit Lettuce S/. 0.89
1 dozen Coca Cola / Inka Kola S/. 15.00
1 dozen Coca Cola / Inka Kola Light S/. 17.00
6 units Beer Bottle 355 ml S/. 12.90
3 litres Coca Cola S/. 5.20
1 kg Purple Corn S/. 1.95
1 kg Sweet Potate S/. 1.29
1 unit Cilantro S/. 0.45
1 unit Celery S/. 0.40
1 kg Hot Pepper "Limo" Yellow S/. 9.60
1 kg Hot Pepper "Limo" Red S/. 9.60
1 kg Yellow Hot Pepper S/. 1.85
1 kg Rocoto S/. 0.30
1 kg o manojo Garlic S/. 4.60
1 kg Key Limes S/. 2.30
1 kg Andean Fried Corn S/. 3.00
1 kg Tomatto S/. 2.10
1 kg Apples S/. 3.45
1 kg Pineapples S/. 0.80
1 kg Membrillo S/. 2.90
1 kg Salt S/. 0.80
1 kg Pepper S/. 40.00
1 500 ml MSG Seasoning "Ajinomoto" S/. 10.20
1 kg Steak of Cinnamon S/. 40.00
1 kg Whole Cloves S/. 40.00
1 kg Sugar S/. 3.15
200 grms aprox Anis S/. 2.00
1 Litres Milk S/. 2.25
6 Cans Evaporated Milk S/. 11.00
1 Litres Oil S/. 4.50
1000 grms Fish "Lenguado" S/. 22.00
1000 grms Fish "Lengueta" S/. 12.50
1000 grms Fish "Corvina" S/. 25.00
1000 grms Fish "Perico" S/. 9.00
1000 grms Fish "Mero" S/. 12.50
1000 grms Fish "Robalo" S/. 25.00
1000 grms Fish "Toyo" S/. 15.00
1000 grms Fish "Cojinova" S/. 20.00
1000 grms Octopus S/. 12.00
1000 grms Calamari S/. 7.00
15 units Green Sponge 3M S/. 13.50
1 unit Plastic Wrap Film12¨x 30 mts. S/. 4.40
1 unit Plastic Wrap Film12¨x 1500 mts. S/. 101.00
1 unit Plastic Wrap Film15¨x 1500 mts. S/. 129.03
8 meters AluminiumPaper X 8 MTS. S/. 4.20
150 units Disposable Gloves (plastic) S/. 6.96
100 units Disposable Gloves (better quality) S/. 13.50
1 unit Broom S/. 25.00
1 unit Bucket 5 litres S/. 10.00
1 unit Fire Extinguisher 1 litres S/. 150.00
Sea Products
Cleaning Products
Suppl i es Li st
28
Appendix 14: Fixed cost analysis and break even point
Small Format Large Format Competitors
Gas S/. 100 S/. 100
Electricity S/. 90 S/. 99 S/. 99
Water S/. 0 S/. 0 S/. 0
Telephone S/. 90 S/. 90 S/. 90
Total Utilities S/. 180 S/. 289 S/. 289
Square Metres 55.60 74.2 110
Rent S/. 1,957 S/. 2,612 S/. 3,872
Maintenance fee S/. 235 S/. 313 S/. 465
Total S/. 2,192 S/. 2,925 S/. 4,337
Advertising S/. 100 S/. 100
Repair & Maintenance S/. 50 S/. 100 S/. 100
Miscellaneous S/. 50 S/. 100 S/. 100
Transportation
Insurance S/. 75 S/. 150 S/. 150
Bank Fees S/. 20 S/. 20
Office Expenses S/. 35 S/. 70 S/. 70
Professional Fee - Accountant S/. 300 S/. 300
Depreciation S/. 1,357 S/. 1,762 S/. 1,762
Total S/. 1,567 S/. 2,502 S/. 2,502
Cook S/. 960 960
Assistant Cook S/. 660 1980
Counterperson S/. 1,320 S/. 1,320 S/. 1,980
Restaurant & Kitchen Manager S/. 2,760 S/. 2,760
Total S/. 1,320 S/. 5,700 S/. 7,680
Grand Total S/. 5,259 S/. 11,416 S/. 14,808
Daily Breakeven Point (Customers/Rest) 22 48 62
Fixed Costs (S/.)
29
Appendix 15: Income Statement
Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales S/. 2,275 S/. 6,825 S/. 11,375 S/. 15,925 S/. 27,299 S/. 43,224 S/. 56,874 S/. 70,524 S/. 84,173 S/. 90,998 S/. 90,998 S/. 90,998
Cost of Sales S/. 1,086 S/. 3,259 S/. 5,432 S/. 7,605 S/. 13,037 S/. 20,642 S/. 27,160 S/. 33,678 S/. 40,197 S/. 43,456 S/. 43,456 S/. 43,456
Gross Margin S/. 0 S/. 1,189 S/. 3,566 S/. 5,943 S/. 8,320 S/. 14,263 S/. 22,583 S/. 29,714 S/. 36,845 S/. 43,977 S/. 47,542 S/. 47,542 S/. 47,542
Direct Labor
Cook S/. 240 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960 S/. 960
Cook Assistant S/. 165 S/. 660 S/. 660 S/. 660 S/. 660 S/. 660 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320 S/. 1,320
Cashier / Waitress S/. 165 S/. 660 S/. 660 S/. 660 S/. 1,320 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940 S/. 5,940
Total Labor Costs S/. 570 S/. 2,280 S/. 2,280 S/. 2,280 S/. 2,940 S/. 7,560 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220 S/. 8,220
Other Expenses
Rent & Maintenance S/. 2,925 S/. 2,925 S/. 2,925 S/. 2,925 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501 S/. 9,501
Utilities S/. 145 S/. 289 S/. 289 S/. 289 S/. 650 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723 S/. 723
Advertising S/. 1,000 S/. 0 S/. 0 S/. 0 S/. 1,000 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 100
Repair & Maintenance S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250
Miscellaneous S/. 100 S/. 100 S/. 100 S/. 100 S/. 100 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250 S/. 250
Transportation S/. 0 S/. 0 S/. 0 S/. 0 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510 S/. 510
Insurance S/. 150 S/. 150 S/. 150 S/. 150 S/. 150 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375 S/. 375
Bank Fees S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20 S/. 20
Office Expenses S/. 210 S/. 70 S/. 70 S/. 70 S/. 70 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175 S/. 175
Professional Fee - Accountant S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300 S/. 300
Manager S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760 S/. 2,760
Depreciation S/. 1,762 S/. 1,762 S/. 1,762 S/. 1,762 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834 S/. 5,834
Total Administrative Expensive S/. 7,690 S/. 8,476 S/. 8,476 S/. 8,476 S/. 16,413 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798 S/. 20,798
Operating Margin -S/. 8,260 -S/. 9,568 -S/. 7,191 -S/. 4,813 -S/. 11,033 -S/. 14,095 -S/. 6,435 S/. 696 S/. 7,828 S/. 14,959 S/. 18,525 S/. 18,525 S/. 18,525
Profit Before Taxes -S/. 8,260 -S/. 9,568 -S/. 7,191 -S/. 4,813 -S/. 11,033 -S/. 14,095 -S/. 6,435 S/. 696 S/. 7,828 S/. 14,959 S/. 18,525 S/. 18,525 S/. 18,525
Accumulated Profits -S/. 8,260 -S/. 17,827 -S/. 25,018 -S/. 29,831 -S/. 40,865 -S/. 54,960 -S/. 61,395 -S/. 60,698 -S/. 52,871 -S/. 37,912 -S/. 19,387 -S/. 862 S/. 17,662
Corporate Tax (30%) S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 0 S/. 5,557
Net Income Peruvian Soles -S/. 8,260 -S/. 9,568 -S/. 7,191 -S/. 4,813 -S/. 11,033 -S/. 14,095 -S/. 6,435 S/. 696 S/. 7,828 S/. 14,959 S/. 18,525 S/. 18,525 S/. 12,967
Net Income US$ -$2,581 -$2,990 -$2,247 -$1,504 -$3,448 -$4,405 -$2,011 $218 $2,446 $4,675 $5,789 $5,789 $4,052
Fast Ceviche
Income Statement Forecast (First Year - S/.)
30
Year 1 Year 2 Year 3 Year 4 Year 5
Sales S/. 591,489 S/. 1,091,980 S/. 1,091,980 S/. 1,091,980 S/. 1,091,980
Cost of Sales S/. 282,464 S/. 521,472 S/. 521,472 S/. 521,472 S/. 521,472
Gross Margin S/. 309,025 S/. 570,508 S/. 570,508 S/. 570,508 S/. 570,508
S/. 0 S/. 0 S/. 0 S/. 0
Direct Labor S/. 0 S/. 0 S/. 0 S/. 0
Cook S/. 11,520 S/. 11,520 S/. 11,520 S/. 11,520 S/. 11,520
Cook Assistant S/. 12,540 S/. 15,840 S/. 15,840 S/. 15,840 S/. 15,840
Cashier / Waitress S/. 50,820 S/. 71,280 S/. 71,280 S/. 71,280 S/. 71,280
Total Labor Costs S/. 74,880 S/. 98,640 S/. 98,640 S/. 98,640 S/. 98,640
S/. 0 S/. 0 S/. 0 S/. 0
Other Expenses S/. 0 S/. 0 S/. 0 S/. 0
Rent & Maintenance S/. 94,286 S/. 114,014 S/. 114,014 S/. 114,014 S/. 114,014
Utilities S/. 7,297 S/. 8,670 S/. 8,670 S/. 8,670 S/. 8,670
Advertising S/. 1,800 S/. 1,200 S/. 1,200 S/. 1,200 S/. 1,200
Repair & Maintenance S/. 2,400 S/. 3,000 S/. 3,000 S/. 3,000 S/. 3,000
Miscellaneous S/. 2,400 S/. 3,000 S/. 3,000 S/. 3,000 S/. 3,000
Transportation S/. 4,080 S/. 6,120 S/. 6,120 S/. 6,120 S/. 6,120
Insurance S/. 3,600 S/. 4,500 S/. 4,500 S/. 4,500 S/. 4,500
Bank Fees S/. 240 S/. 240 S/. 240 S/. 240 S/. 240
Office Expenses S/. 1,680 S/. 2,100 S/. 2,100 S/. 2,100 S/. 2,100
Professional Fee - Accountant S/. 3,600 S/. 3,600 S/. 3,600 S/. 3,600 S/. 3,600
Manager S/. 33,120 S/. 33,120 S/. 33,120 S/. 33,120 S/. 33,120
Depreciation S/. 53,719 S/. 70,008 S/. 70,008 S/. 70,008 S/. 70,008
Total Administrative Expensive S/. 208,223 S/. 249,572 S/. 249,572 S/. 249,572 S/. 249,572
Operating Margin S/. 25,922 S/. 222,296 S/. 222,296 S/. 222,296 S/. 222,296
Profit Before Taxes S/. 25,922 S/. 222,296 S/. 222,296 S/. 222,296 S/. 222,296
Accumulated Profits
Corporate Tax S/. 5,557 S/. 66,689 S/. 66,689 S/. 66,689 S/. 66,689
Net Income Peruvian Soles S/. 20,365 S/. 155,607 S/. 155,607 S/. 155,607 S/. 155,607
Net Income US$ $6,364 $48,627 $48,627 $48,627 $48,627
Fast Ceviche
Income Statement Forecast
31
Appendix 16: Sensitivity Analysis (Peruvian S/.)
% Breakeven Net Profits Rent M2 Breakeven Net Profits % Breakeven Net Profits
-30% 27.1 183,277 # 5 25.1 199,140 # -30% 26.0 224,391
-25% 27.6 178,665 6 26.0 191,885 -25% 26.7 212,927
-20% 28.2 174,054 7 26.9 184,629 -20% 27.4 201,463
-15% 28.8 169,442 8 27.8 177,374 -15% 28.1 189,999
-10% 29.4 164,831 9 28.7 170,118 -10% 28.9 178,535
-5% 29.9 160,219 10 29.6 162,863 -5% 29.7 167,071
0% 30.5 155,607 11 30.5 155,607 0% 30.5 155,607
5% 31.1 150,996 12 31.4 148,352 5% 31.4 144,143
10% 31.7 146,384 13 32.3 141,096 10% 32.4 132,679
15% 32.2 141,773 14 33.2 133,841 15% 33.4 121,215
20% 32.8 137,161 15 34.2 126,586 20% 34.5 109,751
25% 33.4 132,549 16 35.1 119,330 25% 35.6 98,287
30% 34.0 127,938 17 36.0 112,075 30% 36.9 86,824
100% 42.1 63,375 33 50.5 5,732 - 70% 51.0 6,983 -
Labour Analysis Rent Cost Analysis
37.8% of the Fixed Cost 32.7% of the fixed cost 75% of the Variable Cost
Fish Cost Analysis
% # Profits % Breakeven Net Profits
-40% 30 5,907 - -25% 59 -50,699
-30% 35 35,801 -20% 49 2,730
-20% 40 75,736 -15% 43 40,949
-10% 45 115,672 -10% 38 79,169
0% 50 155,607 -5% 34 117,388
10% 55 195,543 0% 31 155,607
20% 60 235,478 5% 28 193,827
30% 65 275,414 10% 26 232,046
40% 70 315,350 15% 24 270,265
50% 75 355,285 20% 22 308,484
60% 80 395,221 25% 21 346,704
200% 150 954,319 30% 19 384,923
Average Price S/. 15.2 Goal: 50 Customers per Day
Number of Customers Price Change
32
Appendix 17: Statement of Cash Flows
Concept Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Operating Activities
Profit Before Taxes 8,260 - 9,568 - 7,191 - 4,813 - 11,033 - 14,095 - 6,435 - 696 7,828 14,959 18,525 18,525 18,525
Depreciation - 1,762 1,762 1,762 1,762 5,834 5,834 5,834 5,834 5,834 5,834 5,834 5,834
Income Taxes Payable - - - - - - - - - - - 5,557 -
Net Cash Provided by operations 8,260 - 7,806 - 5,429 - 3,051 - 9,272 - 8,261 - 601 - 6,530 13,662 20,793 24,359 24,359 18,801
Investment Activities
Initial Renovation Improvements 18,240 - 42,682 -
Machines 18,319 - 42,866 -
Furniture 18,156 - 42,485 -
Legal, other miscellaneous costs 2,198 - 5,144 -
Net cash used in investing activities 56,913 - - - - 133,177 - - - - - - - - -
Financing Activities
Shareholder 79,543 97,919 65,279
Short TermBank Loan
Long TermBank Loan
Net Cash used in financing activities 79,543 - - 97,919 65,279 - - - - - - - -
Increase or decrease in cash 14,370 7,806 - 5,429 - 94,867 77,169 - 8,261 - 601 - 6,530 13,662 20,793 24,359 24,359 18,801
Cash at the beginning of the year 14,370 14,370 6,565 1,136 96,003 18,834 10,573 9,972 16,502 30,164 50,957 75,315 99,674
Cash at the end of the period S/. 14,370 6,565 1,136 96,003 18,834 10,573 9,972 16,502 30,164 50,957 75,315 99,674 118,475
Cash at the end of the period US$ $4,491 $2,051 $355 $30,001 $5,886 $3,304 $3,116 $5,157 $9,426 $15,924 $23,536 $31,148 $37,024
Fast Ceviche
Statement of Cashflow Forecast (S/.)
33
Appendix 18: Cash flow Graph (US$)
4,491
3,116
37,024
30,001
-20,367
-72,740
-100,000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
0 1 2 3 4 5 6 7 8 9 10 11 12
Month
US $
Real cash flow Zero Investment
34
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doc_548172824.pdf