Fire Fountain Grille

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Steak Restaurant Business Plan

Market Analysis Summary

Electrumburg is a dynamic city located in the rapidly growing Southeast part of the Starburstville metropolitan area. The city is known for its excellent medical and educational institutions, beautiful neighborhoods, easy access to freeways and a diversified economic base. From a residential perspective, Electrumburg features master-planned communities, luxury executive homes, older residences in tree-lined neighborhoods and affordable starter housing. A robust economy, attractive residential developments, exciting commercial and business growth, dynamic neighborhoods and abundant civic pride combined with outstanding city services - Electrumburg has all of the amenities necessary for ensuring a quality lifestyle.

Electrumburg has been one of the fastest-growing cities in one of the fastest-growing metropolitan areas in the United States over the past three decades. The city's population grew 48 percent during the 1990s. Today, Electrumburg has a population of more than 225,000. Electrumburg is adjacent to Starburstville (pop. 500,000), within the Valley with 1.6 million residents.

The median age of "Electrumburgians" is 39 years, and more than 59 percent of its residents are college-educated. Of the five largest cities in the Valley, Electrumburg has the most homes with married couples (53 percent) and the largest percentage of households with children under 18 years old living at home (32 percent). The demographics of Electrumburg's workforce are almost identical to that of the region, providing an excellent labor pool for businesses of all sizes. The fact that Electrumburg is part of a vibrant metropolitan area makes it a very attractive place to live and establish a business.

4.1 Market Segmentation

Fire Fountain Grille, Unit One, is located in Electrumburg. According to the Electrumburg Chamber of Commerce and the US Census Bureau, the population within a five mile radius of this address is nearly 125,000, with over 59,000 households, and over 400 businesses. Income within one mile is over $81,000, $72,000 within three miles and $60,000 within five miles. Per capita retail spending in this area exceeds $13,000, with total retail spending exceeding $2.8 billion!

 

The first tier target segment for Fire Fountain Grille concentrates on the 30-44 year old age range, with income in the $40,000 - $80,000 range, located within a five mile radius. Second tier is the 45-59 year old range, with income in the $55,000 - $90,000 range, located within a five mile radius. Third tier is the 21-29 group, with income at $36,000 - $60,000, located within a five mile radius. Fourth tier is a combination of the age and income ranges mentioned in tiers 1-3, but extends the geographic radius to seven miles. Fifth tier is age ranges 60+, within five miles, and income of $65,000+. Sixth, and final tier is a composite of age ranges 60+, 10-20, and under 10, with a radius of five - seven miles, and a mixture of incomes.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Ages 30-44 (within 5 mile radius) 10% 48,000 52,800 58,080 63,888 70,277 10.00%
Ages 45-59 (within 5 mile radius) 9% 30,000 32,700 35,643 38,851 42,348 9.00%
Ages 21-29 (within 5 mile radius) 9% 24,000 26,160 28,514 31,080 33,877 9.00%
Ages 60 + (within 5 mile radius) 7% 42,000 44,940 48,086 51,452 55,054 7.00%
Ages 10-20 (within 5 mile radius) 5% 30,000 31,500 33,075 34,729 36,465 5.00%
Ages 2-10 (within 5 mile radius) 2% 26,000 26,520 27,050 27,591 28,143 2.00%
Total 7.41% 200,000 214,620 230,448 247,591 266,164 7.41%

4.2 Target Market Segment Strategy

Strategically, targeting the 30-44 year old age range in upper middle class areas close to our restaurant helps serve the needs and requirements of our customers, and ties in logically with our marketing plan (see Marketing Plan) and style of restaurant. Typically, the upper middle class in the 30-44 range are raising families whose children range from toddlers to teens, yet tend to continue to have "disposable" dollars available for a quality diversion (such as Fire Fountain Grille) to get them away from home and work. These customers have regimented schedules in their lives, and find value in exceptional service, timely service, and mouth watering, delightful food. If a couple chooses to leave the kids home, they'll find value in the form of satisfaction and fun together, in their diversionary time. If they bring the kids, they will appreciate a value based kids menu. This first tier of our market segment, is also the primary focus of our marketing plan (see Marketing Plan), which has a deep commitment to focusing on kids, at their schools and in their community. These kids are primarily the children of our 30-44 tier-one group. Industry research (Nation's Restaurant News®) has shown that the 30-44 age group appreciates steaks, chops, chicken and seafood dishes prepared with lightly seasoned recipes, which is a perfect fit for Fire Fountain Grille.

 

Our SECOND-TIER market group (45-59 / $55,000 - $ 80,000), will also find value in great service, and delicious food, and will appreciate a restaurant with a much better wine list than what is normally available in the upscale casual dining niche. Fire Fountain Grille will also be considered a refreshing escape from restaurants that sing and clap for birthdays.

 

Our THIRD-TIER group, the 21-29 year olds will find that the menu contains many favorites available to them that are considered essential: tantalizing appetizers, spicy steaks, and hundreds of cocktails and specialty beers. The Fire Fountain turns down the lights for late hour business on the weekends, and offers jazz and food and beverage specials, offering our customers a chance for some socializing and conversation.

 

FOURTH-TIER simply extends the market radius out to a five mile area, with the same demographics included in tiers 1-3.

 

FIFTH-TIER (60+ / $65,000+), represents a market that has abundant disposable income, and truly reveres attentive, efficient service. Fire Fountain Grille serves all of its meals with the option of cooking with little or no spices. This customization is much more appreciated by this group, who often prefer meals prepared to their own specifications. Because Fire Fountain Grille has only one purpose in mind when it comes to our customers – All Customers Must Leave Happy, customizing a meal to our treasured customers will always be a pleasure!

 

The SIXTH-TIER group will benefit from all of the quality approaches that are marketed to the previous five tiers, and will gain exposure to us primarily through our community involvement and word-of-mouth.

The trends in the Starburstville Metro market rely heavily on visual appeal, and locations. Most restaurants overlook targeting kids as a way to market to the parents. The Fire Fountain Grille does not seek to market to kids to get them to eat at our restaurant, but rather as a way to get their parents to eat there.

4.2.2 Market Growth

Steak restaurants comprise less than 5% of the total restaurant market. Service oriented steak houses have room to grow. Meat and potatoes is still what Americans want, and they want it with good service.

4.2.3 Market Needs

The market suffers from a lack of service oriented restaurants. The market needs a restaurant that values the customer as its number one priority.

4.3 Service Business Analysis

All restaurants combined, from fast food to fine dining, show an average bottom line profit of 3-10%. Margins are much better in full service restaurants with good management, good staff, good concepts, good menus and wine lists, good location and good financial controls. A full service steakhouse with all of these factors should show a bottom line profit of 13% - 25%.

4.3.1 Competition and Buying Patterns

The general nature of competition in this business, and how the customers seem to choose one provider over another can be measured by customer loyalty and positive word of mouth. Customer loyalty and brand preference come from developing a trust between the customer and the business. To be successful in the hospitality business, one must truly believe in, and always apply, the fundamental meaning of hospitality, which simply stated is, one must always be hospitable, and the customer must truly be made to feel welcome and cared for. The trust that a customer feels, is based upon the business' ability to recognize what it takes to please a customer, and then is built upon by continuously delivering to that customer at, or above, the level of expectation that the customer expects. Fire Fountain Grille has carefully selected a management team that has been specially trained in the high art of exceptional customer service. The screening, hiring and training standards for front-of-the house staff are the highest in the industry.

The level of attention and care that our staff bestows upon our customers sets us far above our competition. Fire Fountain Grille also has extremely high standards for professionalism in the kitchen. Cleanliness, freshness of ingredients, adherence to recipe and cooking standards, and efficiency are constantly applied. Prices are reasonable, and are perceived as being an exceptional value. Fire Fountain Grille offers extremely delicious steaks, tantalizing chicken dishes, savory grilled seafoods, tender prime rib, fresh salads, sensational appetizers, tempting desserts and refreshing beverages. All of this can be found in an environment with an ambience that is unusual, and very comfortable. Our signature "Fire Fountain" fills the restaurant with an exciting glow, and the soothing sounds of falling water. The seating is almost all private booths, creating an atmosphere of relaxation and comfort.

The Fire Fountain Grille is conveniently located on a highly visible ingress near a successful mall. The restaurant has a huge, secure parking lot, excellent ingress and egress, and a beautiful and highly noticeable exterior. This area has other restaurants, which is a definite plus for us. This allows us to capitalize on a positive "clustering" effect, and works well with our marketing strategy.

4.3.2 Main Competitors

Competition comes from major chains and from various independents.

4.3.3 Business Participants

The general category is eating and drinking places. Typically, this can be broken down as follows:

  1. Fine dining  (white tablecloths, expensive wines).
  2. Private Clubs and Country Clubs
  3. Upscale
  4. Upscale casual  (good prices, fun) 
  5. Boiler plate casual
  6. Neighborhood  places
  7. Breakfast/lunch/dinner chains
  8. Fast Food

The Fire Fountain Grille will participate in the upscale casual category.