an introduction of the chosen business

Introduction

This section will include an introduction of the chosen business, theme of business (e.g., type of restaurant) and rationale for choosing this type of business.

Approximate word count: 200.

Feasibility studies

This section must provide a discussion on the importance of feasibility studies in business generally and the hospitality sector specifically. It will explain why feasibility studies are required and outline the information which would normally be included. Students are also required to discuss (briefly) aspects related to financial management in the hospitality industry. All the material in this section MUST be supported by appropriate academic references (in APA format) from journal articles and textbooks, or industry reports.

Approximate word count: 400.

General market characteristics

This section will outline relevant demographic characteristics of the geographical area chosen for the business and topical information regarding the market for your proposed development, as well as other aspects as per the textbook content. This information will form the basis of the revenue assumptions in the financial analysis section below.

Approximate word count: 400.

Site evaluation

This section will describe its approximate size, location (central, peripheral, traffic flow, etc.), approximate purchase price or ongoing rental costs. A map of the location would be useful. Approximate word count: 200.

Supply and demand information/analysis

In this section, focus on the items outlined in Jagels (2007), industry reports and in the seminar PowerPoint slides regarding competitors, or demand figures. If no available information is found, use your best estimates or approximate numbers. Support the discussion with appropriate references and use industry examples or reports to support your discussion.

Approximate word count: 400

Financial analysis

This section will include projected/forecast sales/revenues and expenditures showing profit or loss, for at least 5 years. It will also include a schedule of capital expenditures required to acquire the business and undertake improvements. Contributions of equity and debt requirements need to be specified. A five year cash flow forecast is to be provided which reflects all cash receipts and payments. It is recommended that Microsoft Excel is used to prepare the financial statements.

The analysis will include break-even figures and relevant financial ratios.

All financial assumptions need to be specified and supported by references where these are available. This will include information such as number of hotel rooms, occupancy rates and room rates for accommodation businesses, or restaurant capacity, customer spend rates and seat turnover for restaurants. Labour costs should be based on actual numbers of employees and wage costs, including overheads, such as superannuation. In some cases it will be appropriate to base the assumptions on your best estimate.

Excel tables and/or graphs can be created, and provided in the body of the report or in appendices. Either way, this information needs to be discussed in the report, not just inserted.

Approximate word count: 700.

Conclusion/recommendations

The conclusion/recommendation may positive or negative, eg the proposed idea is not feasible for the reasons outlined in the report.

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