BUSINESS MANAGEMENT

LEARNING ACTIVITY 2.1.

On the basis of the best business idea chosen selected in the Study Guide N.1, you have to develop the following.

1. Define the organizational chart of the business idea proposed. Present the organizational structure chart and the
positional structure one.
Organizational Structure Chart:
An organizational chart represents lines of authority and responsibility in an organization. It gives employees guidance about the
formal outline structure of the company by the report of the relationships that govern the workflow of the company. It is important
because it help us to improve operational efficiency by showing each employee to whom she reports, what functional areas she is
responsible for and who reports to her. These clear lines of authority prevent confusion as two supervisors giving conflicting directions
to an employee.
Organizational structure is important for any growing company to provide guidance and clarity on specific human resources issues, such
as managerial authority. Small-business owners should begin thinking about a formal structure early in the growth stage of their
business.
A restaurant organizational chart
The purposes of a restaurant are to satisfy the guests and make a prot. To reach these goals, employees should work together in a
united effort. Employees are expected to perform their jobs and to support co-workers as a team. The Employees are given a job
description and assigned activities so that no work is duplicated or omitted. The size of the restaurant usually determines the ultimate
structure; staff often take on more than one role in smaller establishments, but restaurants typically have the same basic framework,
regardless of their size.
ORGANIZATIONAL CHART

DUTIES DESCRIPTION:
OWNERS
Independent restaurants commonly have a single owner.
Owners are responsible for the business finances, but often hire accountants to take care of the books.
They are also the ultimate decision makers and are accountable for the general direction of the business.
They do not need to be involved in the day-to-day operation of the restaurant.
Owners of smaller independent establishments often take on an active role in the restaurants operations.
GENERAL MANAGER
o Is responsible for the day-to-day operations of the business,
o He is responsible of hiring, training and overseeing the staff.
o He makes sure that the restaurant is maintained in proper operating condition and ensuring that things run smoothly when
the restaurant is open.
o He is responsible for totalling up the daily receipts, making sure that the restaurant comply to all legal requirements and
communicating with the restaurant owner.

CHEF
Coordinates kitchen work.
He is responsible of creating menu items, sourcing and purchasing foods and helping determine the prices the restaurant
should place on its meals.
Depending on the size of the restaurant, he may report to the general manager or to the owner directly.
Monitors and controls food costs and inventory
Prepares food in the kitchen.
Works one or more kitchen stations including grill, broil, or fry.
CASHIER
The Restaurant Cashier is in charge of the register.
Include cash and credit card transactions and balancing the register at the end of the shift.
Must be competent with computerized register system and have good cash handling skills.
Must have experience in retail sales, and be professional, polite, and reliable
WAITERS
Attends to guests and takes orders.
Offers information and suggestions about the menu.
Prepares checks and collect payment.
serve food and beverages.
Escort guests to tables.
Setting up and clearing tables.
CLEANING STAFF
Clears and cleans tables.
Pours water for guests
Responsible for maintaining dishwashing equipment.
Maintains clean dishes and other wares.
LEARNING ACTIVITY 2.2.
Prepare an interview for a business. Scan it and present the document as part of the study guide. In this interview you have to
obtain information related to the most challenging aspects in developing your own business.
INTERVIEW.
1.- What is your background? Education

2.- Can you provide me with a description of your business?

3.- What's most challenging about being a restaurant manager?

4.- What do you most enjoy about your job?

5.- What's your secret to keeping customers coming in?

6.- As a restaurant manager, how important is it to have actual experience in every aspect of the
business, as you have?

7.- What has been your greatest professional success?

8.- How can the reality of restaurant management as a career differ from typical expectations?

9.- What skills are most important for a restaurant manager job?

10.- What advice do you have for prospective culinary artists?

Explain each of them in no more than three lines each.
INTERVIEW DEVELOPMENT:
1.- What is your background? Education
Well, after finishing high School I studied in Catering School at the ESPOCH. I have always loved cooking so I went to Buenos Aires,
Argentina to take a course called Food, Education and Services Training, when I came back y decided to open a new restaurant of
which Im the manager- owner since 2005. But while I was studying I started taking courses in nutrition. When I was 25 I became a
dinner room manager in a prestigious restaurant in Riobamba.
2.- Can you provide me with a description of your business?
My business is El Fogn del Puente Its name means "The Bridge Cooker." Its a great place to have a nice family diner or a celebrate a
special occasion while listening to the piano and other classy music which give the restaurant some atmosphere. Dishes that are sure
to delight any palate, from: soups, salads, pasta, chicken, fish, steak, and shrimp. This place is sure to satisfy the whole family.
3.- What's most challenging about being a restaurant manager?
The challenge of being a restaurant owner and manager is to always try to make your business better. Being the best you can. Re-
evaluate, create, be different. Building sales is challenging. People continue to dine out, but they're more value driven, so keeping that
business going has been a challenge
4.- What do you most enjoy about your job?
I love partnering with the crew to create an incredible experience for our guests. I love building relationships with the guests. Seeing
the business growing from year to year in sales is incredibly rewarding. And when we meet our profit goals, that's very rewarding as
well.
5.- What's your secret to keeping customers coming in?
The secret is to keep people talking about your establishment in some way or another. This is where creativity is key to business; the
more creative the better. Regarding successful promotions, we have a combination of excellent dishes in small portion called the Chefs
recommendation.
6.- As a restaurant manager, how important is it to have actual experience in every aspect of the business, as you have?
Restaurant management experience only comes with time. The more experience you have, the better seasoned you are. The more you
learn about the restaurant, the more valuable you are - not only to yourself, but to any company.
7.- What has been your greatest professional success?
My greatest professional success has been to believe in myself. I just keep moving forward.
8.- How can the reality of restaurant management as a career differ from typical expectations?
What you read in a book about what a manager is versus what you experience is completely different. But each experience is different,
based on the circumstance and how it was delivered by that individual. Learn by doing is the best motto for restaurant experience.
9.- What skills are most important for a restaurant manager job?
You've got to have personality. That's not a skill, but it's important because we're in the people business. We're selling a product that
our guests come to enjoy, and hopefully, they'll leave with a memorable experience. It takes somebody that is completely passionate
and excited, who has a love for food and people. You need financial understanding to write budgets, strategic ability to see the big
picture, food and wine knowledge, organization, and flexibility. And lots of stamina.
10.- What advice do you have for prospective culinary artists?
If you don't love it don't do it!. It takes a lot of determination to try out your skills and allow people to love it or hate it . So you have to
give it your best. Love your profession and be prepared to show it.

LEARNING ACTIVITY 2.3.
Present the Executive Summary of your Business Plan. Mention all the important aspects that potential investors may consider
important to invest and support your idea
EXECUTIVE SUMMARY
THE ESTABLISHMENT OF A RESTAURANT FOR STUDENTS OF THE POLYTECHNIC SCHOOL OF CHIMBORAZO IN RIOBAMBA CITY In
todays highly competitive environment, it is becoming increasingly difficult differentiate from one restaurant to another, Out to Lunch,
real food real choices is the only restaurant with healthy choices available for students of the Polytechnic School of Chimborazo which
in recent years has been significantly increasing the number of students, therefore the needs increase. This restaurant business plan is
created with the purpose to obtain financing for the initial launch of the restaurant. The financing is required to begin work with
kitchen design, equipment purchase, manuals and recipe books and to cover the various expenses of the first year of operation.
This financing, plus the capital contributions of the owners will allow Out to lunch to successfully open and maintain through the first
year. It will provide customers with a value driven, entertaining food experience by providing an innovate environment to eat and
socialize.
The Market
Out to Lunch, real food real choices will be operating within t the restaurant industry, competing against fast food and traditional
sit down restaurants.
Services and Products
Out to Lunch, real food real choices will provide a different lunch experience. All people will receive excellent customer service,
encouraging them to return. The menu offerings are fast, simple, healthy, and easy to prepare.
Management
The Lcda. Ana Dillon has spent seven years in the restaurant industry. Ana has studied in the in Catering School at the ESPOCH.
1.1 Mission
Out to Lunch, real food real choices mission is to become the premier healthy lunch experience. This will be accomplished by
offering an unprecedented experience coupled with great food and reasonable prices.
1.2 Objectives
To become the best healthy food restaurant in the Riobamba city.
To open a new restaurant in a no very long time.
To offer high-quality food and a wonderful experience at reasonable prices.
1.3 Keys to Success
Offer simple, delicious menu items
.Treat every customer as if they are the only customer.
Design and employ financial controls.
2.- Company Summary
Out to Lunch, real food real choices is a new restaurant that will be established near the Polytechnic School in the Riobamba City.
Quality Food.-
We will serve nothing but fresh meats, crisp salads, delectable healthy dishes. We want to make students aware of the importance of
eating well. Having a healthy relationship with food is crucial to your health and well-being. Its not about strict regimes or calorie
counting, but it is about enjoyment, balance and sensible decisions.
Variety.-
We offer a different menu for every day of the week. So people wont get bored with the menu.

Friendly employees .-
Our employees will be friendly and eager to help customer with whatever they need. They will be appropriately dressed and trained to
make customer feel comfortable.

Youthful and fresh surroundings .- Our target market are the student of the Polytechnic School of Chimborazo, which ages are
between 18 to 25. Our store will be decorated with healthy food setting, such as a bright counter and display menu on the wall. We will
also offer different kinds of music according to the customers preferences.

2.2 Company Ownership.- The Family Iguasnia Vallejo is the main shareholder. Rodrigo Iguasnia has more than 10 years of
experience as a manager of the Home Solutions company in the Riobamba city. Mery Vallejo has a degree from the ESPOCH
University in Business Administration.
2.3.- Start up Summary
The restaurant will be located on the Pedro Vicente Maldonado Avenue and Manuel Galvan street, at two blocks from the Polytechnic
School main entrance where is located our target market. The business will operate in the building of he owner so there wont be the
necessity to pay rent.
Start-up
Requirements
Start-up Expenses
Kitchen and Fixtures
Furniture and Interior
Legal
Contingencies
Design of Logo
Manuals, handbooks, recipes
Recruiter Fees/Help Wanted Ads
Uniforms
Total Start-up Expenses





12,000
8,000
1,000
4,000
500
1,400
2,000
600
29,500
2.4.- Company Locations and facilities.
Out to Lunch, real food real choices location will range in size from 80 100 meter square and will seat from 25 50 guests. The
location will feature its own originality in merchandise display and other brand building attributes. We will equip the outlet with
modern furniture and aim for cleanliness and an open feeling. The space selection have been chosen based upon the nearness to the
Polytechnic School of Chimborazo.
All of these qualities are consistent Out to Lunch, real food real choices goal of providing a top quality healthy food experience.
We want "word-of-mouth" to be our best form of marketing, where our customers value our brand as something exciting and cannot
wait to tell their friends and neighbors.
3.- Products
3.1.- Main Product:
The main product of the restaurant will be lunch and dinner, because most students make their own breakfast, but as they dont have
the time to cook lunch and dinner, the restaurant will offer healthy choices to the two meals. We want to focus only on selling food.
Alcoholic drinks will not be sold in our outlet, as we promote a healthy and positive lifestyle. Instead, we will offer a variety of juices to
complement the food. In promoting the Out to Lunch, real food real choices lifestyle, we will offer various merchandise with our
logo and colors, from hats to t-shirts to potato cutters to our signature sauces, so that our customers can enjoy.
3.2.-Product Description
Our product is like a promise, it will help us to set customer expectations. When students consume our product they will see that their
expectations are fulfilled. It also will help us to students to remember our product-service, and will make easier for current clients or
customers to refer us to others.
Presentation:
Our presentation will be based on healthy food consumption. When you students come to university it may be the first time they've
lived away from home and been fully independent. To have enough energy to study and enjoy student life to the full they need to eat
regularly and healthily.
3.3.- Competitive Comparison
Out to Lunch, real food real choices will have broad customer appeal due to our casual family atmosphere, wide variety of food
offerings, and low price points. We will not only compete with the casual restaurants, but also with the family value restaurants.
In competing against the casual theme restaurants, we will have the following advantages:
Lower price point for a complete meal.
Speed of service will be instant:. Everything will be readily available: hot, juicy, fresh, and cooked as requested.
Our portions will be "just right
Variety is the our purpose. Guests will choose from over a variety of items prepared fresh daily.
In competing against the family value restaurants, we will have the following advantages:
We will serve better quality food than our competitors.
We will offer a lower price point at lunch than our competition and feature a fresh hot and juicy off our display of food. Our
guest could pay the same price at a quick service restaurant, but only receive junk food.
Our surroundings will be more entertaining than our competitors.
3.4.- Sales Literature
Out to Lunch, real food real choices will use advertising and sales programs to get the word out to customers:
2,000 color brochures to be distributed throughout the Polytechnic School facilities and other sites like cinemas, area
eateries, etc.
Half page of advertising in the newspaper La Prensa of the Riobamba city.
Table Toppers will explain concept and differences between lunch/dinner
Brochures/Handouts will explain that we can handle large parties, banquets; another will list our daily featured entrees.
Direct Mail Piece will explain our concept, list prices, and show inside photographs of our restaurant.
3.5.-Technology
We will invest in a single high-speed computer to provide a fast and efficient connection to the Internet and also be a link to our cash
registers. We will also order online, email, and have a Web page.
3.6 Future Products
For now, we will focus on selling healthy choices at lunch and dinner. However, as we grow further, we will add new categories to our
menu, such as Sandwiches and Salads to take away.
In the future, our growth strategy will be offering the franchise of our brand to food entrepreneurs in the region.
Private Parties
Brochures and handouts will explain that we can handle banquets and private parties, in addition to our brochure that will list our daily
entrees.
4.- Market Analysis Summary
Consumer expenditures for food in Riobamba rose during the end of the year 2012. The increasing number of new establishments such
as fast food franchises, fancy restaurants and gourmet bakeries around Riobamba has shown a significant growth in this sector. Food
spending is around 56% of total consumer expenditures in Riobamba, and consumer spending on leisure and recreation made up of
13% of total consumer spending.
Our targeted market segments are:
Age - Youngsters, single, currently enrolled in the Polytechnic School or the University .
Family unit - We will also appeal to families (young families) with children.
Gender - We will target both sexes, with a slight skew for females due to their increased attention to dietary concerns.
Income - We will appeal to the medium income individuals and to all in the lower medium income bracket.
Parents give more money to kids and students to buy lunch.
4.1 Market Segmentation
We are targeting young Students of the Polytechnic school of Riobamba as our primary market. They generally hang out around the
School building. Due to heavy extra-curricular activities among students, it is common for them to have near the School, and not at
home.
Our secondary market segment are the people who is aware of the benefits of eating healthy and that are concert about their health all
over Riobamba city. Being Riobamba a small city there is not much problem about time spending in travelling.
4.2.- Service Business Analysis
While the industry has its upswings and downturns, the variance is less than the economy itself. People need to eat, they can eat in and
save money, but the convenience of dining out creates a significant incentive. This is not to suggest that restaurants are recession
proof, they are less affected by the general state of the economy.
Strategy and Implementation Summary
At first, we will open one restaurant near de Polytechnic School . This will become our market testing area, and as we go further, we are
planning to open another in nearby. In attracting customers to try our food, we will provide a see-through kitchen, so that people will
see how we are committed to freshness in our products. The kitchen will also let out an aroma of our freshly food into the surroundings
area, so that people will come and try our products.
Marketing Strategy A combination of local media and local store marketing programs will be utilized at each location. Local store
marketing is most effective, followed by radio, then print. We believe, however, that the best form of advertising is still "word-of-
mouth." By providing an entertaining environment, with unbeatable quality at an unbelievable price in a clean and friendly restaurant,
we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan.
Marketing Programs
Word Of Mouth/In-Store Marketing Table tents. Wall posters. Outdoor marquee message changed weekly.
Grand Opening celebration. Yearly birthday parties. School programs - perfect attendance, honor roll.
Local Media Direct mail piece - containing interior pictures of our restaurant, our prices.
Newspaper campaign - placing several large ads throughout the month to explain our concept to the local area.
Positioning Statement
Our main focus in marketing will be to increase customer awareness in the surrounding community. We will direct all of our tactics and
programs toward the goal of explaining who we are and what we are all about. We will price our products fairly, keep our standards
high, and execute the concept so that word-of-mouth will be our main marketing force.
Sales Strategy
The sales strategy is to build and open new locations, through the awareness of people about the importance of a healthy diet.
Sales Programs Grand Opening.- We will have outdoor signs in place as soon as possible. We want the road be aware that something
new and exciting is coming to the neighborhood. At the grand opening, we will attach rows of pennants to our building, outdoor sign,
and pole lights to attract attention. All of this is low cost but has proven to be highly successful.
Point of Purchase.- We will use table toppers to explain the concept and differences between lunch/dinner, sell gift certificates,
announce job openings, and possibly mention franchise opportunities. Another brochure will list our daily featured entrees.
Management Summary
The executive summary is very important because it sums up the general idea of what your business is about because it is a complete
and concise business plan which main objective is to attract and keep the attention of the investors and people interested on your
business idea to go through the entire plan.
Being a executive summary a short statement of the prominent lineaments of your business, it would give a clearly description of the
business including the key strengths that would make of it a successful business, it also should include the vision, mission and objective
statement and a business overview, marketing analysis, who your customers are, operational plan, and management team.
The initial management team depends on the owners themselves, with little back-up. As we grow, we will take on additional help in
certain key areas. We will not add additional overhead until absolutely necessary. By doing this, we will keep our overhead as low as
possible. This will also allow our business partners to recoup their initial investments as quickly as possible and enjoy a higher return.
Organizational Structure We plan to have our accounting and payroll functions done by a contracted bookkeeping service. However,
we will constantly monitor this expense and at such time that it is economically feasible, bring this function in-house.
Management Team Gaps Temporary help has been secured that will assist in the administrative assistant area. This individual will work
on the development of all training materials and manuals plus do our correspondence.
7.3 Personnel Plan
is the management process of an organization's workforce, or human resources. It is responsible for the attraction, selection, training,
assessment, and rewarding of employees, while also overseeing organizational leadership and culture and ensuring compliance with
employment and labor laws.
Our initial employees will include one cashiers, one cook and one bus boys. This is considered an ideal personnel number for a food
outlet the size of our own. Each employee will work for 38-40 hours per week.
In the long run, as we expand our product category and grow we will employ more people in the middle management to ensure the
focus of our work.
Personnel Plan

Year 1 Year 2 Year 3
Site Manager $0 $6,000 $6,240
Cashier $4,200 $ 4,620 4,912
Cook $6,000 $6,520 $6,824
Busboy $3,840 $3,908 $4,030
Total Payroll $14,040 $21,041 $22,006
LEARNING ACTIVITY 2.4. Based on the business idea you proposed prepare:
CASH FLOW
DETAIL

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
INVESTMENT

$ 12,000
SALES

$ 18,400 $22,080 $ 26,496 $ 31,795 $ 38,154
PRODUCTION
COSTS
$ 16,370 $19,644 $ 23,572 $ 28,286 $ 33,943
NET UTILITY

$ 2,030 $ 2,436 $ 2,924 $ 3,509 $ 4,211
BALANCE SHEET

YEAR 0

YEAR 1
YEAR
2

YEAR 3
ASSETS
CURRENT ASSETS
CASH
OTHER CURRENT ASSETS
TOTAL CURRENT ASSES
LONG TERM ASSETS
ACUMULATED DEPRECIATION
TOTAL ASSETS
LIABILITIES AND CAPITAL
CURRENT LIABILITIES
ACCOUNTS PAYABLE
TOTAL LIABILITIES
PAID IN CAPITAL
TOTAL CAPITAL
TOTAL LIABILITIES AND CAPITAL
NET WORTH







$ 2,030
$ 15,000
$ 17,030

$ 100
$ 16,930


$ 5,000

$ 5,000
$ 11,930
$ 16,930
$ 11,930


$ 2,436
$ 15,000
$ 17,436

$ 205
$ 17,231


$ 7,500

$ 5,000
$ 9,731
$ 17,231
$ 9,731


$ 2,924
$ 15,000
$ 17,924

$ 315
$ 17,609


$ 8,300

$ 5,000
$ 9,309
$ 17,609
$ 9,309

Cash flow.- In business as in personal finance, cash flows are essential to solvency. They can be presented as a record of something that
has happened in the past, such as the sale of a particular product, or forecasted into the future, representing what a business or a
person expects to take in and to spend. Cash flow is crucial to an entity's survival. Having ample cash on hand will ensure that creditors,
employees and others can be paid on time.
The balance sheet presents a company's financial position at the end of a specified date. Some describe the balance sheet as a
"snapshot" of the company's financial position at a point (a moment or an instant) in time. For example, the amounts reported on a
balance sheet dated December 31, 2012 reflect that instant when all the transactions through December 31 have been recorded