ESTABLISHING A WAY-SIDE RESTAURANT BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

There is high demand for food and beverages in Uganda. Any attempt in establishing a modern restaurant can prove to be a profitable business especially when it’s located in a good area. The establishment of this project requires a total fixed cost of US$16,300, and operating costs of US$ 98676, generating revenue of US$ 242,040 in the first year of operation.

Production Capacity, Technology &Process

The production process involves preparation of food, beverages and snacks.

Capital Requirements & Equipment

The investment scale basically depends on the desired objectives of the entrepreneur. However, the following equipment can be used in the project establishment.

Capital Investment Requirements in US$

Capital investment item Units Qty @ Total
Fridges No 3 400 1,200
Cutlery Sets 60 20 1,200
Furniture No 1,000
Cooking Equipments No 500 500
Music System, TV & Computer No 3 500 1,500
Blenders, food warmers, juice No 6 150 900
mixers &flasks       250
Delivery Van No 1 7,000 7,000
Bouquet set Sets 2 350 700
Gas and water tanks No 500
Decoration materials, empty crates No 550
Standby generator No 1 800 800
Other equipments   200
Total       16,300
  1. Production costs assumed 312 days per year with daily capacity of selling 130plates of food, 150 bottles of beverages &80 cups of tea.
  2. Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
  3. Direct costs include: materials, supplies and other costs that directly go into production of the product.
  4. Total monthly days assumed are 26-days.

Production and Operating Costs

(a)Direct Materials, Supplies and Costs $

Cost Item Units Unit Qty/ Pdn cost/ Pdn cost/ Pdn cost/
        day month Year
Food Items Bchs 80 2,080 24,960
Sauce Items Kgs 70 1,820 21,840
Beverages Cts 50 1300 15,600
Spices, Cooking oil, Sugar etc (seasonings) Kgs 30 780 9,360
Other materials     6 156 1,872
Sub-total     236 6,136 73,632
General Costs (Overheads)        
Labour         300 3,600
Utilities         400 4,800
Gas & Charcoal         200 2,400
Uniforms         35 420
Cleaning & Toiletries         100 1,200
Rent         500 6,000
Miscellaneous expenses         100 1,200
Depreciation         452 5,424
Sub-total         2,087 25,044
Total Operating Costs         8,223 98,676

Project Product Costs and Price Structure

Item Qty/ day Qty/yr @ Pdn cost/ yr UPx T/rev
Foods 150 47,400 1.7 79,560 3 142,200
Beverages 150 46,800 0.4 18,720 1.6 74,880
Tea 80 24,960 0.8 19,968 1 24,960
Total   119,160   98,676   242,040

Profitability Analysis Table

Profitability Item Per Day Per Month Per Year
Revenue 775.8 20,170 242,040
Less: Pdn & Operating Costs 316.3 8,223 98,676
Profit 459.5 11,947 143,364
       

Market Analysis

The market readily exists as food products are consumed by everybody & combined with outside catering services. T he business can be a viable venture.

Government facilities and incentives

Generally, there are no set government incentives on restaurants but prosperity for all programs can be an intervention program.

Production and Operating cost in US $

(a)Direct materials, supplies and costs

 

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