ESTABLISHING A WAY-SIDE RESTAURANT BUSINESS IN UGANDA
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 |
- Production costs assumed 312 days per year with daily capacity of selling 130plates of food, 150 bottles of beverages &80 cups of tea.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include: materials, supplies and other costs that directly go into production of the product.
- 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