Lounge 264 - Nightclub -Sample Restaurant Business Plan

38 © BPLANEXPERTS.COM Risk and Mitigation Barriers to Entry – The barriers to entry in the top end hospitality industry can be described as high. High capital costs and ability to sustain the business are the biggest barriers to entering the industry Mitigation – The company will use a two pronged strategy to create a sustainable model. It will focus all its resources into making its flagship lounge financially viable before embarking on any expansion plans. Also, it will look at franchising as an expansion strategy in order to reduce its capital exposure. Competition – Competition is strong in the high end hospitality and lounge sector. There are a large number of well established brands with a loyal and committed clientele. Mitigation – Lounge 264 has identified its target audience, service offering and operational mode, which it feels will help to differentiate its services from the rest. Customer membership programs will be launched and will include reward programs including corporate leasure sessions at exotic resorts. In addition, the founder will be using his contacts to get an initial foothold in the market. Recent Industry Growth – Recent industry trends have shown that there is a demand for high end lounges in the US and globally. Mitigation – While industry trends are encouraging, the company is aware that to create a strong foothold in the market its products and services need to be of high quality and customer relationships at the top end of the market. Interest Rates – Interest rates globally has remain flat. Any increase in interest rates may impact the financial model Mitigation – The company hopes to generate strong internal accurals and reduce the dependency on debt borrowing. The company is also open to equity dilution should there be a requirement to do so. Government Regulations – Government regulations may have a major impact on the business. Mitigation – This will impact all players in the industry and something that the company will have to accept as a business risk. (http://www.reportlinker.com/p0157225/Management ‐ Consultants ‐ in ‐ Australia ‐ Industry ‐ Risk ‐ Rating ‐ Report.html)