I. Background and motivation.

As students who study economics, we often come up with business ideas that are derived from
our observations and experiences in life. These ideas evolve over time as we combine our
accumulated knowledge with what we encounter in the world around us.
Based on our recent observations, we have noticed that:
- Background: The desire for interaction, communication, and gatherings amongst the youth is
on the rise. Recently, there has been an increasing trend of universities relocating to the
suburban areas of Hanoi. This move has led to numerous projects being developed, resulting in
significant economic progress within the region. The growth of universities, colleges, and
industrial parks has played a role in promoting the development of the service industry.
As a result of this trend, the demand for food products, especially amongst young people such
as students and working individuals, has been steadily increasing. These subjects tend to enjoy
congregating with friends after school or work to unwind, relieve stress, and partake in social
activities accompanied by food. To cater to this demand, it would be ideal to establish suitable
models, ideally located near universities and bustling streets.
Currently, there are not many Korean restaurants established in Hoa Lac. The food and
beverage business carries low investment costs but yields high profits and short payback
periods.
- Solution: To meet this demand, our group allocated personal relationships, resources, and
initial capital within a set timeframe to conduct research on the Hanoi market, specifically Hoa
Lac. After careful consideration, we decided to open the Hwa shop on Highway 21, next to the
gas station 39, in close proximity to Vietnam National University and FPT University student
dormitories and residential areas. Hwa is a vintage-style Korean restaurant that offers Korean-
style chicken, rice, and noodles at reasonable prices, without using frozen food.
- Market: Our target market is middle-income students who seek a space to unwind and try
Korean cuisine at affordable prices with stable quality. Our competitors include direct and
indirect players in the food industry, ranging from casual dining to high-end branded grills, as
well as coffee shops, lemon tea, and milk tea establishments. Factors such as price, quality, and
customer service significantly impact customers' choices.
- Mission: Hwa's mission is to provide quality food and drinks at affordable prices while
attracting and retaining customers by exceeding their expectations through exceptional service.
We anticipate profitability during our second year of operation.
- Expectation: We will be profitable in the second year.

II. Management plan and marketing.

1. SWOT
- Strength:
+ By investing in the restaurant's interior design, Hwa can provide customers with a
comfortable and cozy space to enjoy their culinary experience.
+ The main customers of the restaurant are students and office workers who seek a peaceful
environment to have meals or host gatherings with friends and family. Hwa offers competitive
prices ranging from 15,000 to 330,000 which are suitable for the target audience.
+ The staff has been carefully selected and trained to understand customer needs and
preferences, along with knowledge about food quality and processing methods.
+ Hwa's strategic location on Highway 21 attracts more customers and guests to the restaurant.
- Weakness:
+ Small and medium-sized food businesses have a hard time competing with giants with well-
known names and brands that have existed for a long time.
+ Since this restaurant has just opened, it will have to spend money on advertising to attract a
significant number of customers.
+ Customers do not often go to parties, and only drink when there are special occasions.
- Opportunity:
+ There is a high demand in modern society for new styles of Korean food with unique and
impressive flavors.
+ The Korean food industry is ideal for year-round operation and suits all seasons. Hwa is not
just a place to eat and drink, but also a popular location for young people to meet, socialize,
study, and work together.
+ With the development of new cities like Hoa Lac, more people are seeking employment
opportunities and ways to cope with stress. Hwa was created as a drink restaurant that
provides customers with a space to relieve stress, gather with friends, and enjoy meals. The
creation of “Hwa” was driven by customer demand.
+ Hwa's, a new grill, will have a challenging time competing with well-established and larger
restaurants that already have a loyal customer base and market share. Additionally, Hwa will
face competition in terms of price, quality, and service.
2. Planning a marketing strategy for a project
• Stage 1: Market penetration
- Join culinary groups FU - Hoa Lac, Ship do an Hoa Lac – Hola 24/7,..." As a result, advertising
and promoting the restaurant will attract a large number of potential customers.
- Create a Facebook, or Instagram fanpage for your store, where you can post products, sign up
and pay for ads to reach users more effectively.
- Hire tiktok reviewers to promote the shop.
- Create a website to list menus and promotions.
• Stage 2: User Experience
- Customers will benefit from tasting all of the store's dishes (expenses included in marketing
costs) and will reach more customers.
• Stage 3: Building relationships with customers
- Hwa trains employees to be knowledgeable about the restaurant's dishes, ingredients, and
food, knowing how to capture customer psychology and provide attentive service. Bringing a
comfortable relaxing space and attentive service staff.
3. Management plan
a. Location
The location we chose is on Highway 21 near FPT University and Hanoi National University of
Foreign Languages. The space has:
- Indoor area 80m2, cool, prime location.
- Can park motorbikes and other vehicles on the sidewalks wide enough.
- Monthly rent is 25 million VND.
- Deposit 6 months in advance with a total cost of 150 million VND.
- Utilities: there is a water and electricity system, and lights, so there is not much to repair.

OTHER INITIAL      
INVESTMENT
Cost per Total
No. ITEM Unit
unit Amount
1 Deposit for space rental 6 month 30000000 180000000
Total 180000000

b. Staff
- The shop has a team of 18 staff members who work full-time. This includes two managers
(who also act as cashiers and auditors), two chefs, four kitchen assistants, two security
personnel, six waiters for service, and two cleaners.
- To ensure high-quality employees are recruited and retained, all workers are offered an
above-average initial salary for the area. Additionally, there may be instances where employees
provide assistance in other positions.

LABOUR COST
No
  Number Salary/month Month Year
.
1 Chef 2 15.000.000 12 360.000.000
2 Vice-cook 4 8.000.000 12 384.000.000
3 Waiter 6 6.000.000 12 432.000.000
4 Sanitation worker 2 4.500.000 12 108.000.000
5 Management staff 2 12.000.000 12 288.000.000
6 Guard 2 5.000.000 12 120.000.000
Total 1.692.000.000

- As all the employees work full-time and receive a monthly salary, the cost of payroll is
considered a fixed expense. There are plans to introduce appropriate policies for salary
increases in the future based on the store's financial situation and the contributions made by
the employees. These scenarios have been outlined below.
c. Equipment
- Assets to buy include uniforms; air conditioning; cash register system; fridge; television,
camera, furniture, fire alarm system, etc. listed, with costs referred to in the table below.

INITIAL COST OF NEW ASSETS      

(CAPEX)
Uni
No. Item Cost/unit Total
t
1 Fridge 1 15.000.000 ₫ 15.000.000
2 Air conditioning 4 6.000.000 ₫ 24.000.000
3 Cash register 1 5.000.000 ₫ 5.000.000
4 Renovating rented premises 1 100.000.000 ₫ 100.000.000
5 Furniture 35 300.000 đ 10.500.000
6 Camera 4 4.000.000 ₫ 16.000.000
7 Fire alarm system 1 8.000.000 ₫ 8.000.000
8 Television 2 15.000.000 ₫ 30.000.000
9 Uniforms 20 200.000 ₫ 4.000.000
 10 Insulation cabinet 3 8.000.000 ₫ 24.000.000
11 Kitchen tools 1 15.000.000 ₫ 15.000.000
12 Exhaust and ventilation system 1 30.000.000 ₫ 30.000.000
13 Kitchen system 1 200.000.000 ₫ 200.000.000
14 Clean water system 1 50.000.000 ₫ 50.000.000
Total 531.500.000

d. Cost of goods sold

- The cost of goods sold in the store will range from 40 to almost 50% of the total sales
depending on the product. In the first year, the total cost of goods sold is estimated to be
3,974,850,000 VND, which is quite high. This is because the main objective of the project is to
offer the finest quality products and services to customers, thereby ensuring a competitive
edge and retaining customers while building a loyal and stable customer base.

COST OF GOODS SOLD

N Quantit Total Total
ITEM Cost
o y cost/day cost/year
1 Alcohol (350 ml) 40 13.000 520.000 189.800.000
2 Beer 100 8.000 800.000 292.000.000
3 Fried rice 30 20.000 600.000 219.000.000
Hot Pot (4
4 5 220.000 1.100.000 401.500.000
People)
Hot Pot (6
5 6 270.000 1.620.000 591.300.000
People)
Grilled (4
6 6 210.000 1.260.000 459.900.000
Persons)
7 Grilled (6 People) 7 270.000 1.890.000 689.850.000
8 Roasted chicken 5 180.000 900.000 328.500.000
9 Peanut 50 6.000 300.000 109.500.000
10 Beef pole 10 60.000 600.000 219.000.000
11 Fried Tofu 40 10.000 400.000 146.000.000
12 Side dishes 50 18.000 900.000 328.500.000
Total 10.890.000 3.974.850.000

e. Depreciation cost
- It is expected that all products will have a useful life of 5 years and will not be sold off after
this period. The table below provides details of the depreciation costs.

DEPRECIATION      
ALLOCATION
No Estimated Usefull Depreciation
Capital assets Cost
. life (year) expense per year
1 Fridge 15.000.000 5 3.000.000
2 Air conditioning 24.000.000 5 4.800.000
3 Cash register 5.000.000 5 1.000.000
4 Renovating rented premises 100.000.000 5 20.000.000
5 Furniture 10.500.000 5 2.100.000
6 Camera 16.000.000 5 3.200.000
7 Fire alarm system 8.000.000 5 1.600.000
8 Television 30.000.000 5 6.000.000
9 Uniforms 4.000.000 5 800.000
10 Insulation cabinet 24.000.000 5 4.800.000
11 Kitchen tools 15.000.000 5 3.000.000
Exhaust and ventilation
12 30.000.000 5 6.000.000
system
13 Kitchen system 200.000.000 5 40.000.000
14 Clean water system 50.000.000 5 10.000.000
Total 106.300.000

=> The annual depreciation expense is 106.300.000 VND.

4. Financial plan
a. Initial Investment
- The costs to start the project have been gathered from various sources and are presented in
the table below.

INITIAL COST OF NEW ASSETS      

(CAPEX)
Uni
No. Item Cost/unit Total
t
1 Fridge 1 15.000.000 ₫ 15.000.000
 2 Air conditioning 4 6.000.000 ₫ 24.000.000
3 Cash register 1 5.000.000 ₫ 5.000.000
4 Renovating rented premises 1 100.000.000 ₫ 100.000.000
5 Furniture 35 300.000 đ 10.500.000
6 Camera 4 4.000.000 ₫ 16.000.000
7 Fire alarm system 1 8.000.000 ₫ 8.000.000
8 Television 2 15.000.000 ₫ 30.000.000
9 Uniforms 20 200.000 ₫ 4.000.000
10 Insulation cabinet 3 8.000.000 ₫ 24.000.000
11 Kitchen tools 1 15.000.000 ₫ 15.000.000
12 Exhaust and ventilation system 1 30.000.000 ₫ 30.000.000
13 Kitchen system 1 200.000.000 ₫ 200.000.000
14 Clean water system 1 50.000.000 ₫ 50.000.000
Total 531.500.000

OTHER INITIAL      
INVESTMENT
Cost per Total
No. ITEM Unit
unit Amount
1 Deposit for space rental 6 month 30000000 180000000
Total 180000000

=> Total initial investment for the project is 711.500.000 VND

b. Forecast Project Revenues And Operating Expenses
- For the operating costs of the project, there are 2 types of costs: fixed costs and variable costs.

 The variable costs

Variable cost
no. Expenses Amount per month Total per year
1 COGS 331.237.500 3.974.850.000
2 Utility cost 10.000.000 120.000.000
3 Marketing expense 35.881.325 430.575.900
 Total 377.118.825 4.525.425.900
- This cost is subject to change depending on the business conditions of the project. Therefore,
the actual cost may differ from the initial estimation when the project is put into operation. The
projected total variable expense for the first year of the project is 4,525,425,900 VND.
 Fixed costs

Fixed cost
N
Expense Mount per month Total per year
o
1 Labor cost 141.000.000 1.692.000.000
2 Maintenance expense 1.000.000 12000000
3 Management fee 180.000 2160000
4 Rental expense 25.000.000 300.000.000
Total 167.180.000 2.006.160.000

- Irrespective of the business performance, this expense is obligatory and the project owner is
accountable for settling it. The total variable expenses in the first year are predicted to be VND
2,006,160,000 and will remain constant throughout the actual execution of the project.

c. Operating cost
- The complete cost of running the project in the initial year is 4,750,334,500 Vietnamese dong.
In order to assess the profitability of the investment and determine if it is worthwhile, we
provide 3 distinct scenarios that enable the estimation of the profit earned before accounting
for any potential risks.
 Scenario 1:
+ With a very good business situation.
+ Possibility is 30%.
+ Revenue growth from year 2 is 20%; 15%; 10%; 5% per year.
+ Annual salary increase by 5% per year.
+ Utility increase by 5% annually.
 Scenario 2:
+ With a good business situation.
+ Possibility is 35%.
+ Revenue growth from year 2 is 10%; 10%; 5%; 2% per year.
+ Annual salary increase by 2% per year.
+ Utility increase by 2% annually.

 Scenario 3:
+ With a not very good business situation.
+ Possibility is 35%.
+ Revenue growth from year 2 is 5%; 0%; -2%; -2% per year.
+ Annual salary cost unchanged.
+ Utilities unchanged.
- All scenarios consider that extra investment will be made in the third year and Working Capital
will increase by VND 150 million.
- Additionally, there is a recurrent cost of VND 20 million for the yearly refurbishment of the
shop according to the seasonal theme and festival.
- The Project's Operating Revenue and Expense Forecast, which is included in the attached Excel
file, has been established based on the analysis of possible scenarios while also considering
risks and returns to determine the feasibility of investing in the project.

d. Estimated Cash Flow

- From the 3 scenarios that have been built, 3 specific estimated cash flows can be calculated as
follows.
Scenario 1:

Scenario 1
NPV and IRR CALCULATIONS
Year Cash flow
0 -711.500.000
1 509.131.280
2 879.985.536
3 1.052.882.366
4 1.428.873.803
5 1.693.214.493
Estimated Cost of capital 15%
Possibility 0,30
NPV 2.747.695.678
 IRR 105%
PAYBACK PERIOD
(year) 1,230

DISCOUNTED PAYBACK PERIOD

DISCOUNTED CUMULATIVE
Year NCF
NCF NCF
0 -711.500.000 -711.500.000 -711.500.000
1 509.131.280 442.722.852 -268.777.148
2 879.985.536 665.395.490 396.618.343
3 1.052.882.366 692.287.247 1.088.905.589
4 1.428.873.803 816.963.234 1.905.868.824
5 1.693.214.493 841.826.854 2.747.695.678
Estimated Cost of capital (15%)
DISCOUNTED PAYBACK
1,404
PERIOD (year)
PROFITABILITY INDEX (PI) 4,86

- In all three scenarios, if the business situation is very favorable, it is not surprising that
scenario 1 has the highest indicators. The project's NPV after 5 years of investment can reach
up to 2,747,695,678 VND and its Profitability Index is 4.86, indicating that the project's
profitability in this scenario is undeniable. Additionally, the project's IRR is also impressive at
105%.
- A high IRR indicates a high rate of return, which means that the project has potential and is
worth investing in. When the IRR exceeds the discounted value of the project, it proves that the
project is viable. Furthermore, scenario 1 has the fastest payback time among all scenarios with
a Payback Period of 1,230 years and a Discounted Payback Period of 1,404 years.

Scenario 2:

Scenario 2
NPV and IRR CALCULATIONS
Year Cash flow
0 -711.500.000
1 509.131.280
2 701.806.408
 3 766.068.409
4 1.020.013.744
5 2.833.691.135
Estimated Cost of capital 15%
Possibility 0,35
NPV 2.757.633.214
IRR 96%
PAYBACK PERIOD
(year) 1,348

DISCOUNTED PAYBACK PERIOD

CUMULATIVE
NCF DISCOUNTED NCF
NCF
-711.500.000 -711.500.000 -711.500.000
509.131.280 442.722.852 -268.777.148
701.806.408 530.666.471 261.889.323
766.068.409 503.702.414 765.591.737
1.020.013.744 583.196.169 1.348.787.906
2.833.691.135 1.408.845.307 2.757.633.214
Estimated Cost of capital (15%)
DISCOUNTED PAYBACK
1,480
PERIOD (year)
PROFITABILITY INDEX (PI) 4,88

- Based on the favorable business situation described earlier, Scenario 2 of the project has
yielded impressive results. After a 5-year investment, the net present value (NPV) reached
2,757,633,214 VND and the internal rate of return (IRR) was a remarkable 96%. These figures
demonstrate the undeniable potential and profitability of the project, making it a worthwhile
investment. Additionally, the Profitability Index was extremely high at 4.88.
- In this scenario, the payback rate was also the fastest, with the project being able to recoup its
capital in just the second year. Specifically, the Payback Period amounted to 1,348 years and
the Discounted Payback Period was 1,480 years.

Scenario 3:

Scenario 3
 NPV and IRR CALCULATIONS
Year Cash flow
0 -711.500.000
1 394.311.040
2 619.964.844
3 349.403.592
4 455.264.720
5 592.008.626
Estimated Cost of capital 15%
Possibility 0,35
NPV 884.532.187
IRR 59%
PAYBACK PERIOD
(year) 1,133

DISCOUNTED PAYBACK PERIOD

DISCOUNTED CUMULATIVE
Year NCF
NCF NCF
0 -711.500.000 -711.500.000 -711.500.000
1 394.311.040 342.879.165 -368.620.835
2 619.964.844 468.782.491 100.161.656
3 349.403.592 229.738.533 329.900.189
4 455.264.720 260.299.081 590.199.271
5 592.008.626 294.332.916 884.532.187
Estimated Cost of capital (15%)
DISCOUNTED PAYBACK
1,733
PERIOD (year)
PROFITABILITY INDEX (PI) 2,24

- In Scenario 3, the business situation is assumed to be unfavorable as the revenue gradually

decreases over the years. Despite this, the measured indicators in this scenario are not bad. The
NPV amounted to 884,532,187 VND, which is the lowest among the three scenarios; however,
it remains positive, indicating that the business still generates profit. Although the Profitability
Index of the project is not too impressive at 2.24, it shows that the project is still profitable. The
IRR was up to 59% despite being placed in an unfavorable business case, demonstrating that
the potential of the project is not low. The payback period in this scenario is the longest among
the three scenarios, with the possibility of recouping capital in the third year. Specifically, the
Payback Period is 1.133 years and the Discounted Payback Period is 2.24 years. Although slower
than the other scenarios, this rate of return is still considered quite fast.
- We have included the specific details of the Estimated Cash Flow for all three scenarios in an
Excel file for your convenience. We have calculated the NPV, IRR, and Payback Periods for all
three possible scenarios to measure the "Risk" and "Return" through specific parameters.

Expected Return 2.099.066.593

Var(R) 1.820.142.600.617.870.000
Standard deviation 1.349.126.607
Single-Asset Portfolios 0,643
Rrf (Savings account with 8% interest
rate) 1.045.426.927
Sharpe Ratio 0,78

- The value of the single asset portfolio is 0.643, which represents the risk-to-reward ratio. The
fact that the risk is lower than the return indicates that the project is relatively safe.
Additionally, the high return and low risk suggest that the project has potential for investment.
The Expected Return of the project amounts to VND 2,099,066,593, which is greater when
compared with the Rrf assumed in the article (a savings account with the same initial
investment and an interest rate of 8% per year), which is only 1,045.426,927 VND.
- As a result, the Sharpe Ratio reaches 0.78. Even though this figure is not particularly
impressive, it still suggests that investing in the project brings higher returns, enough to offset
the opportunity cost (Rf opportunity cost) spent on investment into the project. With low initial
costs, minimal operating expenses, and high profitability, this project holds great promise.

III. Conclusion
- Based on the analysis and assumptions made to evaluate the potential of the project with
greater accuracy, we have determined that it is a promising and worthwhile investment. The
project boasts a fast recovery time, good profitability, and low risk in terms of profit.
Additionally, creating a competitive advantage and retaining high-quality employees will help
establish a loyal and stable customer base. Effective cost management is also expected to lead
to increased profits for the project.