Essay Sample on Chick-fil-A Restaurant Business Evaluation

Business evaluation is an essential process in the determination of the viability and profitability of any undertaking. The management of a business needs to be conversant with business evaluation at each step of the way. The evaluation and analysis process depends on numerous vital criteria. Some of them may include the acquisition costs for the raw materials or products, essential labor costs, the total fixed and variable expenditures, as well as the revenues and the desired break-even point and profit margin. Because of the criticality of business analysis to an organization, Chick-fil-A business evaluation in light of the critical criteria for determining business success is of equal importance and the central focus of the paper.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Several essential quantifiable business analysis metrics are available for determining the progress of the Chick-fil-A restaurant. They play a pivotal role in business evaluation and thereafter, the management and running of the restaurant. Chick-fil-A’s business evaluation relies on these numerous criteria. Firstly, cost per acquisition is an essential factor in the assessment. It includes all the financial costs that Chick-fil-A will incur in the process of attracting new prospective clients. It also includes fixed and variable costs and may vary depending on the size of the business. Chick-fil-A, being a restaurant, relies on the sale of food and other services as the fundamental revenue-generating factors. Therefore, besides the costs per acquisition, the total amount of funds spent on food and other maintenance services plays a significant role in its business evaluation. Thus, the amount that the organization spends on the various ingredients and meals preparation programs help in the review. The higher the costs of foodstuffs, the more the business pays. The converse is true where a restaurant with fewer foodstuff costs and lower financial obligations will have low operation costs in comparison to Chick-fil-A. It is worth noting that a restaurant with higher financial commitments in terms of expenses requirements will have significantly higher revenue returns.

Secondly, labor cost is a vital criterion in the Chick-fil-A restaurant business evaluation. It entails the total amount of wages that the organization remits to the employees. The sum in the form of benefits and payroll awarded to the employees helps in the classification of the restaurant. Labor costs are an essential business evaluation criteria. They help in the determination of the performance of the business and comparing the business with other competing organizations. Thirdly, the total revenue at Chick-fil-A is central in business evaluation. A critical analysis of the revenue against the total costs and expenditures in the business is vital not only for financial analysis but also for comparing different business practices in the hotel and restaurant industry as well as the vertical examination of the business over time. A comparison of Chick-fil-A’s total revenue today against the last five years’ evaluation forms the baseline for determining the success or failures of the business. Thus, the total financial position of a business highly relies on the restaurant’s sales. In the business evaluation, the higher the sales of the restaurant, the stable is the business.

Consequently, the break-even point for the restaurant’s business is also a vital criterion for business evaluation. The total sales that are essential in outweighing the input costs at Chick-fil-A form the basis for analyzing the break-even point for the organization. The costs involved in the evaluation, in most cases, include the fixed and variable costs and will vary from one business to another. In the business evaluation, the break-even point is vital as it offers an avenue for analyzing the position of the business. It helps in the examination of the performance of the restaurant business. The break-even point closely relates to the profit margin, which is another criteria for business evaluation. The profit margin primarily refers to the total sum that an investor in the restaurant acquires after realizing the break-even point. The profit margin is amongst the most vital element in business evaluation since the ultimate aim of the business is to make profits while at the same time meeting the customers’ requirements.

The business location plays a significant role in business evaluation. Holding all the other factors constant, a restaurant located in a busy street will definitely hit the break-even point earlier than the one located in a place with low traffic. The business location also plays a significant role when it comes to the acquisition of supplies. A restaurant located close to the sources of essential products will have an added advantage in comparison to the one in a remote location. Chick-fil-A is an excellent example of the role that location of the business plays in its evaluation. However, in the business evaluation, the locational factor influences other analysis criteria. Therefore, its effect on business performance and management is spread all over the other evaluation criteria.

In conclusion, business evaluation is an essential process in the management process. It helps in determining the progress of the business with time and compare that with the competing ventures. Several criteria are vital in the restaurant business evaluation. Some of the most common ones include the acquisition expenses for the raw materials and supplies, the labor costs, the total fixed and variable costs incurred in the business, as well as the revenues. The break-even point and profit margin help in restaurant evaluation, particularly in the early stages of the business establishment.