SSR is a small social enterprise located in a low-income inner city area. SSR employs young people who have not been successful at school. It aims to teach them valuable work skills and to help them gain qualifications, so that they have more chance of getting full-time employment elsewhere. SSR's customers are very supportive of this social enterprise. They are willing to accept a slower service and a simpler menu in exchange for the chance to help disadvantaged young people gain qualifications. The current average price for a meal at his restaurant is $5.50, which is lower than local competitors. Sadiq, who manages SSR, wants to increase its size by opening a second restaurant so that he can help more young people. He relies on local schools and colleges to recommend young people for his enterprise. He has been told that there would be government grants available to pay for induction and training. Sadiq has identified two possible locations that he can rent for the second restaurant. Start-up capital would be from retained earnings and an overdraft facility from his bank. Table 2.1 shows forecast data about each of the locations. Table 2.1: Forecast data for each location | | City centre | Edge of city | | :------------------------------------- | :---------- | :----------- | | Start-up capital costs | $5000 | $10000 | | Monthly fixed costs | $1000 | $375 | | Average cost of ingredients (per meal) | $1.50 | $1.50 | | Other variable costs (per meal) | $2.25 | $1.30 | | Expected number of customers (per month) | 1000 | 750 | Table 2.2 shows additional information taken from Sadiq's research. Table 2.2: Additional information for each location | City centre | Edge of city | | :----------------------------------- | :--------------------------------------- | | • Previously used as a restaurant | • Previously a non-food shop but has permission to convert to a restaurant | | • A range of other restaurants nearby | • No other competition | | • No parking facilities | • Large car park |