Performance of Micro Restaurant Enterprises in Cross River State, Nigeria

G E Umeze,S B Ohen

doi:10.5539/jas.v6n11p118

Abstract

This research was carried out to assess the performance of micro restaurants in Cross River State, Nigeria. The study was based on primary data obtained from a proportionate random sample of 132 restaurant enterprises and analyzed using descriptive statistics, cost and return analysis, profitability ratios, and multiple regression (ordinary least square) analysis. The result of the analysis showed that ownership of restaurants in Calabar metropolis is largely dominated by females (83.3 percent) and that majority of the entrepreneurs (53.79 percent) had secondary education as their highest level of education. Monthly cost and return analysis revealed that gross margin and net income of a restaurant entrepreneur amounted to 181,258.97 naira and 172,397.63 naira respectively. The profitability index (0.26), rate of returns on investment (0.35), rate of returns on variable cost (1.36), and operating ratio (0.72) combined to suggest that restaurant business was profitable. Age, training received, years of educational training, age of business enterprise, hours spent on the business and total cost of production were among the socioeconomic variables found to have significantly contributed to the total revenue of the entrepreneurs. Restaurant operators were encouraged to explore avenues of increasing the efficient use of variable inputs in order to grow the profitability of their enterprise.

Highlights

Restaurants across the globe are estimated to have generated more than US$704 billion in revenues in 1997 and employed more than 48 million people (Olsen, 1999)
The result of the analysis showed that ownership of restaurants in Calabar metropolis is largely dominated by females (83.3 percent) and that majority of the entrepreneurs (53.79 percent) had secondary education as their highest level of education
The remaining 14.39 percent of the respondents are under the age category of above 50. These results suggests that the elderly ones tend to set up restaurant business having acquired a level of savings and may be planning for retirement

Summary

Introduction

Restaurants across the globe are estimated to have generated more than US$704 billion in revenues in 1997 and employed more than 48 million people (Olsen, 1999). The number of double-income households is increasing implying that both spouses are working, which creates less time at home and for meal preparations. Consumers purchase more prepared or partially prepared foods that require little or no cooking time and dine out for everyday meals more frequently. As the demand for food away from home increases, there is opportunity for growth in the restaurant industry. Going to a restaurant is a social experience, an opportunity to meet friends, amazed by exciting food presentations, and to even be entertained by a small musical ensemble or a chef preparing the meal at the table in front of the customers. Social occasions, business necessity, and celebration are all reasons people dine out (Kivela, 1997)

Objectives

Methods

Conclusion