How do you write a business plan for a restaurant?
You have finally decided to open your restaurant. You've found the right location and have an idea that you can't wait to put into practice.
Now you need to
understand if your idea is feasible and what are steps to take to make your
dream come true.
For this, you need a
business plan.
What is that?
It is a very important
document for you and the success of your restaurant.
You must always keep
it close at hand.
To write the business
plan for your future restaurant, you must have some information and data to
research.
What is a
restaurant business plan for?
You've heard it
hundreds of times: a business plan is the most important element to get your
business idea off the ground.
The business plan is
important because:
- A business plan is the first
thing any investor will want to look at.
- Putting the time and energy
into creating one shows others, especially yourself, that you're serious
about the venture.
- You'll have a document you can
easily refer to when something comes up while planning or opening your
restaurant.
While it's essential
to starting a business, creating a restaurant business plan is still a challenge for many aspiring entrepreneurs,
regardless of industry.
Example: The
essential elements of the business plan for your restaurant
Now let's see what a
properly done business plan should contain. Here are the sections you'll find
yourself filling out:
- Executive summary
- Company Description
- Market analysis
- Operational plan
- Financial data
- Appendix
Section 1: The
Executive summary
The summary should
simultaneously serve as a summary of key findings and an invitation to read
more.
There is
a lot to write in this section, so for readers who want to get a
basic look at the viability of your restaurant and its business model, let's
briefly summarize these points:
- Name, concept and cuisine of
your restaurant
- Your market position and
competitive advantage
- Your financial projections and
breakeven point in sales and days
This section should be
around 200-600 words maximum and be persuasive to any investor who
wants to know about your dream restaurant business idea.
Section 2: The
description of the company
This section should
give readers a high-level overview of your restaurant idea.
Each subparagraph is
about a different part of your restaurant that investors will want to know
about.
This part of the plan
is usually standard; chances are your potential investors have seen dozens or
even hundreds of restaurant business plans.
And this is where we
will surprise them.
Spice up this section
and show your passion for this project with exciting, detailed language that
will make your business plan writers stand out.
Management and team
This is the section
where you will talk about yourself and the team you have already
assembled.
You must highlight
your skills and those of the team you have built, how you have selected it,
why, and how you form it.
In practice, you could
highlight that you, as the owner, have 12 years of restaurant management
experience.
You are a member of
the National Restaurant Association, and you are joined by a head chef who
trained with Wolfgang Puck and a general manager who has been a consultant to
the industry for the past four years.
Divulging restaurant
leadership will make the business more efficient and profitable than another
restaurant without your team's talent.
Section 3: Market
Analysis
This is where you
explain the positioning, your target, your restaurant's clientele, who you are
addressing, and how you decided to attract their attention through a careful
and detailed study.
Position
Please provide the
location where your restaurant is or will be. Geolocation is essential; if the
precise position is not yet there, write the name of the city or district where
you intend to do business.
Competitive
analysis
Explain how your dream
restaurant will stand out from other restaurants.
The good idea is to
include a SWOT analysis for your restaurant, outlining the internal strengths
and weaknesses you believe your business may have and any external
opportunities and threats you may face.
Here are some examples
of each:
- Strengths: Over 30 years of experience
in catering by the management team.
- Weaknesses: Training time
required for staff could set back our financial projections.
- Opportunity: Our location is
close to several office buildings, suggesting that we could have a steady
stream of lunchtime clients, businessmen and women and after-dinner
guests.
- Threats: An established
restaurant with a similar concept is near and directly threatens our
potential market share.
In your SWOT analysis,
you should identify how you plan to overcome the weaknesses and threats your
restaurant will face to reassure investors that they won't be drawbacks to your
business.
Market size and
demographics
Explain the tactics
you have developed and already tested after conducting your market research and
attach the associated results.
You'll want to
highlight the stats you've found most relevant to your restaurant business.
For example, suppose
you're opening a coffee shop. In that case, you might find that your main
research concluded that people between 24 and 36 years old make up 40% of the
population in your area. Further, that research from other outlets suggested
that millennial coffee consumption continues to increase.
This would lead to a
compelling, research-based conclusion that the café could be a realistic and
profitable endeavor for the area.
Section 4: the
operational plan
Let's move on to the
practical stuff.
Some investors will
want to see how all the moving pieces come together daily with a detailed
operating plan. This section should include staffing strategies, what
technologies and equipment you will use, and what your restaurant might be
like.
Personal
Hiring restaurant
staff is one of the most difficult tasks in the restaurant industry.
Industry workers are
looking for higher wages – which would drastically increase restaurant labor
costs –and high staff turnover is theme investors are familiar with and could
pillory you about.
Technology
One of the good things
about opening a restaurant today is the abundance of useful and innovative
technological solutions.
Write down your picks
for point-of-sale software, inventory management software, employee scheduling
software, and POS payment systems.
New restaurateurs can
take advantage of new technologies and gain a competitive edge in terms of
efficiency.
Section 5:
Financial data
Don't be offended if
you see investors jump straight to this section. After all, no matter how tasty
the food and how reasonable the market valuation is, a company needs to be
profitable and profitable, which is important to you first and then to
investors.
So before finalizing
this plan, quadruple these projections and consider hiring a financial
professional.
Sales forecast
A conservative but
confident sales forecast should highlight first-year sales projections on a
weekly, monthly, and/or yearly basis. You should base this forecast on a few
criteria, such as capacity constraints, table schedules, delivery and takeout
options that are now essential, reasonable month-over-month growth expectations
for the first year, opening hours and menu prices.
Startup costs
Every good investor
will want to know what their money will be for. Explain the amount of money
needed to get this project off the ground, identify major expenses, and don't
be afraid to throw in a line item for working capital — a reserve fund for your
first (probably slower) months of operation.
Projected profit
and loss account
Use a budget forecast
to show investors how much money you expect to make or lose before the end of
your first year.
This should be based
on the restaurant's projected sales forecast and costs for opening the
restaurant and running it throughout the year.
Section 6: Appendix
The appendix and its
contents are all optional, but this section may contain plans, charts, images
or any other material that investors may find useful.
Sample menu
Provide one of the
restaurant menu ideas you've drafted. This will provide a visual aid to the
work on branding, pricing, food selection and menu engineering.
Even the wine list is
very important; if you don't know where to start to set up yours, here is a
guide.
Floor plans
As mentioned earlier,
the appendix is the perfect place to include any models of the restaurant
floor plans. These plans give readers an idea of how guests and employees can
move and interact with each other in the space.
Additional
financial charts
Do you have to support
financial documents, such as cash flow and an expected income statement?
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