It is a rather simple equation; any new idea that involves investments, customers, employees and other stakeholders cannot turn into reality if it has not been properly planned. Why would that be different when you want to open a restaurant? You will need a Restaurant Business Plan that allows you to turn your idea into concrete and well-articulated steps, as well as anticipate any obstacles and the actions you will take if they occur. It will also help you attract the funding you need.
It might seem a tedious task to do, but you do not want to rush yourself into any business. The time and resources you will put into creating your business plan will pay off and will result in the success and prosperity of your idea.
So, what will your Restaurant Business Plan include? In this article we aim at making the different steps practical and simple to understand and use.
- Know your audience. First your will need to know who your audience is. In most cases it will be potential investors, be they institutions or even relatives or friends. You will therefore have to define your objectives; i.e. what are you aiming to achieve with your business plan? Is it getting a bank loan, a lease space, attracting angel investors? Then make sure it is structured in a logical and easy to understand manner.
- The Executive Summary. It is a brief and straight to the point description of your project. It is a very crucial part as it will either help you in getting the attention and buy-in you need, or just make it a lost case. It should be written at the end after you have laid out the other components.
- The Legal structure.This section will include a brief description of the legal organization and it will of course come as a result of the structure you have chosen for your entity.
- It is one of the most important aspects of a restaurant. Potential investors will scrutinize the location selection as it will define the image you want for your restaurant. They will also be interested in the real estate value of that location which is why you will need to justify the choice you have made to lease or to buy it.
- This should be a brief explanation of the capital you need to open your restaurant and the potential sources you are considering to fund it.
- The Restaurant Concept. This is where you will allow your reader to “see” what your restaurant will actually look like. You will need to be a passionate writer here and describe your concept just as if a painter is drawing his dream view. The aspects you will talk about here will include the theme of your restaurant, the service you are offering (is it fine dining, fast food, casual, etc.?), the menu, the interior design, the ambiance, the opening hours, any other services you might offer (such as catering, delivery, etc.).
With a good writing style – if you do not have one, get the best-emphasize on what makes your restaurant unique in the food it is offering, or the ambiance customers will get to enjoy.
Carefully selecting your words and pouring in everything you love about that concept you are creating is one of the cornerstones of a well-written Restaurant Business Plan.
- Sample Menu. By adding a sample menu in your business plan, you would be giving some visual material to your potential customers and enticing their perception. Make sure the menu is designed in a simple, yet eye-catching way, while being aligned with the overall concept.
- Interior Design. If you already have any, add them to your plan as these are also some helpful visual materials.
- Restaurant Management. It is important to have it in your business plan because it highlights the knowledge, experience, skills, background, and Education that can help your business succeed. Even the greatest ideas may feel and not attract prospective investors if they do not believe in the persons they are investing in; because yes, not only are they investing in the concept, but for that to prosper and continue they need to know that the people owning that concept actually have what it takes. You will need to provide a brief resume about each one of your management team and the role they will be fulfilling in the structure.
- Market Analysis. This is a crucial part in your Restaurant Business Plan. At this level you will need to:
- Understand industry trends and customers spending habits. This requires thorough research on local data and publications wherever available, and it will give you an idea about future growth prospects of your concept.
- Identify your niche market. Your target customer depends on your concept. In this section, you can describe the characteristics of your customer in terms of age range, income, civil status, living standards, etc.
- Assess the location vs. your target customers. The location of your restaurant will be key in attracting your target customers. The information you will include here should be related to the conditions of that location, demographics, local businesses, potential traffic, nearby populations, etc. You will also need to conduct thorough research using local population or connections and published data.
- Understand your competition. This will help you estimate your market share, and saturation level of the market in which you are establishing your restaurant. It will also allow you to identify the key aspects you have competitive advantage over and to focus on those.
- Marketing Strategy. This about answering one question: how do you want to grow your business? For your restaurant business plan to convince your readers, you will need to tell them how you are planning to attract customers and increase your customer base. Your marketing strategy will include:
- The campaigns you will be doing and the channels you will be using as such; i.e. social media, emails, text messages, etc.
- Building your customer database
- Loyalty programs
- Your PR networks
- Operations Plan. Setting your operating plan is critical to the success of your restaurant. Operations should be systemized and documented in manuals, policies and procedures, so that everyone understand their respective roles and the controls that are in place to avoid any mishap. You may not be able to have those systems documented before opening your restaurant, but you will at least need to consider the key systems and controls you will put in place. This encompasses your recruitment procedures, training, day-to-day operations functioning (including your supply chain, service, production, health and safety rules, etc.), handling of customers’ feedback/complaints, and the suppliers you will be working with and the criteria based on which they will be selected.
Controls should be identified to prepare for the daily challenges that might occur and obstruct your business. It should not be a last-minute task but rather an avant-gardist one. Management is responsible for setting those controls and putting in place a clear monitoring system to ensure they are being properly implemented. These include, but are not limited to:
- Cash Control
- Cost control through periodic reporting
- Payroll controls including timesheet controls for example,
- Inventory checks
- Ordering procedures
- Health and Safety measures
Wrapping up, developing a restaurant business plan requires time, effort, and good resources, but having prepared yourself so well, you will be even more able to convince potential investors to invest in your concept. You will also get to focus on other upcoming things rather than on fire-fighting obstacles and trying to survive them.
Article contributed and Owned by: DYAFA