You have an idea for a restaurant, but you don't know how to write a restaurant business plan.
We've all heard the saying "fail to prepare and prepare to fail". This is especially true when it comes to writing a business plan. If you want your restaurant idea to succeed, then you need a solid restaurant business plan in place before opening day.
Let's face it – many startups fail within the first few weeks of opening. One reason is that they don't take the time to develop a comprehensive business plan. And another reason is that their plan isn't any good!
Let's see why a restaurant business plan is important.
A business plan provides restaurant owners with an organized guide to how they'll make their vision come true.
When you're in the weeds and need guidance, your business plan will act as your roadmap to success - it's like having an extra person around helping you stay focused on what needs done next.
Without one or just starting out, making any headway can be much tougher than necessary because there is so much uncertainty about where resources should go first.
Every business plan is different, but there are certain components that every restaurant owner should address. I will list them in order of importance below:
A restaurant business plan should always begin with an executive summary.
An executive summary not only acts as the introduction to your business, but it also a brief overview of your idea and how you intend on executing it. The main aim for this section is draw in investors who are interested about investing their money into what you have to offer them.
Common elements found within Executive Summaries include:
Mission statement - This defines why people need or want this project/idea;
Proposed concept - How exactly do these ideas work? What will they entail and look like while being executed?
Execution - Who's going to execute all of these plans that were created from the proposed concepts if everything goes right (and sometimes things don't go so well)?
Potential market - Who will be the consumers or target audience for this?
Competition - What are your competitors doing and how do you plan on beating them all? Financials- How much are you going to need to spend in order to execute this idea? And how will these funds be obtained?
Expected return on investments- Is this worth investing into? What are the rewards?
Projected Timeline - This entails everything that is going to happen within the upcoming months, and why these events will take place. It also gives investors a visual idea of what will be taking place in the near future;
Otherwise, they can skim over the executive summary.
In the company description, you introduce your restaurant and its location. You provide all relevant contact information such as email or phone number.
The owner's experience is also discussed so that investors can assess their knowledge of the industry based on previous successes in related fields like management consulting for restaurants (e.g., testing menus).
These factors are important because it shows how committed they are to this new project by highlighting what sets them apart from other entrepreneurs with similar ideas but less expertise
The second part of a business plan should highlight where legal standing comes into play when opening up an establishment, along with outlining short-term goals and long term plans including market research done to show why this will succeed especially since there’s been such great interest lately in the restaurant business.
The market analysis portion of the restaurant business plan is typically divided into three parts. The first of these is a brief overview that describes who exactly is the target market and what they will be served.
The second part evaluates known or potential competitors, with an emphasis on their strengths and weaknesses, as well as how your restaurant will be different from them. The last part of this segment includes recommendations for marketing strategies that you will use to attract and retain customers.
This is very important because it shows that you have the ability to communicate your services in a way that connects with people, and that you know how to advertise your restaurant so that it will not only attract the right type of customers, but also make them want to come back for more.
After you have established your restaurant concept and target market, crafted marketing plan, secured funding and legal support, it is time to create an operations plan.
This should include how food will be prepared (e.g., recipes), how much food should be purchased each week based on projected demand, who will do what tasks such as purchasing or payroll and forecasting of sales and profits.
Depending on the size of your restaurant, you may want to specialize in a specific type food like Italian or Buffalo wings.
Having an all-encompassing menu is fine but it would make it difficult for customers to find exactly what they're looking for right away. This will not only be a turnoff but also discourage customers from returning in the future.
This may mean that you won't have a whole lot of flexibility as far as decor and other aesthetics are concerned; however, it will generate more business by giving people what they want when they want it.
These kinds of concerns need to be addressed in detail and supported with relevant evidence.
What kind of rate of return are you expecting for yourself as an investor, along with the business owner?
If you're looking for a loan or an investment from an investor, then they will want to know how long it will take before their money is paid back in full.
This also applies to profit-sharing. There are numerous methods of calculating profitability and determining what kind of payout you want (or don't want).
This section of a business plan also outlines how you will be measuring your success, along with what criteria you'll use to judge whether or not this project is worth pursuing.
It's important to know that if these things aren't all covered in your restaurant business plan, then it could all come crashing down at the first sign of trouble. You need to keep in mind that there is no place for ulterior motives or business-related dishonesty because this will come back to haunt you later on down the road.
Find out what Bookmyorder can do for your business