A restaurant business plan is an opportunity to bring your concept to life on paper. It provides an outlet to express your passion for your idea and sell others on it, too. A business plan has two primary purposes � to attract potential investors and provide a guideline for opening and operating your restaurant.
Restaurant business plans
can be as simple as an idea written on the back of a paper napkin.
However, if you are going to present your business plan to potential
investors, you want to supply them with as much information about your
restaurant concept as possible.
Essentially, a business plan
should tell the story of your restaurant and include several key
components: an executive summary, a description of your business,
market strategies, a competitive analysis, development plans,
operations and management plans and financial estimates.
Restaurant Business Plan: Executive Summary
An
executive summary is a concise presentation of your idea. It should
bring to life your passion for your restaurant concept and highlight
your concept�s potential for success in the marketplace.
Oftentimes,
an executive summary will be the document that gets your foot in the
door with an investor and will afford you an opportunity to put on an
investor presentation. An executive summary is your chance to clearly
and concisely state your objectives, the potential for your concept and
the amount of funding you will need.
Restaurant Business Plan: Business Description
This
section of your restaurant business plan should describe the current
state of the restaurant industry and how your restaurant fits into it.
How would you categorize your restaurant � casual, quick-casual or
fine-dining? Is it an upscale Italian restaurant, a pizza parlor or an
ice cream shop?
Your business description should showcase the
elements of your restaurant concept that differentiate it from every
other dining establishment. Explain how you plan to gain a competitive
edge and why your restaurant will be profitable.
This may require some research on the current and future restaurant industry trends. A restaurant consulting firm with a skilled research department can help you identify these trends.
Restaurant Business Plan: Market Strategies
The
market strategies section of your business plan should reveal how you
will position your restaurant within the market. To do this, you will
need to define your restaurant�s target market, pricing and promotional
strategies.
When defining your positioning, don�t try to be all
things to all people. Don�t strive to be the best at what you do; be
the only one who does what you do.
Restaurant Business Plan: Competitive Analysis
As
part of the competitive analysis, you should outline who your
competitors are and why, and identify your competitor�s strengths and
weaknesses. Using this information, you can develop a competitive
strategy for your restaurant.
Because you will be competing with
all different types of companies for funding, you must provide a
convincing reason for pursuing a restaurant venture.
The most
compelling reason to launch a restaurant concept this day and age is to
capitalize on increasing consumer spending in that market. Restaurant
sales are expected to reach $537 billion this year, according to the
National Restaurant Association report.
Restaurant Business Plan: Development Plan
Your
restaurant business plan must explain how you will allocate funds
during the development stages leading up to your restaurant�s opening.
Include a detailed explanation of the use of funds for pre-opening,
leasehold improvements, furniture and fixtures and other costs
associated with starting a new business. Pre-opening costs must include
labor, sales and marketing, public relations, menu design and
development.
Restaurant Business Plan: Operations and Management Plan
You
must also create a detailed plan explaining how your restaurant will
function on a continuing basis once it has opened its doors. Outline
the organizational structure of your restaurant, the responsibilities
and tasks assigned to your management team and any associated
operational expenses.
This section of your restaurant business
plan should introduce your partners and key staff members, explaining
how each will contribute to your restaurant�s success. Consider
including biographies of your team members, especially anyone that has
an extensive business or restaurant background. This will help
establish credibility for your concept in investors� eyes.
Restaurant Business Plan: Financial estimates
Though
you would probably prefer to focus your efforts on opening your
restaurant than crunching numbers, investors will expect your business
plan to include a five-year projection of financial results. Include
cash flow statements, balance sheets, profit and loss statements and
debt or equity payment schedules.
It is crucial to provide
realistic projections. A tiny coffee and pastry shop slated to open in
West Palm Beach isn�t likely to generate $5 million in yearly sales if
the local Starbucks is only making $2 million. Be sure to do your
homework by researching typical finances for similar concepts in your
area. The numbers must match your story.
Working with a
consultant or firm to develop your restaurant business plan is the
easiest way to develop realistic financial projections, especially if
the consulting firm specializes in the restaurant industry.
The best restaurant business
plan in the world needs to be backed by a great operation. A consultant
can also help you create sensible goals that your restaurant will be
able to execute from an operational standpoint.
A business
plan is like a promise. If you don�t live up to your business plan, you
run the risk of shattering investors� faith in your restaurant concept.
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