Writing a Business Plan for a Restaurant
Turning one’s love for cooking or entertaining into a source of livelihood is a dream that many have, and opening your own restaurant is the best way to realize it. However, a lot of work goes into becoming a restaurant owner, from long work hours to low pay, and of course, loads and loads of stress. This often results in people giving up on their dreams and closing down.
Why is the Business Plan Necessary?
One huge reason for the unnervingly high failure rate in the restaurant business is people failing to treat it as an actual business, to begin with. People don’t usually plan to deal with problems such as unexpected expenses, keeping up with market trends, etc. Some don’t even understand the costs associated with opening such a business.
In order to avoid these problems, it’s best to have a well-written business plan for your restaurant.
Writing a Business Plan for your Restaurant
You need to tailor your business plan according to your own specific vision for a restaurant and its place in the local market. You can make a general business plan initially, but eventually, you’ll need to structure it specifically for the restaurant industry and your plans for succeeding in it.
1. Writing an Executive Summary
Your business plan needs to have an overview which has to answer questions like what niche your restaurant will fill in the local restaurant market. Your investor needs to know what kind of restaurant it will be (fine dining, fast-food, sports bar, etc.) You need to make it very clear to them how you’ll fit into the market, what name you’ll have and the location you’ve chosen.
Additionally, you need to communicate your own specific role in the business. There are many operations that a restaurant handles at the same time like making menus, cooking food, serving customers, managing finances, and making marketing efforts to expand your clientele. You can’t possibly be responsible for all of these, so you need to mention your partners here.
2. Describing Your Company
All of your business’ key details will be in this section, such as your location, mission, target customers, the type of food on your menu, what makes your restaurant unique, and why people would come to your restaurant. In addition to that, it should also include your company’s legal name, its ownership, its business structure, and its management team.
3. Making a Marketing Strategy
Your marketing strategy should have three key components:
- Industry: Who will you cater? Senior citizens? Single professionals? Families and their young children? Tell your investor why your customer base is going to flock to your new establishment instead of going to your competitor.
- Competition: Who is your competition, and how will you stand out among them? You might have mentioned this previously, but here you go deeper into the details. Remember, you won’t make loyal customers if you aren’t offering something unique.
- Marketing: How exactly are you going to promote your restaurant? And more importantly, who will have this responsibility? Let your investors know that you’ve hired a seasoned professional in the food business to help you climb the corporate ladder.
4. Mentioning Business Operations
In this section, you will tell your investors about your work hours and also the number of employees you plan to hire. Moreover, you will explain the benefits of coming to your restaurant for potential customers, like its convenient location, its vendors selling organic foods, etc. You are going to explain what will give your restaurant a competitive edge.
5. Explaining Management & Ownership
You need to explain your management hierarchy in full detail in this section. Who is going to run the show? Will a general manager report to you about the rest of your employees, or will all of them report to you equally? You must ensure that the structure and function of the management are easy to explain to your potential investor.
6. Analyzing Finances
This part will include your restaurant’s projected growth. There should be a general start-up budget, and also a profit and loss statement that compares your expenditure with the amount you expect to make.
Investors need a realistic picture, so tell them that they are in fact going to get a return on their investment. Spend some time on this section and try to accurately project your labor, food and operational costs versus the expected growth and sales of your restaurant.
Taking Outside Help
Many of you who aspire to open a restaurant business isn’t professional businessmen, so it is a good idea to seek out a business partner who can handle this end of the operation. If finding a partner is difficult, consider hiring a consulting firm that specializes in helping budding restaurant businesses.