Opening a new restaurant or a bar is a dream come true for many entrepreneurs, but a restaurant business is one of the most capital intensive enterprises you can own. All of those industrial ovens, stainless steel sinks and refrigeration equipment cost money, not to mention the cost of the tables, chairs and other furniture.
All that expense means that you will probably need to borrow money to get the restaurant up and running, and in order to attract the capital you will need, you need a solid financial plan in place. When you seek out a loan, whether from a government agency like the Small Business Administration or from your local bank, you need to provide a solid business plan for those entities to review. Creating a business plan for your proposed new restaurant is not as hard as you might think, but it is important to follow the proper format and include as much information as you can.
In order to write a business plan, you need to take a look at each section, and how a business plan template can help you make the most of the data you have gathered. Business planning software can help as well, since it takes a lot of the drudgery and guesswork out of the financial rations that make up your restaurant business plan.
The executive summary portion of the restaurant business plan is critically important, and you need to pay careful attention to this part of the plan. The executive summary is where you will list all of your previous restaurant experience, as well as any management and staffing skills you may possess. The executive summary serves a couple of important purposes, including showcasing your strengths as a business owner and detailing how you plan to go about starting a restaurant that will quickly become the premier destination in your town.
In the business overview section of the restaurant business plan you actually get down to the nuts and bolts of how the business will operate. This section will include such vital details as where the restaurant will be located, what hours it will keep and what type of cuisine it will specialize in. It is important for the business overview section to provide a compelling argument for why starting a restaurant of the type you propose will be a successful endeavor.
Products and Services
Opening a restaurant or a bar means providing both products, namely the signature dishes you will create, and services, including the attention of your wait staff and the ambiance and elegance your restaurant creates. The products and services section of the restaurant business plan gives you a chance to detail what your restaurant will offer, and what will set your new restaurant apart from the competition.
Chances are there are already plenty of restaurants in town, and this section of the plan is designed to convince skeptical lenders and would-be investors why your business plan to open a restaurant is a good one. In this part, you will detail the marketing strategy you will use to differentiate the new restaurant you open from others in the area. This section can also include details of the market research you have done, including efforts to identify and cater to underserved segments of the market.
Management and Staffing
One of the biggest hurdles faced by any new restaurant is finding qualified staff members at an affordable price. The restaurant industry has a notoriously high turnover rate, and it is important for the business plan you create to show that you have given plenty of thought to overcoming this challenge. The management and staffing section of your plan should lay out in detail your strategy for attracting and retaining talent, both in the kitchen and in the front of the house. This section should also detail the experience and core competencies of the management team, since those individuals are just as critical to the success of the enterprise.
Starting a restaurant is a complicated and time consuming endeavor, and the restaurant business plan will need to include firm details on how, when and where the restaurant is to be opened. The implementation plan portion of the business plan should include a detailed timeline for starting the restaurant, from renting or buying the space and obtaining the furnishings to stocking the kitchen and hiring the personnel who will run the operation.
Opening a restaurant requires a lot of capital investment, including purchasing the freezers used to store food at the proper temperature, the stainless steel sinks and dishwashers and the tables and chairs needed to make diners feel at home. The investment section of the restaurant business plan is where you will lay out the details about the items your new restaurant will need to get off the ground, as well as the ongoing investments that will be needed to keep it up and running.
The funding section of the business plan will include details on the funding it will take to get the new restaurant off the ground. This section is very important, since lenders and equity investors will need to see that you have done a thorough analysis that includes all the equipment and supplies you will need.
Solid financial projections and financial ratios should be part of any restaurant business plan. In this section of the plan you will lay out the revenue you expect the restaurant to generate, both during its initial startup phase and during its normal operation. A lot of thought and care needs to go into this section, since lenders will want to see that you are using realistic figures and not pie in the sky projections.
There are many risks associated with starting a restaurant, and you need to address those risks frankly in the business plan. All businesses have risks, but restaurants have a number of risks that are specific to their line of business. Some of these risks include a bad report from the health inspector, a negative review from a respected food critic or the sudden loss of a top chef to a competitor. Addressing the possible risks of the restaurant business is a critical part of your restaurant business plan.