If you are finally pursuing your dream of opening your restaurant, and you are looking to secure financing for the endeavor, you are going to need a solid business plan. Even if you do not need financial backing from outside parties, it would behoove you to write one anyway, but I digress. To receive the money you need, you have to convince investors that you know what you are doing, that you have carefully thought out all the aspects of the business , that you have a plan for success and that you have assessed risks. While it would be impossible to cover everything about a restaurant business plan in one article, here are some broad strokes to get you started.
The executive summary is just that—a summary of the plan you have put together. It is designed to capture the reader’s interest and should cover your concept, why said concept will be profitable, how you are going to bring it from paper to reality, costs and return on investment. While this is the first part of the plan you will present, it should be written last. This is not the place to get into a lot of detail—you are just giving an overview, infused with some key information that will leave the person wanting to hear the rest.
This is where you go into detail about the basics of the business. First, you will describe the legal status of the business; typically it will be an LLC or an S-corp since these types of designations shield investors against personal liability should anyone take legal action against the establishment. You will need to list the location, or the proposed location if you have not found one yet, as well as whether you will be leasing or purchasing the space. Whichever one you choose, prepare to explain why you went with this option. You also need to provide an overview of how much capital you need, but will save the details for the financial section of the plan. Last, but certainly not least, you have to describe the concept of your restaurant—what type of food, what type of atmosphere, the service style, menu theme, unique selling points, etc…
Overview of Management Team
Many a business plan has been turned down because the investors were less than convinced that the people heading the restaurant did not have the proper experience to successfully run the establishment. It will not matter how great your idea is. List out all the different people who will be involved in running the restaurant and list out their qualifications—you may actually want to include their actual resume. I you have drafted a management agreement, include a copy.
Analysis of the Environment
There are lots of restaurants out there, and you need to show investors that you have done your homework and that your restaurant will be a profitable addition to the market. Identify your target market and show how you will be able to draw them in to your establishment. You will need a thorough location analysis, as well as an analysis of your competition and how you will gain an edge over them.
Obviously, you need to provide detailed financial information. You have to calculate how much money you require to start the business, and must take into account everything from equipment to menu covers. Then there are financial projections, how long you think it will take to break even, how long before you turn a profit and how you will manage financial risks. Investors want to see a marketing plan—specifically outline how you will get people into your restaurant, what methods you will use to market. You also need to provide a section that outlines aspects of the daily operations, such as staffing needs, training, customer service, payroll processing, inventory control and weekly financial reports.
Kelli Cooper is a freelance writer who blogs about all things business; she recommends visiting www.menushoppe.com for a range of menu options for your restaurant.