A business plan is essentially the roadmap to the success of your restaurant. This is especially important if you are trying to obtain third-party funding, as it is universally understood as an organized way to portray your vision. This is true whether your source is a bank or an individual. That said, even those who plan to personally finance their new business should not overlook this key step, as it provides a quick, easy reference to the backbone of your concept. Organizing your strategy will help you create a solid plan and will keep you on task.
There are many variations to a business plan. You can go as basic or robust as you see fit. For most restaurateurs, however, a simple plan with specific actions to be taken will be the best option. Be sure to include sections outlining the following areas:
Write an Executive Summary
The executive summary is a compilation of the highlights of your entire plan. This is the most important part of your entire document. Although this will be the first section of your business plan, it is highly recommended to write it last, to ensure that you have thoroughly thought through every aspect of the plan before summarizing it. The executive summary should briefly describe your product, your customer base, competition, and strategy.
Decide on a Business Concept
The business concept is a basic description of your restaurant and the need it will fill in the market. This is where you can describe what niche your concept fills, and what is different about your business that will make you stand apart from the competition.
Perform Market Analysis
Conducting a thorough market analysis will help you understand what you are up against. Who are you targeting as customers? Who is your competition and how do you compare? What differentiates you from these competitors? What share of the market are you capable of obtaining?
Create Your Marketing and Sales Strategy
What strategies and tactics do you plan to deploy to win market share? Your marketing strategy will be a living area of your business plan, in constant flux as you learn to better communicate with your target audience. The main point that needs to be considered is the channels of communication you plan to use to build your customer base, whether it be social media, digital advertising, or printed materials such as flyers and/or coupons.
Complete Your Restaurant’s Financial Projections
Your financial projections will show how you expect your restaurant to perform, based on your market analysis. Typically, a complete business plan will include a 3-year and 5-year plan, especially if you are seeking funding. Be sure to include forecasted income statements, forecasted balance sheets, expected cash flow statements, and planned capital expenditures. Most creditors will also want to see your projections broken down by quarter.
Create an Exit Strategy
This step is often overlooked but it is important to pre-plan – while you have a clear head – for hard decisions that may lay ahead. This is important no matter what your business structure. If you have partners or a corporation, an agreed upon (in writing) exit strategy can help avoid potential disagreements. Are you going to sell the business? Can one partner sell his shares and exit? Will you liquidate and split the profits?
A sole proprietor should also pre-plan an exit in writing. Will you eventually go public? Will you leave the business to your children, and who will get which responsibilities? If business is not going well, will you simply let your finances run dry then close the doors? Will you sell the business to a potential buyer? Questions such as these are the best way to create a multi-faceted, all-purpose business plan.
*Compeat is not associated with Bplans or Blackbox Business Plans and does not endorse their products or profit from the sale of their products. We just like that you can read sample business plans on their website to help with wording your own.