A restaurant business plan explains to your potential lenders and investors how your restaurant will succeed in the competitive restaurant industry. Within this plan, a case must be made that diners have a real need for your restaurant, that you have the capacity to build a successful restaurant business and that the numbers make sense. Make sure that these cases are compelling and your business plan is off to a great start.
The Need: Customer Analysis
The description of the customer need for the restaurant is within the Customer Analysis section of the business plan. This details who those customers are, including their demographics (age, income, family status, etc) and psychographics (what they value and how they make decisions).
Being the first restaurant of your kind is not necessary – it can be an extra challenge to make the case that customers will try an untested cuisine. With a tried and true product (say barbecue), you have to walk the line between showing that your cuisine has a proven market of diners and showing that there is still some unmet need of customers in your geographic area for the type of barbecue restaurant that you will be.
Your Capacity: Management Team
The case for why you and the team you are assembling are in a great position to be able to execute the restaurant plan is within the Management Team section of the plan. It is here that you must show investors that the idea and opportunity you’ve spotted will have a better chance of succeeding if you or your chosen managers are calling the shots rather than someone else. Use bios or resumes to show that you and your team have previous experience operating restaurants or that the other experience you have is very transferable.
The evidence of your ability to operate the business is also, in a sense, shown throughout the business plan by the depth of understanding of your industry, your business, and the unique challenges you will face. Taking the time to show your understanding and ability to plan through careful and organized writing is great support for the case you are making. On the other hand, if the plan is poorly written or disorganized it is a black mark against your ability to execute.
The Numbers: Financial Plan
Finally, the numbers have to make the case for the business. They have to show realistic projections of revenue you can expect to earn based on thought out and explained assumptions of the key revenue drivers. They have to show you understand both the startup costs and how to calculate the ongoing costs of the business. And they must show that the return in profits over the years will allow for adequate dividends to investors or position the restaurant for a strategic sale at a future date.
Want more tips? Here’s a related article: How to Start a Restaurant.
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