Business

What is a restaurant business plan?

By January 13, 2020 No Comments
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What is a restaurant business plan?

Restaurant Business Plan

Going into business without a business plan is like embarking on an unknown journey without a map.

Firstly, a business plan gives a small proprietor direction and insight into potential opportunities and ways to capitalize on these opportunities.  Secondly, a business plan will also highlight problems which will be encountered along the way.  Thirdly, a business plan helps to reduce the many risks that are involved in establishing or buying a business and helps to reduce uncertainty.

A business plan is not a product but a process.  It is like a flight path that a pilot plots before embarking on a flight.  The path is established because it is the easiest, safest way of getting to the destination.  In plotting the path, however, the pilot cannot foresee storms or other traffic which may prevent that course from being followed.  The pilot will, therefore, deviate away from the plan if circumstances change.  The pilot will still end up getting to the original destination.

Just like a flight path, the business plan is a strategy for reaching a set goal.  It must be monitored and altered as the business progresses through time.  This is a process which must continue from the time the business is established to when the business ceases to trade.  The planning must result in a written document – a business plan, which is reviewed from time to time as the proprietor adjusts to changing circumstances.

Why write a restaurant business plan?

Planning the direction of your business is the key to its future success.  Studies show and experts agree that businesses with formal plans in place have more successful businesses, irrespective of size or type.

Basically, a business plan does two things.  It outlines the opportunity the owner believes there is and it then explains how the opportunity will be seized to generate business and profit.

For example, a person may decide that there is a need for a pizza takeaway store in a new suburb because the nearest takeaway is over 10 kilometres away.  The business plan will look at whether there are enough people in the suburb to support the business.  For example,  the tastes of the people who live in the area and the best way of selling pizza to them.  It will set goals, such as how much the business needs to make in sales and profits and what proportion of the market it wants to serve.

A plan is very useful in determining which strategies a small business owner should adopt in running the business.  The pizza shop owner, for example, may firstly, want to decide whether it is better to price the pizzas below that of the nearest competition or secondly, charge more and produce a better quality product.

In writing the business plan, the business operator decides that the quality of the pizza is going to be much higher than any of the nearby pizza shops.  As well, the operator learns through market research, that the people who live in the surrounding suburb are the type who will be very discerning pizza eaters.  This process of thinking about the product and the customers has led the proprietor to decide that it is best to charge 15 percent more than the nearby competition.

Difficult decisions can be made easier by the planning process.

What goes into a restaurant business plan?

There is no single best way of going about the business planning process.

One thing is to keep in mind from the outset, is that the business plan must be short and the contents must be relevant to the user.  If it is wordy, it will not be read and it will not be used.

As well, effective planning must be goal-oriented rather than activity-oriented.  Activities should only be determined once the goals have been set.  For example, the pizza shop owner may decide to put a fridge magnet with the shop’s telephone number and address in every post-box in the suburb.  This activity should be fulfilling a goal, which in this case, is to make every household in the suburb aware of the pizza shop.

The pizza shop owner had determined a goal and designed an activity to achieve that goal.  This is far more effective than just doing something because it seems like a good idea.

Goals are not guesses or predictions, they are decisions or choices about future outcomes.  Once they have been established, they do not have to stay the same.  As circumstances change, so too, can goals change.

Essential elements of a restaurant business plan:

Executive summary

An overview of all the information included in the Business Plan.

Business and Management

A description of the business enterprise, its name, structure and the owner’s skills and expertise.

Operations Plan

Systems involved in the day-to-day running of the business: How goods will be produced, who will perform what tasks, what procedures and policies will be implemented and how business performance will be monitored.

Marketing Plan

Details of the sales objectives and the marketing strategies used to achieve them. 

What will be sold, at what price, to whom, from where and how it will be promoted.

Financial Plan

An evaluation of the enterprise’s potential to make a profit. Where the money is coming from, where it is going to, is the balance positive or negative and how much money is required for the business to operate at a profit.

Appendices

Restaurant Business Plan

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