How to Write a Great Restaurant Business Plan
Wednesday, November 30th, 2011Watching a season of Iron Chef does not make one a successful restaurant owner. Owning a restaurant is hard work, yet many people make the decision to open their own restaurants with their hearts instead of their heads. They fall in love with the idea of being their own boss and serving creative dishes to happy paying customers. For many, the reality is very different.
A restaurant usually requires the owner to work six to seven days a week, often starting early and finishing late. There are suppliers to deal with, casual staff to manage, fickle customers to keep happy, ever changing laws and regulations to keep across, and the day to day operational requirements of keeping the lights on.
Maintaining profit margins is always a battle, and any changes to the economic condition of the area you operate in, as well as any new competitors, can have a big impact on your bottom line.
It’s therefore critical that you do your homework and know exactly what you are getting into before you commit to buying or setting up your own new restaurant. One way to do this is to prepare a business plan with a professional planner. The process of preparing your business plan will help you identify the strengths and weaknesses of your business, and define the strategies and tactics you will employ to meet your profit expectations. The process will also help you research the industry, understand success factors and trends, and identify your direct competition.
As part of your restaurant business plan, you should also undertake a minimum two year cash flow forecast, to identify any times through the year when your ability to service your debt may come under pressure. That way, you can prepare budgeting strategies now to keep your business liquid through traditionally slower parts of the year.