The process of taking an idea that's been percolating in your head for a while to an actual, sustainable business isn't easy. Execution is never a linear path and imposter syndrome is a real phenomenon. Fortunately, some resources can point you in the right direction; we recommend starting by writing a business plan as it brings clarity to your vision. In this article, we'll try to unearth the practical steps for writing a business plan for a new restaurant.
If you're reading this, it's likely that you're interested in operating and managing your own eatery. We'll take you through some of the finer points behind this endeavor and how you can prime yourself for success. Conceptualizing a well-crafted plan is an excellent idea, especially when you consider that 60 percent of restaurants fail in their first year.
Plainly speaking, a business plan represents the vision of your proposed company. Not all founders are interested in creating the new Amazon or Facebook. Many people want to pursue something where their passion and interests are closely aligned; for restaurants, this may translate into how a love for Thai food became a new venture. If you are unsatisfied with the culinary experiences in your city, then it's possible that you may want to show others how it's done. This represents a neat juxtaposition behind your passion (food, in this instance) and the problem it solves (lack of quality establishments).
A business plan can be written in a variety of formats but what's more important is the areas it covers. It's necessary to have a rough outline of your target market which includes demographics, incumbents, and its overall size. After giving a high-level overview, you also want to include your go-to-market strategy and a detailed financial breakdown which lists your likely capital and operational expenditure, headcount, and when you project to break even.
Let's discuss the modalities of this strategy and what a typical structure looks like.
The introductory part of your plan will outline clearly the mission statement you see for your restaurant. Perhaps it is to create a culinary experience like no other. It's important to elucidate this mission clearly to all your employees and keep refreshing it at regular intervals so that everyone's aligned. The next few slides should talk about your competitors and the strengths of the founding team.
We alluded to this earlier as the 'high-level overview.' In a nutshell, this should encapsulate each and every dynamic of the market that you're trying to enter. So, if you aim to build a fast-food restaurant in New York, then you need to talk about the market share of existing players, how that's changed over time, and their current pricing. In the latter part, strive to identify potential gaps in the market which you can meet.
Now you're getting to the part that discusses your proposed vision in minute detail. How will your restaurant set itself apart from others? What are your key goals and objectives within a specific timeframe? Try to break these down into quarterly and annual goals so that you can keep track of what's working and what isn't.
No business can operate without a healthy amount of initial and working capital. In this part of your strategy, you need to envision how much seed financing your venture will require. Some things to consider are the costs of interior designing, furniture, cutlery, and hiring staff. Your menu, pricing, and projected visitors should also be factored in. Of course, you're in the business for the long run so try to estimate how much you will grow year-on-year in terms of revenue.