The process of opening a restaurant from start to finish can be, and should be, an arduous one. It requires a tremendous amount of research and determination, and it can easily get overwhelming. I am often asked by clients, “What should I be doing?” It’s the right question, but not easily answered. Why? Because there is a whole array of things that must be done simultaneously in opening any business, but especially one as complex as a restaurant.
So, where do you start? With a plan, of course. Without one, it’s like shooting from the hip. Just trusting your instincts is a recipe for failure. “If you don’t know where you’re going, you are unlikely to get anywhere worthwhile.” So you begin with a business plan, a proven foundation of success and the road map to your dream becoming reality. A quotation worth remembering and putting into practice is, “Failing to plan is planning to fail” The 7 Habits of Highly Effective People, Stephen R. Covey).
Let’s outline two important steps necessary to create a successful business plan:
1. You must have an idea of the type of restaurant you want. That means coming up with a well-thought-out concept, visualizing it with graphics, and describing in writing. Your entire business plan will evolve from this: how to bring that dream restaurant to life; how to give it its unique personality; and what makes it different from other restaurants.
2. Study successful restaurants in order to formulate a model that fits what you have in mind. You don’t have to copy them, just determine why you think they are successful. Is it their food? Is it their friendly service or atmosphere? Most likely it will be all three, fitting together to form a total concept: great food, prompt and attentive service, and a comfortable, if not unique, atmosphere.
When I suggest learning from observing other successful restaurants, keep this thought in mind. Your restaurant idea must be uniquely yours. Combine the best parts of other successful restaurants into your own creative version of what you want. Perhaps it’s the personal service and unique food presentation that you have enjoyed at one restaurant, or the décor theme at another. Blend all the elements that you feel make those restaurants successful into your own total concept of food, atmosphere, and service, and you will have created your own original.
First, make an outline of what your business plan will include. Remember, BE SPECIFIC! Writing a business plan forces you to think through where you are going, how you plan to get there, and is it
a tried and true road map to success? By organizing your thinking, you are more able to translate your thoughts to paper and watch a rigorous plan of action begin to take form.
A SUGGESTED OUTLINE FOR THE BUSINESS PLAN
The Executive Summary: Your Executive Summary should be brief well-thought-out, condensed version of the business plan, a blueprint in developing your restaurant concept. The executive summary provides a banker, or potential investor, an insight into your thinking and an implied promise for profits.
The Company Structure: Describe the legal business entity that you have selected to conduct your business as. Your accountant and lawyer will advise you based on your personal circumstances.
Restaurant Service Categories: How will you deliver service to your customers? Are you thinking of table service, with a wait and bus staff, or the limited staff of fast-food or fast-casual service systems? your service concept will determine the qualifications required of the employees you will hire and the pay scale appropriate to each.
Service: What attitude and personality should your service staff display? How will they interact with your customers? From behind a counter, in a fast food setting, or up close and personal, taking and bringing orders directly to the table with a smile.
Menu: Write out your menu. Be specific, with a detailed description of each menu item and projected pricing. Explain why you have selected the menu items and how they relate to your service system. Making a Caesar salad table-side does not work in a fast food restaurant. The menu and your service system are the foundation of your restaurant.
Customer Profile: In this section, you will describe your target customers, clarifying who your target market potential customers are: their age, sex, income, occupation, marital status. Present as clear a profile of your targeted customer as possible, with a sharp eye to demographics. Write out what you think it is, and then support your supposition with facts to back up how you perceive the demographics.
Competition: What are the other restaurants in the immediate area of your location? How does your concept for food, service, décor, and atmosphere differ from them? Which types of restaurants are doing the best business?
Marketing Strategy: Outline your marketing strategy, point by point. Show how it meshes with your concept. A profile of your target market is essential, especially the specific market within a one- to three-mile radius of your restaurant location.
Location, Location, Location: Explain why you chose the location of your restaurant and why you feel it is best-suited to attract customers. Highlight the important demographics of your location, and why the menu, theme, and décor closely match the profile of your target market.
Management: State in detail what your management strategy will be. Will the principal owner, or owners, function as general manager or will you hire an experienced GM? Either way works, as long as you, the owner, are focused on doing the right things, and making sure that your manager is doing things right, that is, those things that make a restaurant profitable. State the key positions of your management team.
Operational Systems: Define your operational systems, the navigational instruments and rudder of your great ship. How will you ensure training, consistent ongoing operations, and effective controls? This should be summarized in your Business Plan.
Financial Requirements: Show your financial requirements in four primary areas:
1. Construction build-out cost per square Foot
2. FF&E (furniture, fixtures & equipment), including the décor package—pictures/paintings, etc.
3. Professional fees: legal, accounting, architectural, licenses, permits, and miscellaneous fees
4. Working capital: enough for opening inventories, pre-opening expenses such as training, and staying power while the business revs up
Interior Floor Plan and Elevation Renderings: In this section of your business plan, you will need to provide a floor plan and elevation rendering of your restaurant.
Sales, Profit & Loss Projections: This section should show, in spreadsheet format, sales projections, which are critical to establishing a budget. The sum of rent, food costs, and labor costs subtracted from sales will determine the majority of your bottom line.
Now you have a plan to follow that will be essential for success. Proper implementation of the plan is equally important, and will take experienced leadership with the right people.
For professional restaurant consulting services to start your new restaurant, contact one of W&W Restaurant Consulting Group’s representatives and get your restaurant off the group with the best business planning.
Call us at 303-941-8884 or Contact Us by email for more information.