A New Restaurant

Welcome back to the overview of a business plan. Yesterday I wrote about the Executive Summary, Company Analysis, Industry Analysis, and Customer Analysis. Today I’ll wrap up the overview.

Competitive Analysis

Every business has competition. There may not be any restaurants in the area that offer the same mix of food and services, but there are businesses that are competing for the same entertainment dollars. A good way to handle this is to list out your competitors as direct and indirect competitors. Don’t feel like listing your competition is a bad thing. It’s natural to fear that investors will see too much competition as a bad thing. If you did your Customer Analysis and are able to show how you can meet the customer’s needs, you don’t have anything to worry about. In fact, many investors will see a lack of competitors as a bad thing. If there are no other restaurants in the area, investors will look for a reason they are not there.

This is where you get to talk about that competition. List out who those competitors are, where they are vulnerable, and how you plan on taking advantage of that vulnerability.

Marketing Plan

Many restaurants open up with a Field of Dreams mentality (“If you build it, they will come.”). Not so much. Yes, if you have a great location people will see you and come in to try it, and over time you will start to build up a regular customer base, but to really get people in the seats you need to market your restaurant. Remember the Four P’s from Marketing 101; Product, Promotions, Price, and Place.

Show your investors that you understand what you have, and how you are going to let your customers know what you have. What are your products? What is the price point you are selling your products at? What promotions are you doing to let customers know about your restaurant, and what incentive do they have to come through the doors?

Operations Plan

This is about the day to day operation of your restaurant. Until know, everything has been discussing your vision for the company, and your understanding of the market place. Now is your chance to show that you understand how to run your business.

The Operations Plan discusses what tasks need to be done on an ongoing basis to keep the operation running smoothly. You laid out your Marketing Plan to get customers in, now you have to show how you are going to deliver what you promised. This is also where you can mention any milestones or benchmarks you have set for the restaurant.

Management Team

For many investors, this is the most critical piece of the business plan. Some investors have said that they would rather invest in a mediocre idea with a great management team than in a great idea with a mediocre management team. The idea being, a great team will find a way to succeed.

Even if the management team is just you, you have to be able to sell yourself as being uniquely qualified to run this restaurant. If you truly believe you have what it takes to succeed where so many others have failed, you better be able to convince potential investors. What are your experiences and education? Sell your self. In reality, the investors aren’t investing in your restaurant as much as they are investing in you and your team.

Financial Plan

Now you get to show how your vision will be able to be converted into profits. Your Financial Plan should include 5-year projections and 12-month detailed projections of:

• Projected Income Statement
• Projected Cash Flow Statement
• Projected Balance Sheet
• Sales Projections

You should also list out any and all assumptions you used in calculating your financial statements, including tax rates, interest rates, and employee benefit payments.

Appendix

In the Appendix you should include any documents that support the materials that you have in the earlier parts of the business plan. You can also include resumes for the management team, and any letters of recommendation you may have gotten.

So you can see, there’s a lot there. Hopefully this helps you see how it all goes together. Make sure you cover each area well, and you’ll be in great shape.