| A restaurant business plan will bring the banker a little
bit closer to your kitchen.
KEY CONSIDERATION
One of my very favorite restaurants is a small mom and pop that
seats about 40 people and offers one prix fixe dinner each day.
It is hugely successful. And I pass by about six hamburger
joints on the way to the best one. Even truckers frequent the
best greasy spoon.
Moral: You don't have to be big to be successful. But you do
have to offer excellent cuisine.
STRONGEST ADVANTAGE IN YOUR RESTAURANT BUSINESS PLAN
Having a meal out is an international custom. That's not going
to change anytime soon.
STRONGEST DISADVANTAGE IN YOUR BUSINESS PLAN FOR A RESTAURANT
In spite of what we said above, knowing how to cook is not the
secret to success. Marketing is. Nobody is going to find that
great little restaurant, or even the hamburger joint, without
some serious promotion. It doesn't have to be freebie coupons or
full page ads, but there must be a way of getting word out about
your business. Without that, you will have a tough time.
It's a lot easier promoting a business in a smaller geographic
area than in larger ones. For instance, a new restaurant in
Tucson, Arizona, has a better chance than a new one in New York.
It just costs so much more to advertise and promote in big
cities. If you're in a smaller town, you've got a head start.
You've also got a head start if you can tie your restaurant to a
defined ethnic group or specialty. People from all over the
world stop at the Giant Artichoke in Castroville, California.
It's not a great restaurant. But it's got a great niche.
OVERCOMING THE DISADVANTAGE WITH YOUR RESTAURANT
BUSINESS PLAN
Focus your efforts on a defined geographic area.
Unless your restaurant will be on Chicago's State Street, or the
Golden Triangle in Beverly Hills, not a lot of people are going
to drive very far to visit you. Find out all you can about your
potential area, such as
- Number of people
- Income level
- Educational level
- Ethnic hubs nearby
- Family composition
- Number and location of existing restaurants
... and anything else you can dig up.
Prove restaurant business plans that you have the marketing
background and skill to make the restaurant successful.
Hit the decks running with a full blown marketing plan ready.
More than anything else, this is what will demonstrate to the
lender/investor that you have what it takes to successfully
operate a restaurant. Your lender may not especially enjoy
Taiwanese cuisine, but she will recognize a great marketing
plan.
Devote a minimum of 5-8 pages
of your restaurant
business plan to your specific marketing plan.
- Identify your core clientele.
- Identify the number of your core clientele in your immediate
area.
- Have some initial ads or promotions developed to demonstrate
your skill in this area.
- If you have any celebrity endorsements, flaunt it.
- Present menus that you have developed.
- Detail how you will get free publicity -- this will be essential
for your success.
Base your projections of valid, provable statistics. No pie in
the sky here -- it just won't fly. Business plans for
restaurants need to be on solid footing.
OTHER PLUSSES FROM YOUR RESTAURANT BUSINESS PLAN
This is a business that demands a broad spectrum of knowledge
and experience, from health department regulations to parking
and signage issues, and your business plan for a restaurant
needs to demonstrate your knowledge. There is no on the job
training. If you are going to successfully operate a restaurant
of any size, know your stuff before ever approaching a lender or
investor.
A free sample restaurant business plan can provide the outline,
such as those at the end of this book.
But you need to dig for the local rules and regs that will
affect your business. Prove that you have done so, and that your
business plan takes these rules and regs into consideration.
FOR ADDITIONAL INFORMATION FOR YOUR RESTAURANT
BUSINESS PLAN AND A RESTAURANT MARKETING PLAN
If you are locating in a retail center, contact the
owner/manager of the retail center for demographic information.
Also go to your city or county planning department where you
can get traffic counts and information on housing and
construction in that area. Restaurant business plans need all
the documentation they can muster.
For statistical information for your marketing plan for your
restaurant, go to
BizMiner.
At the home page, look on the bottom of the page. You will see
"Restaurants" as a general industry. Click on that.
On the next page, choose from
- Casual dining
- Drinking places
- Food services or
- Specialty restaurants
Depending on which option you choose, you will have the choice
of Financial Analysis and Marketing Research on literally
hundreds of different types of restaurants. BizMiner gathers
this information from thousands of existing businesses, and
presents its findings in these reports. Your lender/investor
will use these reports to see if your projections are on target,
so it's a good idea for you to review them as well.
Some of the types of restaurants that BizMiner provides business
plan statistical information for include:
- Retail bakeries
- Bagels
- Cakes
- Cookies
- Coffee shop
- American restaurant
- Delicatessen
- Lunchrooms and cafeterias
- Luncheonette
- Family restaurant
- Cafe
- Diner
- Fast food restaurant and stands
- Carry-out only
- Chili stand
- Coffee shop
- Grills
- Hot dog stand
- Pizza Restaurant
- Cajun restaurant
- Chinese restaurant
- French restaurant
- German restaurant
- Greek restaurant
- Indian/Pakistan restaurant
- Italian restaurant
- Japanese restaurant
- Korean restaurant
- Lebanese restaurant
- Mexican restaurant
- Spanish restaurant
- Sushi bar
- Thai restaurant
- Vietnamese restaurant
- Pakistani restaurant
- Seafood restaurants
- Oyster bar
- Seafood shack
- Steak and barbecue restaurants
- Chicken restaurant
- Dinner theater
- Health food restaurant
There's a huge amount of information to choose from. If one
category doesn't quite fit, get the information on two related
categories and compare them. This is exactly the kind of
information your restaurant business plan needs to
really punch it up a few notches.
Be sure to look in the left hand column of that page for the
LOCAL BUSINESS VITALITY reports compiled from US Census
statistics. You will find a wealth of information on your area,
with age, income level, housing type, educational level, etc. --
everything you need to target your customer base in your restaurant business plan.
YOUR LIKELY LENDER/INVESTOR FOR YOUR RESTAURANT BUSINESS PLAN
The
SBA is usually your best bet.
If, however, you are planning on regional or national expansion,
or if this is NOT your first restaurant, check out appropriate
venture capital groups in your area. And be sure to check out
the newest development in venture capital:
venture lending.
YOUR ONLINE PRESENCE
I know one very popular little
restaurant in New York whose sole promotion is putting out a
newsletter via email every month. It is a chatty
newsletter, usually with a recipe. Thousands of people,
most who were customers, subscribe (for free) to this
newsletter. And the little restaurant is jammed to the
ceiling every single day. Don't discount the Power of the Web.
It is immense power.
Odds are that you will want to promote your business online.
Potential guests, as well as lenders/investors, want to see what
you can do. So strut your stuff.
CUSTOMIZING THIS RESTAURANT
BUSINESS PLAN
You may need to customize this plan for your specialty
restaurant, and that's fine. Use the information from BizMiner,
and from your own background, to create your own
- bakery business plan,
- breakfast cafe business plan,
- burger stand business plan,
- cafe business plan,
- cake decorating business plan,
- ice cream parlor business plan,
- Indian restaurant business plan,
- Italian restaurant business plan,
- jazz cafe business plan, and
many other restaurant business plans.
YOUR RESTAURANT BUSINESS PLAN
Restaurants have one of the highest failure rates of all
businesses. Your lender knows that. It is your job to convince
your lender that you know what you're doing, and a strong
business plan is just the ticket to get you there. Start out
with a restaurant business plan, then continue to
demonstrate your own strength as an entrepreneur.
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