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Why it is essential to have a business plan for your Restaurant?

As a restaurant owner, it is essential to remember that your restaurant is still a business. This is why it is important that you have a thoroughly detailed business plan before you start up your restaurant. It is important that you plan your restaurant because restaurants have a very high failure rate so it is crucial you consider all of the different factors that will be included in running a business. You will not be able to deal with the expensive costs of starting and running a restaurant if you do not plan it properly.

Why it is essential to have a business plan for your Restaurant?

What is a Business plan?

A Business plan will display your business on paper. This means that you will be able to note down all of the start-up costs, overheads, annual budget and expected revenue. Your business plan should be very detailed and it will take a long time to complete an effective business plan. However, it is worth the time because it will allow you to see how much money you will need at all times to maintain your restaurant and pay your costs. This will allow you to know the sales you will have to make to succeed and will determine the prices that you will have to charge your customers. This will ensure that your restaurant will be able to survive. The business plan will allow you to identify any problems that your business could potentially face, this will allow you to change your business plan to resolve these issues before you start up the business. For example, if you were opening an Italian restaurant and there were two established Italian restaurants already in your local area, then you will be able to change the type of restaurant without any excess charge. Business plans are also important because they will be required to convince the bank to grant you a loan. The bank will want to see a detailed business plan and will want to see proof that you will make enough revenue to pay off your bank loan and survive as a business. You should ensure that you have all of the numbers for your projected sales, start-up costs and overheads so that you can convince the bank that your restaurant will be successful.

Research is Key

To create a detailed business plan, you will have to do a substantial amount of planning so that you can cover all aspects of your business and can deal with any sudden trends or changes in the restaurant market. You should ask potential customers how much they would like to pay for your products. This will allow you to find out how much you should price your products at. You should also research the prices of local suppliers so you know how much you will be spending on supplies per month. This gives you the opportunity to ensure that the prices you charge the customers will bring in a sufficient amount of profit to your restaurant. The needs and wants of your customers will change regularly, this means that you should research current trends and predict any future trends such as gluten free meals. This will allow your restaurant to continuously meet the needs and wants of the customer which will lead to the customers wanting to come to your restaurant. This will have a positive impact on your sales and profit margin. You should also research local restaurants in the area where you are planning to locate your restaurant. This will allow you to see how much competition you will have, this means that you will be able to decide if the location is suitable for your restaurant or not. There is an organisation called the Small Business Administration. This organisation will allow you to find all of the information that you need about the area you are looking to locate to, this will give you access to the local employment rates and population data.

Make your Business plan specific to you

When you are trying to get a loan or funding, it is essential that your business plan is specific and includes all of the facts and figures the investor will want to know. You should ensure that you research into all of the laws and taxes that your restaurant will have to adhere to as these could cause your restaurant to buckle and could lead to financial issues. It is essential that the business plan only includes information for your restaurant because the investor may get confused and may lead to them believing that you do not know how to run your restaurant. If you are dealing with a bank, you should provide your personal tax returns, criminal records, financial statement and your credit history. This will allow the banks to decide whether they can trust you as an individual to return the money. Your restaurant plan could be brilliant but if you have bad financial history, you can wave goodbye to a bank loan.

A wise man called Sir Winston Churchill once said “He who fails to plan is planning to fail.”

 

 

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