A restaurant is an eating establishment in which people are served food, usually by waiters at their tables. In some cases, the food can be served from a counter. Restaurants are some of the most ubiquitous establishments in the world. Food services are often the business of choice when it comes to all year round businesses to do. No matter the prevailing conditions people will always need to grab a bite of something to eat daily. This is why it’s highly recommendable to enter the restaurant business space. There seems to be a picture that suggests that the market is flooded; that isn’t the case though. Your success in entering this space is heavily dependent on your value propositions and the unique approaches you’ll employ to secure a portion of the market. The restaurant business generally falls under the hospitality industry. It is a great business to start but requires diligent management skills. The prospects are there; you just need to actively manage all the moving parts of your restaurant. This article will outline how to start the restaurant business, and the restaurant business plan – PDF, Word and Excel.
Business Model
Making money from a restaurant business depends on the nature of your restaurant. There are many options to choose from and options can be blended too. Broadly, there are full service restaurants and limited service restaurants. Another broad look at the types of restaurants falls into 3 classes namely, fine dining, casual dining, and fast casual. You could also consider restaurants types depending on menus, how food is prepared, prices, seating arrangements, and how the food is served. Some examples of restaurants are bars, diners, cafes, fast food outlets, cafeterias, steakhouses, pizzerias, family style, food trucks, and so on. The typical approach is customers order something and they pay the bill once done. Thus you have room to price your food services the way you see fit. It is basically about creating a perception of value in the customer’s mind. That is why the same dish can be priced differently by two different restaurants. Some of the most profitable restaurant models are bars, diners, food trucks, and pizzerias.
Market Research
Before you go further along with the restaurant business this must be your primary focus. Who do you intend to cater for? This question is your launch pad into ultimately coming up with a comprehensive marketing strategy for your restaurant business. In fact, insights from your market research have ripple effects towards all other components in setting up the restaurant business. You must appreciate the fact that you must niche which entails targeting a particular market. It’s not that easy to cater for the whole breadth of the market because that might be unsustainable due to high costs. Therefore you must be diligent enough to figure out which specific portion of the market you’ll target. When conducting market research you must closely study people’s eating out behaviours, check the age range dynamics and also analyse the levels of income of your prospective target market.
Make sure you have a comprehensive restaurant business plan
The failure to plan is the beginning of business failure. The restaurant business plan must be clear and succinct enough to give your potential partners, clients and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain your business well. Your restaurant business plan should have financial statements which show that your business is viable and profitable.
Location And Premises for a Restaurant
This here is a component that’ll be greatly informed by your target market. You want a scenario where your restaurant is ideally located at a spot characterised by high volume vehicle and foot traffic. It shouldn’t just be about traffic only though; it must be close to or in an area where your intended customers are abundantly found. Another vital feature to consider is the availability of adequate and secure parking space and easy access to mass transportation. Earlier on I talked about the seeming nature of a crowded market right? Well, what this essentially means is that the restaurants market is highly competitive. So your location of the restaurant must consider where competitors are located so that you figure out a way to outsmart them. The witty approach to take is to locate your restaurant in an area close to other businesses that can lead to customer inflows for you. For instance, locating it at a shopping area or central business district (CBD) creates prospects of regular customer inflows. Your restaurant business plan should cater for the costs of buying or leasing the restaurant premises.
Competitive Analysis
The restaurant business is highly competitive for the most part. If you carefully consider your choice of location you can almost enjoy a monopoly in some places. As a rule of thumb you must study the nature of your target market or location. Are there any competitors and who are they? Find out the type of services they offer and their pricing. Investigate the type of customers that frequent those restaurants. You can actually visit those competitor restaurants to experience them personally.
Figure out their competitive advantages which you should seek to emulate and perfect. Find out also the major challenges they are facing. Those challenges can become your focus in building your competitive advantages. Some of the common challenges restaurants are facing are high operating costs, limited human resources, and supply chain complications. These often compromise pricing flexibility. If you can find ways to streamline those 3 areas you can become the dominant restaurant business in your location.
Equipment needed to start a restaurant business
Starting a restaurant business is no doubt capital-intensive because there’s a wide range of equipment you’ll require. If you’re to setup an alluring restaurant that’s superior to other players then be prepared to part ways with some significant amounts of money. You need to rent or setup your restaurant premises. You’ll have to furnish the restaurant with items such as tables, chairs, counters, booths, decoration material, cloths, mats and so on. Various kinds of wares will be needed e.g. barware, silverware and glassware. Different types or sets of utensils are also required such as pans, pots, plates, knives, spoons and so on. There are also appliances that’ll be needed e.g. stoves, refrigerators, freezers, grills, microwaves, ovens, just to mention a few. A well-constituted working area comprising of tables, countertops, sinks and the like will be a must-have. The costs of purchasing the equipment should be included in the restaurant business plan.
Permits/Licenses, Insurance & Business Bank Account
The foremost thing is to register your restaurant as a formal business or company. A restaurant business is classified under the food and drink segment. Food service businesses are normally supposed to be licensed in order to operate. You have to approach your respective local authorities to apply for such an operating license. There are strict standards your premises and operations will have to adhere to.
Get your restaurant business insured. This will cushion you from a long list of possible incidentals. It is also a smart business move to open a business bank account for your restaurant business. This is the bank account from which you will handle all the business finances. This cushions your personal finances from being liable for any financial issues pertaining to the restaurant business.
Restaurant Menu
The products which your restaurant business will offer will depend on your target market and restaurant type. There are variety of types of restaurants which include fine dining, casual dining, fast foods restaurant, cafe, ethnic, family style etc. There is a wide variety of products which the restaurants can offer. All the comfort food you can think of is sold at restaurants. The important thing is to provide a variety of products for customers to choose from, which are healthy, well prepared, delicious, affordable and attractive. Your menu will depend on your target market. It is of great importance to consider the profit margins of your products, as this is a business and it has to be profitable. The markups in the restaurant sector can be as low as 50% and as high as 400%. You should also strive to push volumes up, in order to increase your revenue and profits. The restaurant business plan should include the costs of purchasing the required raw materials.
Staff And Management
You restaurant should have sufficient number of well trained staff. This is because repeat purchases and ever-growing customer inflows are a product of swift and quality service from the staff. Having a small or skeletal staff makes it very difficult to provide swift service. Remember we are living in a fast-paced world where people don’t want to be kept waiting for too long. That being said there’s also the issue of the costly nature of having a significantly big staff. What this then means is that you must find a way of striking a healthy balance between the need to have adequate staff and keeping human resources costs at bay. The salaries of all your employees must be catered for in the restaurant business plan.
You must also pay close attention to the welfare and morale of your workers. In fact, in hiring employees please ensure that you employ only those who exhibit impeccable drive, passion and high regard for customer needs. Employee turnover is very prevalent in the restaurant business due to frustrations stemming from dissatisfied employees. If you check closely you’ll notice that frustrations can emanate from under-staffing leading to adverse pressure on the few employees (which can be coupled with low remuneration). Not many people are needed in terms of the management side – often times family members can be the de-facto management for a small restaurant business. This helps in minimizing operating costs plus their inherent drive to see the business succeed.
Marketing Strategies
You must build a solid online presence. Most prospects look for or research about restaurants online. You need a website and social media accounts for your restaurant business. Use high definition visuals; prospects are usually attracted by stunning food visuals. Find ways to build an email list and conduct email marketing. Conduct online contests to drive engagement and word of mouth. Build a customer loyalty programme to convert your customers into marketing tools. Engage social media influencers. List your restaurant business on online business listings or put it up on online marketplaces. Invest in putting alluring signage at strategic spots. Attend or participate in strategic events to build brand awareness for your restaurant business.
You must invest in proper branding and extensive marketing drives (especially on the internet and social media). Figure out competitive pricing regimes that can tip your competition over. One way to attract customers is by coming up with regular specials. Hygiene and presentation of your service offering and premises are paramount to a favourable brand image. Take your time to conduct customer surveys in order to fully acquaint yourself with what exactly your customers like or dislike. Your restaurant business plan should have a proper marketing plan.
Keys To Profitability
Effective Inventory Management Is Crucial
Several studies have shown that effectively managing your inventory is central to profitability. It is wise to have a system of regular inventory checks. This even helps avoid incidences of food getting wasted from rotting or deteriorating in quality. Just by diligently keeping your inventory in check you can boost your profits by over 20 percent. Even your costs can go down by at least 5 percent.
Importance Of Social Proofs
If you want to see significant customer inflows, you will need social proofs. The restaurant business thrives most on social proofs. That is why you need to work on building a body of positive reviews for your restaurant business. If you cultivate social proofs you can enjoy revenue getting boosted by on average 10 percent. Reviews and testimonials are a must-have for the restaurant business.
Offer Delivery Options
The food delivery trend is here to stay. In essence your restaurant business must not only offer sit-in options. At the most basic, customers should be able to opt for take-out options. Then there should be an option for deliveries. This will tap into that demographic of people who cannot physically make it to the restaurant. Making those options available for your restaurant will appeal to more customers.
That is what you need to know about starting a restaurant business. It is vital that you keep an eye on emerging trends. The restaurant business typically evolves fast due to technological innovations. As such you need to gear up for what the future holds. Otherwise you will fail to keep up with your competitors. Work towards providing the best customer experiences. There are too many restaurant options so customers can migrate if dissatisfied. Streamline your supply chain as well; this can distinguish your restaurant business.
Pre-Written Restaurant Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements
For an in-depth analysis of the restaurant business, we encourage you to purchase our well-researched and comprehensive restaurant business plan. We introduced the business plans after discovering that many were venturing into the restaurant business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.
The StartupBiz Global restaurant business plan will make it easier for you to launch and run your restaurant business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the restaurant business.
Uses of the Restaurant Business Plan (PDF, Word And Excel)
The restaurant business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your restaurant business
- As a restaurant business proposal
- Assessing profitability of the restaurant business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Restaurant Business Plan (PDF, Word And Excel)
The restaurant business plan include, but not limited to:
- Marketing Strategy
- Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
- Industry Analysis
- Market Analysis
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Why some people in the restaurant business fail, so that you can avoid their mistakes
- Ways to raise capital to start your restaurant business
The restaurant business plan package consists of 4 files
- Restaurant Business Plan – PDF file (Comprehensive Version – 76 Pages)
- Restaurant Business Plan – Editable Word File (Comprehensive Version – 76 Pages)
- Restaurant Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 41 pages)
- Restaurant Business Plan Automated Financial Statements – (Editable Excel File)
The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the percentage markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change.
Click below to download the Contents Page of the Restaurant Business Plan (PDF)
Get the Restaurant Business Plan (PDF, Word And Excel)
Click Buy Now below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link.
The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!
If you want to purchase multiple business plans at once then click here: Business Plans Store.
The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on shop@startupbizglobal.com and we will assist you.
We wish you the best in your restaurant business! Check out our collection of business plans , and more business ideas.
