There is More to a Restaurant Business Plan than Words and Numbers
Many entrepreneurs know they need a business plan. They go online, get a form and fill in the blanks. The small booklet of data is a document they are proud of. It spells out the general ideas behind the concept, estimated revenue projections, management plans and, hopefully, a marketing plan to get the guests in the door. Proud of their accomplishment, they put the task aside and move on to the business of opening a restaurant.
However, your restaurant business plan is not a conceptual exercise. It is a working roadmap to get from concept to opening and beyond. The roadmap has challenges along the way. Costs go up. You can fit in 20 more seats than planned. Your final menu is more expensive than planned. All of these things affect your profitability, revenues and even needed equipment to open your doors.
When differences occur, they need to be incorporated into the business plan. You need to know how cash flow will be affected, your profitability will change and even more importantly, your cash needs. Can you open your doors with enough capital to sustain your operation? More restaurants fail because of low cash reserves than any other single reason.
The process to create a restaurant business plan must be a mental exercise that separates reality from assumptions. While a pre-worded document that just requires filling in the blanks is convenient and shortens the task, it shouldn’t stop your thinking process. All the “what if’s” need explored. What if we increase per person check amount by 75¢? What happens if the equipment costs $10,000 more than projected? What if you forgot the CAM charges on the lease? What if your menu ingredients cost 8% more than projected? What if all of these occurred at the same time? All of these need explored to know how your restaurant would look financially with relative minor changes.
By all means start with a document that makes your writing easier and covers all topics, but don’t forget the real value is the mental exercise that helps you understand how little and big changes can affect your ability to survive and grow.
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