Nowadays, we live in a very competitive and volatile economy. No matter how good you are in a certain area, you will always have to reinvent yourself and adapt to the current economical trends. There are many young entrepreneurs who tend to forget about this and just soar into the restaurant business environment, without a proper restaurant business plan. This will inevitably lead to failure and to a disastrous outcome for their business, even before their restaurants open. The same thing applies no matter what business it is you need a business plan. Taking care of the design, menu, and training of your crew will always be beneficial for your restaurant startup, but that's not all of it.
Opening your Restaurant to Fast
The lack of a restaurant business plan will have a severely negative effect on your restaurant and you might even start losing money without even knowing why if you don’t have a proper business plan. A common mistake is rushing into your restaurant without having everything in place. I know this from opening our second restaurant. Usually, a restaurant needs time to gather its clientele and make a name for itself. All of these can be solved with a proper strategy and below, we will tell you more about the importance of having a restaurant business plan.
1) Better chances of getting a source of financing
Opening a restaurant can be very costly unless you follow a plan from someone that has already done it or you have done it yourself before. Chances are though you don’t have all the money to open a restaurant. That's why you will need an investor to co-finance your new restaurant business. But no matter how passionate and dedicate you are, they will all have one big question: "What's your restaurant's business plan look like?" Depending on your answer, they will decide if they want to invest in your idea or not. If you have a proper business plan, with achievable targets and a well-developed strategy, your chances of receiving their money will significantly improve.
2) Better organization
Owning a restaurant is a lot different than eating at one or working at one. Owning your own restaurant is way more complicated than it looks. There are many administrative tasks that you need to handle and not all of them are enjoyable. But you are the owner of the restaurant, and you need to take care of them. However, in this multitude of tasks, it's very easy to get confused and to forget what are the next steps and what have you done so far. A proper business plan will solve that problem for you and it will help you organize your tasks in a better way. Also, a business plan will help you perform all the necessary steps, so you won't forget anything. The best thing to do is to check off each task as you complete it.
3) Better capital and time management
When you own a restaurant, you have two main resources, equally important: time and money. If you neglect any of them, your business will start going down. But it's more simple to manage those two resources if you develop a restaurant business plan. A good strategy will let you utilize your resources to their maximum potential. After you develop a business plan, you will be able to understand where your money is being spent. Also, you can observe which are the most time-consuming tasks that your restaurant requires and if they are worth the time. If they aren’t, you can replace them with something else.
4) Makes you understand the business
Whenever you have a new plan or a new idea, just put it on paper. It will help you analyze them better, to see if it is actually accomplishable and what will simply not work. Also, you can develop a three years plan, in which you could screen your main goals and expectations from your restaurant. A restaurant business plan will let you adapt easily to the market and let you "pull the wheel" when the situation requires it. If it happens to make mistakes, a business plan will let you have a record of them. This way, you know what you did wrong, analyze those decisions and prevent them from happening ever again. For better results, you should use a standard business plan format. It comes with some interesting questions, and their answers represent the future of your restaurant.
What’s it going to take
Opening a restaurant or any kind of business can be a tough move in today's economy. But with a well-developed restaurant business plan, with a reliable source of financing and with dedication, you may be able to do it and to even record profit in a short time. Whenever you get stuck and don't know what to do next, remember that there are always specialists, who will help you. Just make sure that you ask for help when you can't handle things because there's nothing more important than the future of your business.
As with any business startup, there is a process. All the blocks need to be stacked in order for your business to take off. If you rush into it without doing the proper research you have just upped your chance of failure by 80%. Take the time to research and put together the proper plan. The average time it takes someone to get their first restaurant open is between 2 to 7 years. I still like going back and looking at all my research I did before opening my first restaurant. It helps keep me focused. Enjoy the process as well, its a lot of fun when you look back on it.
*results may vary