Key Elements of a Restaurant Business Plan
A business plan is written and detailed description of the entrepreneur’s future business. It is a blueprint that describes what an entrepreneur plans to do and how he will do it. In simple and comprehensive definition business plan is written document elaborating the type of the business, sales and marketing methods and financial background of the business which involves projected profit and loss statement (Robbins, 2015).
A well-written business plan should help an entrepreneur to attract either equity or debt financing (Entrepreneur Media, Inc, 2016). This means that the plan should offer a benchmark against where a company performance can be compared with its actual performance. Even though the business plan for a new venture should be written according to the nature of the business and industry, it is important to consider some of the major elements that should be included (Thomson Reuters., 2017). For example for new restaurant business plan, following elements must be included;
Executive Summary: Key issues covered in this section include;
- Company market
- Marketing plan
- Management Background
- Projected company revenue and profit.
Business Plan Body: Addresses the following areas of the business;
- Background and Purpose
- Market Analysis
- Product and Service Development
- Marketing
- Financial Data
- Organization Structure and Management.
- Ownership
- Risk Factors
- Conclusion
From the exploration of the above business plan contents, it is evident that writing of business plan requires an entrepreneur to spent significant time gathering essential information. This because each part of the business plan is important as the other. Besides, the business plan should be well prepared to attract funding from investors. Without observance of these critical aspects entrepreneur’s business plan will remain a wasted document. To avoid entrepreneur’s efforts going unrewarded, preparation of business plan should review every element to make sure all important business plans are included and well presented.
- Pre-existing Business Strategic and Operational Plans
This restaurant business strives to promote its products through emails, flyers and other promotional strategies applied by other restaurant businesses in the area. The promotional message about company products will contain the comprehensive menu, products description, and costs. Business operational plans will involve building on the existing products and listening to what customer says to come up with the new products.
- Business Vision, Mission, Objectives, and Values
Vision: The vision statement of the company entails maintaining happy customers.
Mission: Business mission will be to provide natural and hot fast food to customers.
Objectives: The immediate company objectives involves making over $500,000 sales in the first year, fully pay the financing debt by the end of the second year in the business and maintain sufficient cash flow within the first year.
Values: Treating customers and employees with dignity and providing quality service.
- Consultation with Key Stakeholders
Marketing Strategies for Restaurant Businesses
Key stakeholders in this context will be investors and suppliers. The business will consult the financiers when anticipating to make an investment decision (Smallwood, Sweetman, & Ulrich, 2007). On the other side, the company will involve suppliers in the new product development plans.
- Market Requirement Needs
People prefer naturally and hot prepared food because of health ailments associated with the fast moving foods.
- Performance Objectives
- The immediate company objectives involve making over $500,000 sales in the first year.
- Fully pay the financing debt by the end of the second year in the business.
- Maintain sufficient cash flow within the first year.
- Financial, Human and Physical Resources
The start-up of the business will require a capital investment worth $50,000. Also, the business will need to recruit fifteen employees to help in the operations of the business. The physical resources will include a building and all other items necessary for the running of the restaurant business.
- Permits and Licenses
The company will acquire, business license, employee health permit, city and fire permit and music permit (Business.gov.au, 2017).
- Writing Business Plan
The writing of business plan will comprise market analysis, product and service development, marketing, financial data, organization structure and management, ownership and risk factors.
- Communicating Business Plan
Poor business plan communication can lead to overspending and continuous reworks practices that can cause inefficiencies and delay on business plan implementation (Sinclair, 2011). Therefore, it will be important for the entrepreneur to communicate all the necessary information to the key stakeholders of the company. Some of the contents that an entrepreneur should provide to the investors include revenue and profit projection, the business target plan, business location, company management and marketing plan. Bearing in mind this a restaurant business, it will be appropriate to seek permission from relevant government authorities.
- Acquiring Skilled Labor to implement Business Plan
Based on the restaurant size and revenue forecast, fifteen full-time employees will be appropriate for running of business operations. The employees will work for 870 hours per week. The employees selected and recruited by the company must possess following restaurant skills.
Customer Service: Restaurant workers will ensure that customer needs are met satisfactorily. The critical goals of the employees will involve making customers happy through the provision of outstanding services.
Safety Consciousness: This is meant to ensure the safety of the customers as well those of the employees.
Effective communication skills: This will involve communicating with the customer as well as fellow employees to ensure quality service delivery.
- Test Performance Management Systems
The restaurant will support employees’ success, productivity, and efficiency by subjecting them to the performance management system. Bearing in mind that it is start-up business, quarterly performance appraisal will work best within the first year in the business. Frequent performance appraisals within the year will assist restaurant to examine whether employees are working towards achievement of business goals and objectives (Qureshi, Shahjehan, Zia-ur-Rehman, & Afsar, 2010). If the performance of the employees proves to be good, the company management will change performance appraisal to annual performance appraisal. This will assist to avoid mid-year interruptions that come as result of frequent performance appraisals.
- Business Plan Implementation Timely Reports
Financial Planning for Restaurant Businesses
All major stakeholders must be provided with timely reports about the progress of business operations (Sinclair, 2011). Restaurant shareholders will be informed about the business financial performance on quarterly basis. Additionally, the restaurant management will gather performance appraisal data and use it to analyze customer satisfaction. This data will be used to improve customer satisfaction in future.
All key stakeholders will be informed about the level of customer satisfaction one month after employee performance appraisal has been conducted. Alternatively, company investors will be provided with marketing operations and marketing strategies that company is anticipating to undertake to improve business sales as well as market share. Finally, the expansion of business to other regions will be communicated to the owners of the business at the planning stage.
- Report System Failures, Product Failures and Variances
The business operates in a dynamic environment, and there is a probability that they may fail to achieve target objectives (Henri, 2012). For example, major business shareholders may fail to know key company decisions such as investment because of report system. In case this happens, the company will seek an alternative that will be used to provide critical information to the business stakeholders.
To avoid the problem of product failure, the company will have an alternative product that can keep the business running as management resolves the problems with the existing product. Monitoring of business operations will be observed throughout and take corrective measures in case of variances occur.
Performance Report Analysis against Business Objectives
Information obtained from performance appraisal systems will be compared to the business objectives to determine whether the business is running on the right course. If the variations are identified, control and corrective measures will be applied to match company operational techniques to the target business goals (Dermol, 2012). On the other side, if the performance report indicates the performance of the business in line with business objectives, the company will focus on maximizing on the existing business strategies.
Performance Indicators Review
Business performance indicators will be based on the following aspects;
Financial Metrics: This will involve evaluating the company profits and costs. The success of the business will be determined by comparing gross margin and gross profits. On the other hand, evaluation of costs will be focused on establishing ways of reducing operational costs.
Customer Metrics: This performance indicator will measure the customer satisfaction and retention (Hussey, 2008). It will assess how customers have been satisfied and the number of customers that business has retained against to the number of customers lost.
Employee Management in Restaurant Businesses
People Metrics: This indicator will determine the satisfaction of the company employees. It will compare the level of employee retention with employee turnover rate. The more employees are happy and the lower the level of an employee of turnover.
Coaching and Training Underperforming Employees
The key objective of every business to select and retain highly talented employees. However, this not means that underperforming employees should be fired. In this business, less performing employees will be subjected to coaching and training to help execute their tasks as per the expectations of the company.
Coaching and training will be carried out using on job coaching method. In the process of training, the trainer will discuss with the employees so that he or she may understand what he or she is not performing appropriately. This will be accompanied by asking an employee for suggestions that he or she thinks would work best for him.
Reviewing System Processes
The assessment of the system processes will be based on customer satisfaction, product performance, and business operation efficiency. On the aspect of customer satisfaction, the review will measure how system processes have contributed to the happiness of the customers. Again, the review will assess how the system has contributed to the maximum performance of the business products. Finally, the reviewing of the system will assess the impact of the existing processes on business operations.
Conclusion
The success business plan will depend on how an entrepreneur has organized its contents as well his business ideas. Based on the mission, vision, objectives, and values of this business plan, the major value of the company is to meet the needs of the customers. This will facilitate customer satisfaction and retention. Business will be achieved through the adoption of the following strategies. First, application repetitive business approach. This will make sure every customer who consumes company products becomes a return customer as well recommend business services to other potential customers through word of mouth. Secondly, the company will employ highly qualified personnel and subject them to training to ensure they deliver best services to customers. Thirdly, the restaurant will be located on the busy streets of the city to target large market share. Finally, the business will be offering variety menu to meet the needs of as many customers as possible.
References
Entrepreneur Media, Inc. (2016, February 22). Elements of a Business Plan. Retrieved from Entrepreneur Media, Inc: https://www.entrepreneur.com/article/38308
Robbins, S. (2015, June 26). Why You Must Have a Business Plan. Retrieved from entrepreneur.com: https://www.entrepreneur.com/article/74194
Thomson Reuters. (2017, February 26). Contents of a Written Business Plan. Retrieved from Thomson Reuters.: https://smallbusiness.findlaw.com/starting-a-business/contents-of-a-written-business-plan.html
Business.gov.au. (2017, July 28). Registrations and licenses. Retrieved from Business.gov.au: https://www.business.gov.au/info/plan-and-start/start-your-business/business-and-company-registration/registration-and-licences
Smallwood, N., Sweetman, K., & Ulrich, D. (2007, November 11). A Leader’s Five Key Stakeholders. Retrieved from Harvard Business Review: https://hbr.org/2007/11/a-leaders-five-key-stakeholder
Henri, J.-F. (2012). Performance Measurement and Organizational Effectiveness: Bridging the Gap. Québec City: Université Laval.
Qureshi, J. A., Shahjehan, A., Zia-ur-Rehman, & Afsar, B. (2010). Performance management systems: A comparative analysis. Journal of Business Management, 4(9), 1856-1862.
Sinclair, M.-L. (2011). Developing a Model for Effective Stakeholder Engagement Management. Journal of Business Ethics, 5(1), 1-18.
Dermol, V. (2012). The relationship between Mission Statement and Company Performance. Management Knowledge and Learning, 8(3), 891-897.
Hussey, D. (2008). Strategic Management from Theory to Practice. Butterworth-Heinemann: Oxford.
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