A business plan is a must before opening your own business!
As i have seen many friends, ex-colleagues or people that i know struggling to successfully launch their new businesses and gaining market share in their areas , so i decided to highlight the importance of conducting a proper business plan before consider opening any type of business - can be a restaurant or other type of business.
Before i list the important points that can be part of a business plan i would like to list three major factors in the recipe of any business success (Concept , Location & Marketing) .
Once you have your concept in mind and before having it implemented you should consider the below points as your checklist :
1- The Business proposal :
A- Answer few questions
what are you going to sell ? why you chose the business project ? why is it a good idea?
B- Mission , Vision & Business values :
These have to be determined at early stage as they will become the DNA of work , no business can run without values !
2-Marketing & Sales
A- Business idea :
A- set the objectives of your business (KPIs) (Revenues, Average spend , number of clients, location size ..) this should be projected for first 3 years of business.
Set the deliverable timeline , you should have timing with date for each activity of the business plan checklist to be well planned in advance (retro planning )
Define the legal organization of your business (sole owners ? partnership ? shareholders ?...)
Name your business , Ensure business name is not already registered and ensure registering it at early stages .
Check what are the permits and Licenses that are required in the region where you plan to open your business , in some countries these might take more than 6 months to be completed !
B- Market research :
Define area of activity :
Do some research on the area of activity of your business ( if dine in or take away or delivery , all have to be identified early in advance in order to determine challenges that might face your business activity .)
Define business & consumer trends :
What is the overall trend performance of the same business activity that you plan ? these details should be received from government and department of commerce reports.
Conduct Pest Analysis
( Political factors that can impact your business (Policies, inflation , taxation ...) , Economic factors ( Unemployment rates, consumer spending , food interest rates ...) , Social factors ( consumer trends such as vegan trends, healthy trends , food habits...) , & Technology factors and its impact on the business .
Define your targeted customers :
Define demographic segmentation (Age, gender, employment status, income levels )
Geographic segmentation (who are you targeting ? Urban , sub-urban or rural ...)
Psychographic segmentation ( lifestyle, personality traits, interests of your targeted clientele )
Behavioral segmentation (price sensitivity , quality conscious , user rates, loyalty status ,buying decision process...)
Define the areas where you plan to open your business - Location
Define the potential of the Market :
Define total number of potential customers in the chosen territory and Multiply this by the average yearly customer spending per household in the business sector to define the total potential of your market , also define industrial growth rate - these can be generated from department of commerce /economy .
Make a comparison table between your business and your direct competitors ( competitors names, business size , business years of operation , employees , location advantages , main business services, quality of customer service, pricing , online customers reviews , SWOT analysis ...)
Competitive advantages :
How is your business going to be better than other similar businesses ?
Estimate sales and market share :
Estimate the number of customers and multiply by the average spend to get yearly estimated sales than define next two years growth rate %
Define your market share % from total potential market.
C- Marketing plan :
product & service strategy:
List the main products that will be offered by your business , what are main features ? how will you follow up on customer satisfaction after sale ?
Pricing strategy :
Set your pricing strategy after conducting a check on competition pricing
Distribution & location strategy :
Where will you distribute your products ? and via which channels ?
Advertising & Promotion :
Set the advertising & marketing goals , targeted customers for each of these goals , advertising methods & schedule
set the budget for advertising & promotions for each of the above goals
Any other strategies & business partnership ideas ? make sure to list them .
3-Planning resources :
The management team
who will be doing what on top ?
Set the job description for each post needed and number of employees needed in each post .
Any need for third party companies ? steward, housekeeping ...
Plan in advance each training needed for the year for management and for staff and set the budget for all these trainings .
B-Material & Physical resources
List the tasks that will be done on a daily basis by each of the management and staff members daily , how much time should be allocated for each of these tasks ?
Production service / sales capacity
Quantify the tasks and work hours that will be needed but do not generate direct sales (hiring , training , planning , scheduling ,,marketing , administration meetings, communication ... By doing this you will be able to know how many hours are left for operational hours that lead to direct sales .
Create your APL (Approved product list ) which suppliers are you going to buy your products from in order to ensure consistency of your food offerings ?
SOPs , which are standard operating procedures which will become like the work bible to follow and ensure consistency in customer service.
Set the quality control procedures .
List the name of each supplier for each food and non-food items
Set inventory procedures for each food and non food items , a system that will be followed by all respective staff in their areas .
What are all fixed assets investments required for the project (land , Lease hold improvements, vehicles, Total equipment needed, office equipment , FF&E list ., IT list & software's ,...
Business development plan
What is monthly rental & what are future renovation costs if any ?
decide on total space & layout plan required for the concept , 3D layouts would help a lot to visualize the future project .
Get a full liability comprehensive insurance for your project and add this cost to your budget .
Decide how you will use and add innovative ideas and software's to help boost your business ? make some research before you finalize this plan in order to check trends .
4-The Financial Plan
A-Cost of goods sold
In restaurant business this is to finalize food and drink cost recipes
List all your monthly expenses that will be later stated on your monthly income statement
c-Start-up and planned costs
What are all start up costs needed to have your project up and running ?
Financial forecast for 3 years , income statements for 3 years , Cash flow statements for 3 years, Breakeven point calculation , Balance sheet ,Financial ratios , all have to be re ready in order to show next to banks for financing possibilities .
E- Sources of financing
Are you going to get financing from banks ? or partners ? this is time to decide how you will finance your project including funds for first 3 operational months where cash flow will be very less once you open your doors for business.
once you get your financing approved, this is when your project will move on ,