Begin with the end in mind.
It’s a good adage to live by, especially in business.
Starting a business can be a gamble. Restaurant owners, for example, must consider that 30% of the restaurants do not survive their first year. That’s one in three restaurants that close before their first anniversary! This astounding failure rate indicates that there might be a shortfall in planning ahead and strategizing for business owners.
Here are the advantages to restaurant owners and business leaders of planning ahead.
Advantages of a strong business plan
Having a strong business plan and executing on your strategy will increase your business’s potential to thrive, surpass all milestones and weather future challenges. The advantages of having a strong business plan can be endless. The disadvantage of not having a strong business plan can lead to your business’s downfall. Here are some of the advantages.
From the first time you thought about opening a restaurant, you already had an idea of what it would look like: the kind of food you’ll serve, what ambiance you’d like the place to have, the interior design, and so on. For example, would your restaurant be a quiet hang-out for locals, or is it going to be a popular destination, and party place? A restaurant business plan can put your vision into action. Putting it down in a standard business plan is a great way to ensure that how you have been envisioning your business will become a reality down the road.
Clear financial strategy
Planning ahead can also save you from financial speed bumps along the way. For example, when you have a clear vision of what your restaurant will be like, you can come up with realistic estimates for the number of employees you’ll need, how much space is required, the restaurant’s location, and so on. This will, in turn, make your financial planning and cash flow management easier and more accurate.
Better assessment of progress
When you have a roadmap to follow, it becomes easier to evaluate your progress as you go along and improve restaurant efficiency. Planning ahead means setting timelines, milestones, and benchmarks. For example, at what point do you plan on breaking even? In what year are you planning to open a new location? These important milestones are part of a business plan and an excellent way to measure your success.
A more precise grasp of risks and competition
Planning gives you an idea of what to expect in the future regarding market trends and competition: you should be thinking about “what if” scenarios and envisioning how you’ll act and react. What if a McDonalds opens up next door? What if the cost of lettuce skyrockets? While a business plan is made to be well-structured and followed, it should also be flexible enough to accommodate unexpected events and other external factors that can potentially turn your business upside down.
Easy to approach investors
Aside from being a roadmap, your plan is also the documentation you’ll need when seeking funding from investors. A good plan indicates that you are a worthy investment. It shows that you are serious and sincere about your plan and vision. A well-crafted plan is a great way to communicate your intentions, strategies, and vision to potential investors.
Down the line, your staff will benefit from a well-planned restaurant or business. For one, a good plan can help an owner hire the right number of staff, which lessens the possibility of overworked employees, burnout, and high turnover. Happier staff are healthier and more productive, too, and ultimately reduce your recruitment and training costs while also contributing to your customer’s satisfaction and perception of your value. Don’t forget to include employee benefits and perks in your business plan as well; it’s important for your plan to include total compensation.
Critical elements of a business plan
Now, what makes a good business plan? Business plans typically follow a standard format, making it easier for investors to find what they are looking for. Here are the components you need to include in a restaurant business plan; most of these are applicable to any business and industry.
This is the executive summary or overview of the whole business plan. It is where you’d want to capture the attention of potential investors by giving an overview of the style of your restaurant, the cuisine you are serving, and the customers you’re targeting. The summary also includes the amount of money you need from investors.
Planning ahead means clearly grasping your strengths, weaknesses, opportunities, and threats (SWOT) in comparison to your competition. A SWOT is also frequently used to analyze the entire market opportunity. Analyzing these four crucial elements can significantly help you and your potential lenders and investors quickly spot risks and advantages and are a great way to show you have done your research and thinking!
The concept of your plan must be straightforward. For example, in the restaurant industry, you should be able to convey in a few words whether your restaurant is fast food, fine dining, family dining, or a haven for urban hipsters. Listen to experts in the restaurant industry to get an idea of how to convey your restaurant concept better.
The design of your brand is an integral part of the business plan. In the restaurant industry, for example, it is where you show how your menu, logo, color scheme, and takeout materials work well together in showcasing your brand.
Go into detail about what food you’re serving and how you’re serving them. For example, a sample menu with projected prices, costs, and supply chain information would give investors an idea of what your restaurant would be like. In other businesses, you should clearly identify the Products and Services that you’ll be offering to customers: their descriptions, pricing, and costs to help investors understand what you’re selling.
Budget and Financials
How much do you need to pay for overhead expenses — rent, payroll, insurance, marketing? How much cash do you need today versus next month? What if you have far fewer customers than expected one month? Your restaurant plan should also include how you plan on dealing with theft, spoilage, and excess waste. Regardless of type or industry, every business plan should include a realistic forecast of both income and expenses, and account for the real timing and flows of cash coming in and going out.
Advantages to other types of businesses
Food trucks have become a fast-growing industry in the last half-decade. IBIS World reported that there would be about 26,000 operating food trucks in the US in 2021. Taking the time to plan your food truck business can set you apart from the competition. This means finding your niche, preparing your menu, and determining your target market and the key locations. A food truck business has many moving parts — truck licensing, health and fire code requirements, off-hours parking location, overhead expenses, food preparation location, and marketing costs, among others. Putting in the effort to plan accordingly, behind the scenes, before serving your first meal can give your food truck business a better fighting chance in this competitive industry.
Cleaning & Home Improvement
The COVID-19 crisis accelerated the growth of the cleaning industry around the world. The competition is stiff, so planning your cleaning and home improvement business is crucial. When designed well, your business can rise above the other providers in your area because you’ve determined your strategy, what extra services to provide, what specialty to focus on, and how to expand your network. Planning ahead also entails keeping an eye on testimonials from competitors’ clients: be aware of what the market and your customers notice and what is most important to them.
Pets & Animal Care
As with any industry, the best way to ensure your business is profitable is by building your plan around reliable industry and market data, correctly identifying your customers and their needs, and implementing the right strategy. When planned well, your business can target the optimal market, offer them services they need, and occupy a location surrounded by many pet owners to ensure great volume and sales. In the planning stage, you secure essential licenses and permits such as zoning permits and state veterinarian’s office permits. The most common reason pet and animal care businesses fail is the inability to earn enough profit to cover overhead expenses. A good business plan with a realistic budget can mitigate this risk and increase your chances of success.
Eco-friendly eCommerce Store
Sustainability concerns most consumers these days. A well-crafted business plan can significantly benefit an eCommerce business that sells eco-friendly products. It requires careful curation of products to offer, the type of packaging to use, and ensuring that everything that happens behind the scenes — storage, manufacturing, freight, etc. — is done sustainably. When planned well, an eco-friendly eCommerce store can reach a global audience, generate sales around the clock due to its online presence, and spread meaningful awareness about sustainability.
Starting your own graphic design business is straightforward, but you need careful planning to scale your business further. A roadmap to this business includes:
- Understanding your skills and specialty
- Developing your skills in different areas
- Identifying potential clients
- Running competitive analyses
- Setting the correct pricing structure
- Knowing the legal aspects
- Setting up a workspace
- Growing your team
When working to scale your business it’s important that you continuously hone your craft, offer new services, meet the market’s needs, and avoid legal mishaps. A well-crafted business plan is a tool you can rely on throughout your business’ stages of growth.
Dropshipping businesses have many advantages, such as low startup costs, less risk, relatively straightforward to launch, scalable, and can be done remotely. Planning a dropshipping business includes:
- Finding your niche
- Getting a suitable supplier
- Building a good website
- Marketing your business
Building a dropshipping business may seem like an easy feat, considering that you are not providing the products yourself. However, it involves an extensive amount of work, planning, organization and flawless execution to be successful. A carefully planned dropshipping business has the potential to rise above the competition by solving problems better than anyone else, having a unique value proposition or meeting an unmet need.
A well-constructed business plan benefits the business, its customers and clients, its team, and any investors, shareholders, and stakeholders. Having a strong business plan and executing on your strategy will increase your business’s potential to thrive, surpass all milestones, and weather the challenges it might face. Planning ahead is key to a more stable, successful, and sustainable business in today’s global and competitive business world.
Need help building your business plan? Need a strategy for your business plan? Cansulta has consultants for that. At Cansulta, we believe no business leader should have to face any challenge alone. Our online platform lets you find and collaborate with vetted consultants in minutes, and at a fraction of the cost of traditional firms.
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