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Avoid future risks with a restaurant business plan

31. July 2018 18:53
Two people working on a business plan

If you're new to the world of entrepreneurship, the idea of creating a business plan for a restaurant can be daunting. It requires a lot of research and effort, but ultimately a well-thought-out business plan can not only get you approved for financing, it can also serve as a road map to your success. The more thorough and detailed the plan, the better your chances of turning your dream of owning a successful food service business into a reality.

While a restaurant business plan is an important step in getting your business off the ground, it's equally important to make sure you protect your business with the right restaurant insurance policies. Otherwise, all your hard work could literally go up in smoke if a fire breaks out and you don't have the necessary insurance coverage.

In this guide, we'll go over seven key sections to include in a small restaurant’s business plan. We'll also cover which insurance policies you might need before you're ready to open your doors and serve the first customer.

Section I: Executive summary

The executive summary should provide an overview and serve as an introduction, concisely summarizing your restaurant business plan's main components for the reader. Although it goes first, you may want to write it last so you don't miss any important points you cover in the plan.

Make sure your executive summary includes your:

Remember, this is your first opportunity to make an impression on the reader – someone who may have the final say on whether or not the plan deserves financing. Hit the key talking points to entice your audience to keep reading, but don't go into too much detail. That comes later.

Section II: Company description

Next, it's time to break down the logistics of the business operations. That includes components such as:

Overall, this section should give the reader a clear idea of what the restaurant will look like, how it will operate, and what the experience will be like for customers.

Section III: Management and organization overview

No matter how innovative your concept is, the success of your restaurant will hinge on the skilled team that can make it run. Show prospective investors and lenders your team's business savvy, experience, and ability to manage operations. Be sure to include:

Investors and lenders will feel more confident giving you money if they can see that you and your management team have a proven track record of success.

Section IV: Industry analysis

In this section, you want to demonstrate that you have done your research and found that there is a demand in the market for your restaurant concept. Your industry analysis should include:

The industry analysis should leave the reader confident that you have done the research and found that demand exists in the market for a restaurant like yours.

Section V: Marketing plan

Your chefs may be capable of serving up world-class cuisine, but that won't keep you in business long if potential customers don't know you exist. Investors and lenders will want to know how you plan to draw customers to your establishment and keep them coming back for more.

This section should describe how you plan to market your food service business, which could include:

Provide as many specifics as you can to show that you have given your marketing strategy quite a bit of thought. If marketing isn't your strong suit, consider hiring an advertising firm or marketing consultant to help.

Section VI: Operations overview

Now it's time to dive in and explain how your establishment will run on a day-to-day basis. Be sure to describe your operational processes, dedicating a brief section to each of the following points:

It will be time-consuming, but going through all these details now should help reduce the amount of work you need to do in the final weeks leading up to your restaurant opening for business.

Section VII: Financial projections

This section gives you the chance to show that you are capable of planning for your business's future. Make sure you provide realistic projections and accurate information, since misinformation may hurt your chances of securing loans or funding.

Some potential items to include are:

It can be hard to project expense and income when you are starting from ground zero, but do your best. You may want to hire an accountant to help with this phase of your plan.

Final tips for creating your restaurant business plan

Now that you have a basic outline of what your food service business plan should include, let's review some general advice to help guide your writing:

Above all else, make sure your plan is well-written. Again, you want to grab your reader's attention and incite action. When you use descriptive and clear language, you have a better chance of engaging your audience and selling them on your ideas.

Protect your new restaurant with small business insurance

Getting approved for financing will get you one step closer to opening your food service business. However, if you don't invest in restaurant insurance, a fire or customer injury could wipe out everything you've worked so hard to build.

Here are a few of the policies you are likely to need as a restaurant owner:

There are several other policies that might benefit your new restaurant. If you aren't sure which ones are right for you, your insurance agent should be able to help you secure the protection your new restaurant needs.

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Restaurants | Risk Management

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