restaurant business plan

restaurant business plan

Restaurant Business Plan

1. Introduction

A new restaurant with a novel concept needs a comprehensive business plan to outline its strategy for success. This business plan lays out a simple strategy for developing a long-term restaurant pricing that can prevent the costly mistakes that often cause failure in this enterprise. The proposed restaurant will cost $424,866 to open. An additional 5% “cushion” will be set aside to cover cost overruns. The break even analysis indicates that $21,784 will need to be earned in monthly revenue to meet the fixed and variable costs. This break-even revenue will be obtained through selling 2920 meals per month at an average $7.45 per meal. This would enable the restaurant to generate a net profit of $14,330 per year. The need for an establishment that provides a comfortable atmosphere and quality food is something that I have often noticed talked about among University of Illinois students. However, busy college students often do not have time to stop at a restaurant for a high quality meal. Most often a good meal is put off until late when many places are closing. A large number of students turn to cheap fast food because they want something quick and convenient. This can result in food of low quality being ingested. The proposed restaurant will offer a wide variety of quality fast food that is readily available. With a relaxing atmosphere and a fairly low price, the restaurant will be the perfect place for an evening meal after a busy day of classes. The restaurant will reach and maintain a high 4.5 in food quality and value through its cheap pricing on high quality food. This will be achieved through tough cost control that will be accomplished by an affordable yet comfortable dining atmosphere. The restaurant will feature a full menu with many meal choices to cater to the target market, which is the vast number of University of Illinois students with a rather low income. To quickly grab a meal, students will have the choice of ordering something at the counter and taking it to a table once it is prepared. Table service is also available for those with more time on their hands. With its late evening hours, the restaurant will be serving as a convenient replacement for fast food meals usually eaten at home. This concept is very attractive to the busy students and their desire for a quality meal in a relaxing atmosphere. The need for a fast and convenient meal is also something that can attract the local Urbana business people. Students can often become frustrated with the loud party atmosphere of campus area bars and other eating establishments. This leaves them looking for a different alternative. Many professors and local Urbana residents are also frequent visitors of nearby fast food restaurants. This restaurant will provide an alternative for both groups. With quality food and a quiet relaxing atmosphere, this restaurant can become a favorite spot for many Urbana residents. Closed on Sundays and serving no alcohol, the restaurant will cater heavily to local church groups. Step by step details will be outlined in the following stages. 1.2 Concept Definition The purpose of the restaurant is to provide a comfortable atmosphere in which to enjoy quality food at an affordable price. This will be done through fast, friendly service and a menu at a low price point. This restaurant caters to students and business people, mainly from the surrounding five mile radius. This will be achieved through a high student work force, a free-standing store built at an easily accessible location, close to campus or right off a MTD bus route, and low pricing on high quality food. This will help to capture the large local student market, as many often search for a job with a good hourly wage and have a desire for a low cost yet enjoyable meal. With a strong advertising effort, the location will also attract local business people looking for a quick meal.

2. Market Analysis

In this section, give a picture of the market in ground. This is the basic thing a market analysis should contain. This section will also help in identifying the weakness that the restaurant has in the current market. Here you have to mention in what kind of environments, this restaurant can survive. You should also mentioned the demographical factors of the area in which the restaurant will rely. After considering these all factors, a market analysis will also contain what’s the proportion of targeted market that the restaurant will capture. This is the critical analysis which will attract investors. To build a successful restaurant, it is imperative to understand the make-up of the industry in terms of restaurant type and style. Singapore is a cosmopolitan country and people here love to eat out and also receive people in their houses. Restaurants are such place where people can go and entertain themselves. There are many restaurants and food joints in Singapore. The food and beverage industry is a volume-driven business. In a dense trade area, there are a huge number of restaurants and food joints competing for the same clientele. Any type of restaurant located in Singapore is capable of success if there is a clear understanding of the market place and which the restaurant will serve. To sustain in this type of environment, this restaurant will surely face tough competition but as we have mentioned that this will be everyone’s choice restaurant, we can foresee our market capturing of at least 30%.

3. Business Strategy

The business strategy is designed to take advantage of proven strengths and competitive advantages within the proposed market. The sales strategy is based on a slow and steady approach that builds long-term image. The ads and promotion budget is intentionally limited and will be geared to generate a high level of awareness to well-defined target market. Ads will be designed to build the level of trust, return, and credibility within the target market. Sales promotions will be geared at creating awareness and motivation in regards to the “Ride-Along” program and creating long-term business relationships. Public relations will be a key component in the quest to create an image of trust, credibility, and environmental friendliness. In its quest to create awareness and a positive image, PR will be a vital tool in the success of the Long-Term Marketing strategy. High credibility and the quality of service provided by RIDEcycle will be the key component in creating word of mouth and viral marketing because customers will be more inclined to tell others about their positive experience. Long-term marketing will be centered at self-promotion in creating an image of trust and credibility in addition to cost-efficient viral and value-added marketing.

4. Operations Plan

The restaurant will be open 7 days a week. Hours of operation will be from 7:30 am till 10:00 pm, with breakfast being served from open till 11:00 am, lunch from 11:00 am to 4:30 pm, and dinner being served from 4:30 pm to close. We chose these hours because most hotels and motels in the area do not offer complimentary breakfast and are close to full kitchen facilities. We will also attract passing customers from the busy Route 33. We will have 4 managers working separate 10-hour shifts Monday through Thursday, a maitre de and 4 cooks also working 10-hour shifts, and a dishwasher working an 8-hour shift. This totals 76 hours a day. We will have 4 or 5 wait staff working 6-hour lunch shifts and 6 others working 6-hour dinner shifts. The managers’ and cooks’ shifts will overlap on Monday through Thursday, offering plenty of supervision. In the event that there are no customers in the restaurant at the time, one of the managers may leave early. Friday through Sunday, the weekend managers will be working overlapping shifts from 7:30 am until 10:30 pm. This way, we always have a manager around and still have only 2 managers working at a time. During the daytime on the weekend, we will have 2 waiters and 1 cook working a 10-hour day serving both shifts. On Sunday only, there will be a dishwasher working a 10-hour shift. The facility will be closed Friday, Saturday, and Sunday nights, and at these hours all staff except the managers will not be on duty, essentially giving them the night off. Throughout the week, there should always be at least 6 staff working during a shift, and on weekends, there will always be 7.

5. Financial Projections

The following financial projections are based on conservative assumptions. We expect to achieve sales levels that will allow us to reach a comfortable level of profitability. Please note the following: The profit and loss shows a modest and acceptable profit in the first year. This is because we anticipate a lower than industry standard level of sales in May, June and July, which can be attributed to location and the fact that the restaurant will be in start-up phase. After July, the sales levels are expected to rise and stabilize, achieving healthy increases in subsequent years. It is also important to consider the level of owner’s capital used to support operations. The financial plan assumes that there will be a small business loan obtained from a bank. This will be determined later, depending on whether or not the owners wish to grow the business more rapidly or stick with a slow and steady growth plan.