Tight control of costs and good working capital management are essential to maintaining a profitable business and this means that the restaurant business plan must have a detailed cash flow analysis to show how much cash is in the business and how the cash is appropriated. A restaurant business plan should include detailed information on the key pressure points of cash flow:
Maintaining optimal stock levels is a critical element of the financial plan for a restaurant and this will flow into menu construction based on what sells at the highest margin. There is no point in having cash tied up in stock that is slow to move at a low margin. Supplier terms are also vitally important as this directly impacts your ability to source the best stock on the most favourable terms. The longer you can extend the terms the longer you have cash in your business. This improves the liquidity position therefore the buffer to running out of cash. While a restaurant business plan will include quarter projections for sales it is common for restaurateurs to keep weekly figures in terms of covers, average spend, most popular purchase, trends in patronage and margin per meal. This information is pivotal if you are to be responsive and maximise sales and cash flow. Planning Is Essential! A detailed restaurant business plan is the best weapon you have for turning your dreams into a reality. First and foremost it is your internal blueprint to achieving success, but it is also a fundamental requirement to obtaining funding. Starting a new business is exciting and having a plan will force you to consider the potential pitfalls and competitive opportunities before you begin trading. It is virtually impossible to find the time to conceive an effective plan when you are actually running a restaurant. It is an engrossing activity and trying to plan retrospectively to extinguish fires that could have otherwise been avoided is the prime reason the attrition rates are so high in this sector.
0 Comments
It is important not confuse the start up expenses (profit & loss) listed above with start up assets which will appear in the balance sheet of your financial plan. Expenses are tax deductible whereas asset are depreciated. Typically assets are financed by start up capital, either cash from the owner or a bank loan and these typically include:
Your restaurant business plan should include a start up worksheet to assess the true level of capital required to start the business. This will relate directly to any funding application. Banks will only fund assets that have a residual value as it provides a level of security in the event of business failure. Typical Profit Margins Profit margins in the restaurant game are notoriously low compared to other sectors, like for instance assignment help business. This is a direct result of the high level of variable and fixed costs involved in running a restaurant business. Good cost control is essential to turning a profit and the restaurant business plan should focus heavily on cash flow management. Effective cost controls are the best way to maintain a healthy profit margin and the good news is that it is completely within the control of the business owner. Labour (or staff) is a major cost for restaurants and essential to delivering the best experience. Labour costs should be streamlined to meet the needs of the business with as little excess cost as possible. Getting this right takes planning and effective recruiting. Importance of working Capital Management The cost structure of a restaurant is heavily weighted towards variable costs. These are costs that move in proportion to the amount of trade conducted in the business. They are within the control of management and more often than not are the single largest factor in restaurants failing. So what is the difference between a restaurant business plan and any other business plan? While the follow the same general format there are subtle differences in terms of strategic focus.
Marketing Plan For Restaurants The customer is paramount for a restaurant as the business is generally selling an experience to the customer. For this reason it is absolutely imperative that that thorough market and customer research is conducted. Restaurants need to give customers what the “want”, not what the owner thinks they “need”. This statement should reverberate throughout the entire marketing strategy and should dictate the:
For many, eating out is a luxury and there are thousands of options to choose from. Competition in the restaurant game is high. Failure to meet the needs of the customer can lead to failure very quickly and the need for good data based analysis is critical to ensure your venture has a business model that meets the needs of your target customer. A restaurant business plan should evolve with your business and be nimble enough to meet changing needs of your customer base. This is a cornerstone requirement if your restaurant is to maintain a profitable customer base and compete effectively with the competition. Financial Plan For A Restaurant Start up costs are a huge factor and most restaurants spend the most money before they begin trading. A restaurant business plan should include a comprehensive overview of start up costs split into expenses, assets and start up financing to provide a realistic assessment of how much it will cost to get the business started. A detailed capital budget is essential and should separate start up costs into expenses and assets. Expenses will be items such as:
|
ArchivesCategories |