Common Mistakes to Avoid while Writing the Restaurant Business Plan

Posted by Gia Glad on April 23rd, 2019

Are you planning to open a restaurant? It is not as easy as you think. A lot of planning, dedication, knowledge, and passion is required to start your dream restaurant. To open a restaurant, a good business plan is the first step. A strong business plan gives your new restaurant a way out to achieve success.

The restaurant industry in the USA is very competitive. 26% of restaurant fails within one year, and 60% fails with 3 years. So to make your restaurant business successful, you need a clear vision and a healthy business plan.

While you are working on a business plan, mistakes can happen easily. But you don’t worry we have stumbled upon the secrets of success. Following are the common mistakes you should avoid while writing a restaurant business plan. 

Ignoring long-term goals

As we’ve mentioned-above that so many restaurants fail in the first few years, it is recommendable to plan your restaurant in a way that only covers the initial phase of your business, but also focuses on long-term growth.

However, long term goals can be for 3 years, 5 years or 10 years. The goals should be specific, achievable, realistic and timely to achieve them successfully.

Being realistic about the costs

Don’t underestimate your costs while writing a business plan for your restaurant as it can create havoc further. So it is advisable to be specific about your expenses in your restaurant business plan or you may face unexpected challenges. You should keep at least 10%-15% of the total investment for these expenses. 

Not preparing a expected cash flow

If you don’t write for expected cash flow, then seeing the numbers that doesn’t make sense after a while will buzz you off. Therefore, it is important to do financial forecasts, estimate your profit margins, your direct cost, your labor cost, and a lot more.

With a clear expected cash flow you’ll ahead of your competitors and attract better investors. However, if you find this difficult, then hiring restaurant accounting services is not a bad decision.

Putting minimal efforts

A restaurant business plan is a key to fulfilling your dreams. So you should put all your efforts into it.  If your plan is poorly constructed, investors will not do business with you because they know which kind of business can bring them profit and which will not.

Research your competition, find information and make a fully detailed business plan. 

Underestimating the value of marketing

Everyone browse over Google, before visiting any new restaurant in their area. So you need a strong plan to make your restaurant’s presence online.  

In the business plan, don’t just mention the budget for online marketing, but make a clear plan of how to attract people. Consider the following questions and their answers in your restaurant plan:

• Will you offer a customer loyalty program to offers discounts to your customers?
• Will you hire a PR Company or work with a local news outlet?
• Are you planning to have a restaurant website?
• Do you have a plan to setup google business page for customer’s reviews?
• Will you use paid media such as mobile ads, google ads and social media branding?
• Are you planning to offer online food delivery services?

Good layout of marketing strategies can help you to impress your investors and brand your restaurant business efficiently.