Opening a restaurant can be challenging — you’ll need to consider countless factors when building your business plan. Before you approach a lender for your startup funds, here are six things that should be included in your business model.
Target Demographic
Your target demographic is the population of customers you specifically plan to cater to with your concept. This isn’t a broad term; a target demographic is clearly defined and detailed. For example, your target might be women between the ages of 25 and 50 who are single mothers, have a college degree, and live in a certain county.
Location
Where you build your establishment makes all the difference in your success. If you’re in an area that’s isolated, difficult to access, surrounded by competition, or otherwise undesirable, you’ll probably have a hard time bringing in customers.
Menu
This is probably the first thing you considered when you thought about opening an eatery, but it should go beyond what dishes you want to serve. Your menu should follow a cohesive theme, include items that can cross-utilize the same ingredients, and cater to your target demographic’s tastes. It’s also a good idea to think about alternatives for customers with allergies or special diets (like vegan or gluten-free).
Sales Forecast
You’re ultimately opening a restaurant to make a living, so being able to accurately project how your sales will be throughout the year is crucial. Sales forecasts are based on a lot of factors and can be tricky to navigate, but the more you study and analyze, the better you’ll be.
Cost of Ingredients
Ingredients get expensive quickly! If you’re smart about designing a menu with dishes that use some of the same ingredients, you can reduce your overall costs when it’s time to restock. Remember: there are certain dishes you shouldn’t compromise on. A high-quality ribeye steak or Alaskan salmon might be expensive, but customers are usually willing to pay more for higher-quality meals.
Equipment Expenses
The cost of stocking a kitchen with ovens, gas ranges, hoods, mixers, sinks, dishwashers, and other equipment can easily drain your budget, so make sure you’ve got the funds in hand to pay for everything. Equipment financing is another option, although you won’t own your equipment outright until you’ve paid it off.
Building a business plan for your establishment can be challenging, but the right knowledge and a healthy attitude can help your business ultimately succeed!