|Every business plan should come back to assessing six fundamentals:|
- Your restaurant – Go beyond the basics. What differentiates your restaurant now from the competition? Is there an aspect to your restaurant that is seasonal? Have you thought about food storage, health and safety regulations, etc.? Be specific – describe why your restaurant or service is unique, your value proposition, the way you target clients and how you stand out in this competitive field.
- Your industry – What is the current restaurant industry environment? Have there been systemic changes? Are there new opportunities, risks and threats? What are your plans to address any risks, such as rising food costs, increased regulation or rising energy costs?
- Your management team – Think of past accomplishments, as well as current capabilities, limitations and succession plans. If you go on an extended leave, who is in charge? Are you proactively managing the business – are you reviewing fixed and variable expenses, identifying ways to reduce costs, manage cash flow and receivables more aggressively? Is there an opportunity to reduce paper use, or look at reducing fixed costs through water use reduction or supplemental energy sources, rooftop solar panels for example?
- Your competition – What is the competitive landscape in the foodservices industry like now? What are restaurants of similar size doing today and what could they be doing in the future? Is there new competition emerging? This could include other restaurants or chains that might move into your niche that haven’t traditionally been there before.
- Your business strategy – Think about your overall business goals outside of profit and revenue. Describe your objectives, the background of those objectives and your plan to achieve them. By being specific, you give yourself a much better chance of achieving those goals. Also, consider your business strategy for the long term – what critical risk factors could stand in the way of those goals? For instance, are you relying on a limited number of markets or clients? Does your firm have the right expertise to successfully grow the business to more than one location? Is your long-term strategy backed by a solid financial plan?
- Your financial strategy – It’s important to look at your financial forecasts and check that they are aligned with the business strategy to represent a realistic picture. Also, consider how unexpected events could impact the viability of your plan. A lender will often apply this test to assess if a company is flexible enough to withstand changes in its business environment.
And last, but not least, your risks – every business comes with risks and your plan should address these. By doing this, you show that you are aware of these risks and ready to deal with them.
A solid business plan really is the backbone to good business strategy, because it makes you take a close look at what you have in mind and helps identify potential opportunities and obstacles that you may not have considered. And, if you’re looking for investors, they won’t consider you seriously unless you have a business plan in place.
For help on building your business plan, visit the RBC Planning Guide for tips and guidance as well as templates of other business plans and get yourself planning today.
About the author:
Jim Mulligan is National Director, Retail Client & Business Strategy at RBC.