Whether they’re starting a restaurant, food truck, or other foodservice business, most entrepreneurs know they need a business plan. But typically, they think they only need their plan at the very beginning, and that the plan’s only purpose is to raise funding. While a business plan is certainly critical for raising funding, it can provide much additional value and help you grow a more successful business. In this article, I’ll go through the key areas of your business plan that you can use to grow your foodservice business.
The first section of your business plan is your Executive Summary. This section simply summarizes the rest of your plan, so I won’t discuss it here. Likewise, your Company Analysis which comes next, doesn’t have much strategic value. This section simply gives a snapshot of your company (e.g., describes your business) and discusses your accomplishments to date (e.g., date you opened, date you reached $X in sales, etc). It’s the following sections of your plan that can really help you grow.
The Industry Analysis section discusses your market size and trends. The National Restaurant Association publishes annual research reports which provide good information in this regard. You should always be looking at industry trends and making sure you adapt to them. For example, if trends point to more takeout dining, then you should adjust your strategy for that. For instance, you could implement better and easier ordering systems, an improved and dedicated space for takeout customers to wait, etc. Doing so would better position your business for the trends and result in improved customer satisfaction, sales and profits.
The Customer Analysis section of your business plan details the customer segments you target and their needs. By better understanding your customers, you can 1) create better menus, products and/or services to meet their needs, and 2) better target them with your promotions. For instance, it may be advantageous to offer more vegan options, or high-protein options, etc., if doing so aligns with your customers’ needs.
Your Competition section discusses the strengths and weaknesses of your competitors. It also should identify your areas of competitive advantages. Sometimes you don’t have as many competitive advantages as you’d like, and the purpose of this section is to figure out which ones you need to gain. For example, hiring a chef with expertise you don’t currently have could give you advantage. Training your employees so they provide stellar customer service would be an advantage. Or employing technologies that enhance the customer experience. And so on.
The Marketing Plan section has great strategic value in defining the promotional tactics you will use to gain new customers. For instance, you can use radio advertising, television advertising, PPC advertising, social media marketing, email, text message, print advertising, etc. As mentioned previously, knowing your target customers helps you improve your promotional success. For instance, if you knew that most of your customers had children who went to the local high school, advertising in the high school newspaper could be highly effective. Importantly, you should always be seeking to add more promotional strategies to your marketing mix. That’s because the most effective strategies change over time and the more strategies you use, the more customers you can acquire. Think about the restaurateur who relied exclusively on yellow page ads a few years ago. They either had to adapt and catch up quickly, or they saw their business decline.
Your Operations Plan can have great strategic value in growing your business. Your operations plan should include a sub-section called “operational milestones.” Here, you will list the milestones you hope to achieve with your foodservice business and the dates. Essentially, it lists your goals. For example, you may say that this year you hope to reach $X in sales. And by the second quarter of next year, you plan to open your second location. Equally importantly to identifying and documenting your goals, this section forces you to think through what will be required to achieve these goals. For example, who must you hire and when? How much money might you have to raise and when?
The Management Team section of your plan lists the bios of your key employees. From a strategic perspective, think about additional employees you’ll need to hire to grow your business and achieve your milestones.
Finally, your Financial Plan should include your financial projections for growth based on your operational milestones. It should also detail how much funding you need, if applicable, and the uses for these funds.
As you can hopefully see, a business plan can be much more than just a document to show to a bank or investor when launching your business. It can be a strategic roadmap that you follow to build a successful foodservice business.
About the Author
Dave Lavinsky is the co-founder and president of Growthink where, over the past 20+ years, he has helped over 1 million entrepreneurs and business owners develop business plans to raise funding and grow. Dave has helped many entrepreneurial chefs and is the author of Growthink’s restaurant business plan template and food truck business plan template among others.