When you decide to open a fast-food restaurant a well-written and a robust business plan will be your number one source to navigate you through your journey. Writing a business plan will help you make strategic decisions, and will guide you to reach the revenue and profit goals and ensure your survival in the competition. In this detailed guide, we will navigate through the key components of a fast-food business plan, exploring each section’s significance and providing insights specific to succeeding in the fast-food sector.
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Executive Summary
The executive summary is the first part in a business plan. But it is written last, because it is a summary of your whole business plan. In the executive summary, provide a brief overview of your fast-food restaurant, outlining the concept, menu, location, organization, Management, operations and financial forecasts for the upcoming three to five years.
Company Description
In the company description section, provide in-depth information about your fast-food restaurant business. Write about your location, your store, your team and their experience and give information about what makes you different from others. This can be your service quality, service speed, product quality, menu selections, location, your “secret” sauces, etc.
Since the fast-food industry is highly-competitive, in company description section, emphasise the differentiating features and value propositions of your fast-food restaurant, list your competitive advantages against your competitors.
Products and Services
In this section, provide the details of your menu. Your products and services are the most important differentiators from your competitors so, try to point out what makes your products and services better, where are your advantages in providing the products and services to your customers.
Highlight your signature meals, your innovative products and emphasise your services and deliveries.
Market Analysis
Market Analysis is an essential part of every functional business plan. As an entrepreneur, you need to know your market and the factors affecting your market. Provide an in-depth vision of your market, your industry statistics, its current size, growth potential, trends. List the characteristics of your potential customers and their demographics such as population, age, sex, income. Give information about your customers’ choices, consumption habits, etc.
A good market analysis will build a base for your fast-food restaurant business and for your product & service strategies.
This section is also a good place to include your SWOT analysis. A SWOT Analysis is a strategic tool which helps you identify your business’ Strenghts, Weaknesses, Opportunities and Threats. While doing your SWOT Analysis, be aware that Strengths and Weaknesses refer to internal factors, i.e., things you have control over and can change. In contrast, Opportunities and Threats are external factors, i.e., things you cannot control, but you can potentially respond to.
Competitive Analysis
Competition is an important aspect in food and restaurant industry. In a selected location, there are usually more than one restaurants and there are several choices for the consumers from several providers. That’s why, you need to analyze your competitors very well and figure out your strengths and advantages against your competitors.
Make a comparative list of your competitors’ strengths and weaknesses and define the differentiators that will make your fast-food restaurant a go-to choice.
Sales and Marketing Plan
Construct a well-defined sales and marketing plan to attract your customers and to gain the profits you need. To build this plan, first, concentrate on your target customer profiles. Develop unique and attractive sales propositions for your target customers. These can be the factors like fast delivery, delicious food, healthy and quality ingredients, convenience, affordability, etc.
Set up and define your marketing strategies considering social media, local ads, promotional events, on-line sales platforms, etc.
Describe your sales channels (on-line, in-store, take-away, car, etc.), including your sales process, techniques, and activities, including your payment collection processes. Explain why your chosen distribution channels are the most effective for reaching your target market.
Discuss how you will acquire and retain customers and any incentives or programs aimed at increasing customer loyalty.
Management and Operations Plan
This section is the showcase of your team, the illustration of your organization, the description of your Daily and weekly operations and details of staffing plan.
Write the details about your background (and your partners’ if any), provide information about your past experience, include any additional info which might be useful to Express your professionalism and business acumen.
Draw a clear Picture of your organization, define the key team members, their roles and responsibilities, provide an organizational scheme if possible.
Write down your day to day and weekly operations plan like which days and hours your restaurant will be open, to how many people you are expecting to serve each day, how many hours your restaurant will operate, how will the supplies be purchased, from where, what times of the week, how they will be cooked and served, by how many people, how the collection will be done, if there will be package delivery or not, how many waiters will be, etc.
Provide a personnel plan as a list, write the headcounts for each role, starting from the highest level to the lowest. Indicate the monthly and annual salaries of each personnel.
Financial Plan
A viable financial plan is a path to a successful business. Therefore, spend extra time to deliver your financial plan. Make brainstorming with people, observe your competitors and try to make correct assumptions about your financial forecasts. Overall, a business is there for its financial success. If there is not a financial success, it will close its doors.
First of all, start by your startup costs and startup expenses. These are the basics of your restaurant business and your business depends on these startup capital.
Startup costs are “one-time” costs that occur when you setup your business. They are different from startup “expenses”. They are not fully recognized as expenses in the year they occur, they are usually depreciated or amortized in several years. These cost may include:
Equipment Purchase, License & Permits, Branding, Deposits (Rent/Utility), Office Furniture & Equipment, Remodeling/Leasehold Improvements, Website Development, etc.
On the other side, there are startup “expenses” which are recognized at the year they are incurred. They are recurring expenses such as rent, insurance, wages, Office supplies, etc.
Startup costs and startup expenses will give you the initial costs of your restaurant business. In other words, the sum of startup costs and startup expenses is your required funding amount to open your restaurant.
After defining your initial costs, you need to construct a reasonable financial plan for the next 3 or 5 years. This will give you clarity about how much sales you need to realize, with which prices, to how many people, etc.
Start with estimating your sales for each month for the first year. Then, estimate annual sales for year 2 and year 3. Make your assumptions according to your product prices, segments and number of the customers that you are anticipating to sell your products.
After estimating sales, estimate your expenses. Again, monthly for the first year and annually for the second and third years. Your expenses should include Cost of Goods Sold, wages, rent, operating costs, etc.
At the end, your sales minus your expenses will give you a rough estimation about your profit for each year. (you can consult with a Professional for taxes also).
Appendix
When organizing the Appendix, include the materials that are referenced in the main sections of your business plan or those that provide significant additional insights or context.
Provide the necessary documents such as proforma financial tables, projections, assumptions, location maps, charts, graphs, images, cv’s of founders, etc.
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