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Making a Risk Management Plan for Your Business
It’s impossible to eliminate all business risk. Therefore, it’s essential for having a plan for its management. You’ll be developing one covering compliance, environmental, financial, operational and reputation risk management. These guidelines are for making a risk management plan for your business.
Developing Your Executive Summary
When you start the risk management plan with an executive summary, you’re breaking apart what it will be compromised of into easy to understand chunks. Even though this summary is the project’s high-level overview, the goal is describing the risk management plan’s approach and scope. In doing so, you’re informing all stakeholders regarding what to expect when they’re reviewing these plans so that they can set their expectations appropriately.
Who Are the Stakeholders and What Potential Problems Need Identifying?
During this phase of making the risk management plan, you’re going to need to have a team meeting. Every member of the team must be vocal regarding what they believe could be potential problems or risks. Stakeholders should also be involved in this meeting as well to help you collect ideas regarding what could become a potential risk. All who are participating should look at past projects, what went wrong, what is going wrong in current projects and what everyone hopes to achieve from what they learned from these experiences. During this session, you’ll be creating a sample risk management plan that begins to outline risk management standards and risk management strategies.
Evaluate the Potential Risks Identified
A myriad of internal and external sources can pose as risks including commercial, management and technical, for example. When you’re identifying what these potential risks are and have your list complete, the next step is organizing it according to importance and likelihood. Categorize each risk according to how it could impact your project. For example, does the risk threaten to throw off timelines or budgets? Using a risk breakdown structure is an effective way to help ensure all potential risks are effectively categorized and considered. Use of this risk management plan template keeps everything organized and paints a clear picture of everything you’re identifying.
Assign Ownership and Create Responses
It’s essential to ensure a team member is overseeing each potential risk. That way, they can jump into action should an issue occur. Those who are assigned a risk, as well as the project manager, should work as a team to develop responses before problems arise. That way, if there are issues, the person overseeing the risk can refer to the response that was predetermined.
Have a System for Monitoring
Having effective risk management companies plans includes having a system for monitoring. It’s not wise to develop a security risk management or compliance risk management plan, for example, without having a system for monitoring. What this means is there’s a system for monitoring in place to ensure risk doesn’t occur until the project is finished. In doing so, you’re ensuring no new risks will potentially surface. If one does, like during the IT risk management process, for example, your team will know how to react.
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Everybody’s got to eat and there’s still plenty of niche aspects of food and beverage business for entrepreneurs to explore. Locally sourced, organic, farm-fresh, delivery, craft, pick a buzz-word and there’s an opportunity there.
So if you think you have the makings of the next top chef, developed a secret whiskey recipe that will blow people’s minds, or even have a better way of doing delivery, you may want to enter the food and beverage business.
Start cooking up your business plan with our library of foodie-themed sample plans or build a more modern plan to easily manage your restaurant, bar, or cafe with LivePlan . It contains the same food and beverage templates and information you see here, but with additional guidance to help you develop the perfect plan.
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How to Write a Restaurant Business Plan in 2023 (Step by Step Guide with Templates)
Jan 31, 2023 6:30:00 AM
Have you decided to open a restaurant? Has it been something you've thought of doing for years and are finally in a position to make it happen?
Regardless of how much time you've spent conceptualizing your idea and researching the industry, without proper planning, your restaurant is doomed for failure.
That's where a restaurant business plan comes in. A restaurant business plan is a framework that guides you to plan and forecast every element of restaurant management and operations; from menu design, location, financials, employee training, and a lot more, and helps develop your restaurant ideas into a reality.
Read on for everything you need to know about writing a restaurant business plan along with samples and tips.
Why is a Restaurant Business Plan Important?
Many new restauranteurs fail to put together a well-thought-out restaurant business plan because the process can be a bit difficult and time-consuming. But without a proper restaurant business plan, you're shooting in the dark without an aim. It's unlikely that you would be able to secure an investor to help fund your restaurant dream without a proper plan. And even if you do, the lack of proper planning, regulations, and forecasts will set your restaurant up for failure.
Your restaurant business plan is what is going to map out how you plan on turning a profit from your business as well as where your restaurant fits into the saturated market and how you plan on standing out.
A little time and pain early on are worth the reward of a successful restaurant in the long run.
11 key steps a restaurant business plan should include
A good business plan varies from restaurant to restaurant and takes into account factors like style of restaurant, target market, location, etc. If you're new to the restaurant game, the idea of creating a business plan can be daunting. To help you get started, we have highlighted the key elements you need to include when writing a restaurant business plan.
Depending on who you are presenting your business plan to, you can change the order of the sections to reflect priority.
Here are the main components of a restaurant business plan
- Executive Summary
- Company Description
- Market Analysis
- Restaurant Design
- Market Overview
- External help
- Financial Analysis
1. Executive Summary
A restaurant business plan should always begin with an executive summary. An executive summary not only acts as the introduction to your business plan but also a summary of the entire idea.
The main aim of an executive summary is to draw the reader (oftentimes an investor) into the rest of your business plan.
Common elements of an executive summary include:
- Mission statement (learn more about how to write a good mission statement here )
- Proposed concept
- A brief look at potential costs
- Expected return on investments
An executive summary is imperative for those looking to get investors to fund their projects. Instead of having to comb through the entire restaurant business plan to get all the information, they can instead just look through the executive summary.
2. Company Description
This is the part of the restaurant business plan where you fully introduce the company. Start this section with the name of the restaurant you are opening along with the location, contacts, and other relevant information. Also include the owner’s details and a brief description of their experience.
The second part of the company description should highlight the legal standing of the restaurant and outline the restaurant’s short and long-term goals. Provide a brief market study showing that you understand the trends in the regional food industry and why the restaurant will succeed in this market.
3. Market Analysis
The market analysis portion of the restaurant business plan is typically divided into three parts.
3.1 Industry Analysis
What is your target market? What demographics will your restaurant cater to? This section aims to explain your target market to investors and why you believe guests will choose your restaurant over others.
3.2 Competition Analysis
It's easy to assume that everyone will visit your restaurant, so it is important to research your competition to make this a reality. What restaurants have already established a customer base in the area? Take note of everything from their prices, hours, and menu design to the restaurant interior. Then explain to your investors how your restaurant will be different.
3.3 Marketing Analysis
Your investors are going to want to know how you plan to market your restaurant. How will your marketing campaigns differ from what is already being done by others? How do you plan on securing your target market? What kind of offers will you provide your guests? Make sure to list everything.
The most important element to launching your restaurant is the menu . Without it, your restaurant has nothing to serve. At this point, you probably don’t have a final version, but for a restaurant business plan, you should at least try to have a mock-up.
Add your logo to the mock-up and choose a design that you can see yourself actually using. If you are having trouble coming up with a menu design or don’t want to pay a designer, there are plenty of resources online to help.
The key element of your sample menu though should be pricing. Your prices should reflect the cost analysis you’ve done for investors. This will give them a better understanding of your restaurant’s target price point. You'll quickly see how important menu engineering can be, even early on.
The company description section of the restaurant business plan briefly introduces the owners of the restaurant with some information about each. This section should fully flesh out the restaurant management team.
The investors don’t expect you to have your entire team selected at this point, but you should at least have a couple of people on board. Use the talent you have chosen thus far to highlight the combined work experience everyone is bringing to the table.
6. Restaurant Design
The design portion of your restaurant business plan is where you can really show off your thoughts and ideas to the investors. If you don’t have professional mock-ups of your restaurant rendered, that’s fine. Instead, put together a mood board to get your vision across. Find pictures of a similar aesthetic to what you are looking for in your restaurant.
The restaurant design extends beyond aesthetics alone and should include everything from restaurant software to kitchen equipment.
The location you end up choosing for your restaurant should definitely be in line with your target market. At this point, you might not have a precise location set aside, but you should have a few to choose from.
When describing potential locations to your investors, you want to include as much information as possible about each one and why it would be perfect for your restaurant. Mention everything from square footage to typical demographics.
8. Market Overview
The market overview section is heavily related to the market analysis portion of the restaurant business plan. In this section, go into detail about both the micro and macro conditions in the area you want to set up your restaurant.
Discuss the current economic conditions that could make opening a restaurant difficult, and how you aim to counteract that. Mention all the restaurants that could prove to be competition and what your strategy is to set yourself apart.
With restaurants opening left and ride nowadays, investors are going to want to know how you will get word of your restaurant to the world. The marketing and publicity section should go into detail on how you plan to market your restaurant before and after opening. As well as any plans you may have to bring a PR company on board to help spread the word.
Read more: How to write a restaurant marketing plan from scratch
10. External Help
To make your restaurant a reality, you are going to need a lot of help. List any external companies or software you plan on hiring to get your restaurant up and running. This includes everything from accountants and designers to suppliers that help your restaurant perform better, like POS systems and restaurant reservation systems . Explain to your investors the importance of each and what they will be doing for your restaurant.
11. Financial Analysis
The most important part of your restaurant business plan is the financial section . We would recommend hiring professional help for this given its importance. Hiring a trained accountant will not only help you get your financial estimates in order but also give you a realistic insight into owning a restaurant.
You should have some information prepared to make this step easier on the accountant. He/she will want to know how many seats your restaurant has, what the check average per table will be, and how many guests you plan on seating per day.
In addition to this, doing rough food cost calculations for various menu items can help estimate your profit margin per dish. This can be achieved easily with a free food cost calculator.
Restaurant Business Plan Template
Ready to get started? Download our free restaurant business plan template to guide you through the process.
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How to Create a Food Service Business Plan
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- Business Planning & Strategy
- Creating a Business Plan
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How to Write a Business Plan for a Convenience Store
How to start a small deli business, how to write a startup airline business plan.
- How to Write a Business Plan for an Acquisition
- Budget for a Grand Opening
The food industry is an expansive one that strives to meet the needs and tastes of every customer. The U.S. Bureau of Labor Statistics reported that the United States held more than 500,000 food service establishments in 2008. In this growing industry, a strong business plan will help you identify the steps and strategies needed to achieve and maintain success.
List general details about your business. Include the name of your business, and its full address and contact information. List the names of each owner, along with a brief description of each person’s professional experience. State the legal business description of your business, such as sole proprietorship or partnership, and explain the short- and long-term goals of your business.
Identify the staff members that your business needs to operate efficiently. Determine which positions will be full-time or part-time, and provide a brief description of each position’s functions and responsibilities. Identify the costs of each manager and employee, including payroll, benefits and training costs.
Explain the needs of your food operations. Make a list of the furniture and equipment that your business needs to operate, such as stoves, coolers, refrigerators and warmers. Determine whether your business will rent, lease or purchase the equipment and list the costs for each piece. Identify the ideal location for your food business. Ascertain the costs of the location, including the costs of utilities, vendor and food licenses, zoning compliance, taxes and monthly property costs.
Provide information on the suppliers and vendors that your business will use regularly. Create a list of those vendors and suppliers. Include each company’s contact information, along with a list of the items that you will purchase and the costs for each. Explain how your business will control its inventory.
Research the food industry in your area. Identify any voids within the market and determine how your business can fill those voids. Identify the types of food in which your food business will specialize and develop a menu. Include the costs of each menu item and list any additional services or products that your business will provide or sell, such as delivery or specialty coffee mugs .
Identify your business’s target market and explain the methods that your business will use to attract and retain its customers. Identify your food business’s competition. Determine the strengths and weaknesses of your business and those of your competition. Explain the strategies that your business will use to counteract its competition.
Prepare your business’s financial statements. Provide one personal financial statement for each owner, along with a balance sheet, income statement and cash flow statement for your business. Include accurate information and make realistic projections and assumptions when necessary.
Include supporting documents in the appendix of your food service business plan. Supporting documents include lease agreements, tax returns, vendor contracts, market research and your business’s menu.
Introduce your food business in the business plan’s executive summary. Provide a brief description of your business, its menu and its objectives. Introduce the owners of the business and briefly describe their experience. Highlight your business’s target market and competition and provide key facts on how your business will maintain its lead in this competitive industry. Limit your executive summary to two pages and place it in the front of the business plan.
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Writing professionally since 2004, Charmayne Smith focuses on corporate materials such as training manuals, business plans, grant applications and technical manuals. Smith's articles have appeared in the "Houston Chronicle" and on various websites, drawing on her extensive experience in corporate management and property/casualty insurance.
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- Business Plans - Volume 03
- Food Processor Business Plan
12659 San Ablo Blvd. Santa Fe, New Mexico
This business plan is for a food processor within the specialty foods industry who will be using various marketing strategies to reposition their product and become a reknowned manufacturer of high quality foods. The following plan will outline the products history, competition, potential new markets, and promotional opportunities.
Situational analysis, strategic plan, tactical plan.
Rio Grande Foods is a food processor in the specialty foods industry (SIC 2033) and sells its products on a wholesale basis to brokers, distributors, and retailers. The present product mix is one product wide and the line is two products deep. The product is Rio Grande Salsa Picante, which can be found in a 16 oz. Paragon jar in both mild and medium heat levels. The salsa is a richtextured, home style salsa which sustains the individual flavors of the all-natural ingredients. The ingredients are as follows: diced tomatoes, garlic, cilantro, onions, jalapeno peppers, salt, and a trace of organic vinegar.
Rio Grande Foods utilizes a co-packer for processing purposes. A co-packer is a company that has the facilities to process foods for public consumption. In order to be an acceptable and legitimate co-packer, the company must be certified by the Food and Drug Administration and the New Mexico Department of Health. Rio Grande Foods' co-packer is C & D Mexican Foods. Taking marginal costs and operating expenses into consideration along with primary competition prices, Rio Grande Salsa Picante's wholesale cost is $2.25. The company's primary competition has its product priced at $2.50 on the wholesale level. Rio Grande Salsa Picante can be found at three different concept stores - grade "A" grocery stores, specialty food stores, and gift shops. Rio Grande Foods utilizes mostly push strategy efforts through the use of guerrilla warfare tactics. The type of sale promotions utilized are trade oriented in the form of credit terms, discount offers, and occasional volume discounts. Consumer oriented sales promotions will be through the print media, such as point of purchase recipes and some couponing (premiums). Rio Grande Foods mission is to earn a position in consumers minds as a manufacturer of high quality Mexican foods in the specialty foods industry. The company will do this by producing products that have an authentic texture and flavor by using the highest quality ingredients possible. Objectives are to be positioned in the specialty foods market throughout New Mexico by 1998 with sales volume increasing 9% on an annual basis. These figures will be based on the number of case units sold annually (12/16 oz. Pack). The company has a .03% market share at the present time and has goals of attaining a .0316% hold on the market by the end of the third quarter in 1995.
Business and Product Service Description
Rio Grande Foods is in the processed foods industry. The Standard Identification Classification code for this industry is 2033. More specifically, Rio Grande Foods is in the specialty foods industry procession and wholesaling Mexican salsa picante. Specialty products are foods, beverages or confections meant for human use that are of the highest grade, style and/or quality in their category. The specialty food nature derives from a combination of some or all of the following qualities: their uniqueness, exotic origin, particular processing, design, limited supply, unusual application or use, extraordinary packaging or channel of distribution has been growing strong since the 1950's and is now beginning to stabilize the rate of growth. This specialty foods segment is small compared to the highly commercialized market in which Pace foods and Old El Paso venture. Being that this is a relatively small industry the composition of it consists of several small independent processors and wholesalers. Even though the niche of the specialty foods industry is small, it was worth $30 billion in 1993. The condiment segment itself is worth $13 billion. Rio Grande Foods' products are aimed at middle aged consumers with high disposable incomes. However, prices are much lower than most competitors that other income brackets can afford to purchase a specialty Mexican salsa. Rio Grande Foods has had great success thus far in its start up period. The high quality and fancy packaging go hand in hand with the authentic flavor of Mexican salsa picante. The availability of two heat levels allow for access into other consumers tastes. Larger product mixes of other companies are forcing Rio Grande Foods to develop other products in the future.
Mission and Objectives
Rio Grande Foods' mission is to earn a position in consumers minds as a manufacturer of high quality foods in the specialty foods industry. This will be done by producing food products that have an authentic texture and flavor by using only the highest quality ingredients. Objectives are to be positioned in the specialty foods market throughout New Mexico by 1988 with sales volume increasing 9% on an annual basis. These figures will be based on the number of case units sold annually (12/16 oz. Pack).
Rio Grande Salsa Picante is a rich-textured, home style salsa which sustains the individual flavors of 100% all-natural ingredients. The ingredients consist of diced tomatoes, garlic, cilantro, onions, jalapeno peppers, salt, and a trace of vinegar. They combine to yield a product that has no fat, 2 grams of carbohydrates, 2% vitamin A, and 10% vitamin C. Rio Grande Salsa Picante has no artificial preservatives, fillers, oil, water, or sugars. This is what distinguishes it from other brands and qualifies it as a specialty food. The packaging is also very attractive. It has a very "classy" and conservative look at the same time. The trademark is a ristra of chiles and the name Rio Grande written in a vibrant red. The background is a chipped stucco wall that exposes bricks. It helps amplify the authenticity of the product.
Market potential for the condiment segment is very high. The two highest ranking condiments are Mexican salsa and ketchup, first and second respectively. Since Mexican salsa is out selling ketchup it is apparent that there is a lot of room for growth within this segment. Recently, there has been some growth within minority ethnic populations and sales are expected to increase in the specialty food industry as a whole. The Hispanic population has seen a 38% increase since 1980 along with a 71% income increase. Also, several cooks have developed recipes which contain Mexican salsa, for example, chile con queso and salad dressings.
The current market size of Rio Grande Foods is held within Santa Fe, NM. The customer base on the wholesale level is made up of 10 companies for a total of 16 retail store locations. All of these accounts handle a vast variety of specialty foods. The market size is expected to grow steadily.
Demand Trend for Product
Mexican salsa picante has reached a point of saturation in the southern part of the United States. A shake out is presently occurring, large wealthy processors are riding out losses for long periods at a time by offering sales promotions and price savings. They are trying to keep customers from buying the competitions brands so that their competitors might go out of business. However, this is going on in the high volume commercial market. In the specialty foods industry, prices are not going down, the product mixes are going up per company. All sorts of varieties are beginning to appear. J. Jose's has a Mexican salsa, a salsa verde, chile con queso, spices, candies, hot sauces (Tabasco style), mayonnaise, tartar sauce, and gift boxes. End consumers like to be different and daring. Mexican fruit salsa is the latest in the market, with variations such as peach, strawberry, pineapple, and other strange and exciting flavors. Rio Grande Foods plans to diversify its product line offerings so that it might be able to increase revenues and consumer interest.
Current Market Segments
Rio Grande Foods' is only supplying retail stores in three categories. They are grade A grocery stores, specialty food stores, and gift shops. An example of a grade A grocery store is J.E.B. Marketplace in Santa Fe, NM. These are the larger grocery stores that large grocery chains, such as J.E.B. open in locations near large upper income locations. They carry all of the highly commercialized grocery and general merchandise, but they also carry some specialty food items. About 24% of their total merchandise is specialty food items. These stores are normally close to several small populations with access from several different locations. Specialty food stores are generally small in size yet very fancy or unique in design. They are located in or near wealthy neighborhoods. They only carry specialty food products. The average cost for a 16 oz of Mexican salsa at these stores is $3.75. An example of a specialty food store would be Farm To Market on Taylor Hwy. in Santa Fe, NM. Products found in these stores' gift shops are normally products that are indigenous to the city or state in which it is located. The reason for this is that the majority of the customers are tourists. They are located near tourist attractions in cities or in major malls. An example of a tourist gift shop is Toddies in Franklin Mall located in downtown Santa Fe, NM. All of these stores have one thing in common, they all attract specialty food enthusiasts.
Market Segment Currently Targeted
The market segment currently targeted are individuals that fall into the following categories:
- 35-44 years old
- home rented (not owned)
- income of $50,000 and over
- dual income household
Of the people who will fit in above, these are the top ten lifestyles ranked by index:
Rio Grande Foods' immediate competitor is J. Jose's. J. Jose's has a product mix of 11 products with an average depth of 3. They have Mexican salsa (red), salsa verde, chile con queso, mayonnaise, tartar sauces, Tabasco style hot sauce, spices candies, olives, mustard, and chips. Other competitors are New Canyon Farms, Don Jovencio's, Rio Diablo, Truly Texas, Guiltless Gourmet, and Rose's. These all process specialty salsa in the same market segments, however, they are priced slightly higher.
Different Advantage(s) by Segment
Rio Grande Foods has an overall lower cost throughout the channels. On the wholesale Rio Grande Salsa Picante is priced lower, thus allowing the retailer to still meet their pricing margins and at the same time the product has a lower retail price. Rio Grande Salsa has a fancy package in a competitive container. The label also reveal nutritional facts about the product unlike the competitor's products.
Members of the targeted market enjoy Rio Grande Salsa Picante on an occasional basis. A consumer can expect to pay anywhere from $1.99 to $3.50 for a 16 oz. jar of Rio Grande Salsa Picante. The consumer is beginning to be inventive by using salsa on almost anything that has cheese, vegetables, or meats, along with several other dishes.
Comparison of Competitive Players
This year Rio Grande Foods saw sales increase by 200% by the end of the second quarter as it began establishing and broadening its customer base. In terms of volume, sales increased from 1993 sales of 82 cases to 1994 third quarter sales of 244 cases. In terms of market share, some difficulty is encountered because of the fragmented and small specialty Mexican salsa market. In the specialty Mexican salsa market, the market leaders J. Jose's and New Haven Farms who hold 34% and 27% respectively when the 23.8% allocated below will show how small the specialty food market is compared to the entire Mexican salsa market as a whole.
The category titled other does not only consist of specialty food processors in the specialty food industry, but countless other small private label companies selling in mom and pop convenience stores, grocery stores, and even to friends.
Comparison of Competitor's Resources/Willingness
After having viewed the breakdown of market share and Rio Grande Foods' sales volume, it is plain to see that this company is only a pebble in a quarry when compared to J. Jose's. Jose's has a larger flow of capital and has a higher inventory turnover rate compared to Rio Grande Foods. Rio Grande Foods has a lot of growing up to do before it even becomes a contended or an actual threat to Jose's. Jose's has a large product mix with great adequate depth in each line. They have consumer recognition due to the large amount of shelve space they occupy in the stores. Jose's know the tricks of the trade in production, distribution, and direct marketing, because they have been in the game longer than Rio Grande Foods. There is a new contender in the market that could pose a threat for Rio Grande Foods in the future. The name of the Mexican salsa is Chili's. Chili's utilizes the same 16 oz. container as Rio Grande Foods and has a mild, medium, and hot Mexican salsa picante. They are small players like Rio Grande foods with potential to grow and increase market share.
Additional Segments to Target
Rio Grande Foods would also do very well to expand into other large metropolitan cities, such as Albuquerque, Las Cruces, Roswell, etc.. Other very strong cities where the National Association for the Specialty Food Trade, Inc. is headquartered in New York along with the entire east cost region of the United States. Mexican salsa has just begun to make its mark in this region. Specialty food stores can be found all over in these areas. The larger the city in most cases the larger the standard of living thus yielding higher incomes. Being that Rio Grande Salsa Picante is from Santa Fe, NM, people of these eastern regions would be very excited to try an authentic Mexican salsa like Rio Grande.
A primary competitorin the un-targeted segments would be J. Jose's. Jose's is the leader of Mexican salsa in the specialty foods market. They have surplus resources to venture and test other potential markets. Being that Rio Grande Foods is fighting as a guerrilla, it has to put all of its resources into one attack and only one. It does not have the resources to fight a flanking battle. The assets that Rio Grande Foods does have are creativity and enthusiasm. Another restaurant that might pose a threat in the future is Chili's. It is based in Santa Fe, NM and is competing in the current segment of Rio Grande Foods. It is important that Rio Grande Foods eats up all of the available market share possible before Chili's does, because it can not afford another competitor.
Impact of economic trends.
Food processors and retail food store operators approach 1995 with some concern. While inflation is expected to remain under control, processors and retailers are concerned about the pace of domestic and international recovery and the expected growth of non-traditional retail outlets. Processors of brand name products will strive to stem the flow of less costly generic goods while retailers will attempt to offset the effects of new, non-traditional competition. Adjusted for inflation, the value of shipments of the food and beverage sector is forecasted to rise about 1 percent in 1995. Processors are also concerned about NAFTA, it has brought great export opportunities and will continue to bring opportunity in the future years. However, some processors fear backlash, which would have adverse effect on 1995 U.S. export sales. Processors are also concerned about the rate of recovery worldwide. For 1995, the value of processed foods and beverage exports is forecasted to rise about 5% to more than $25 billion. Over the next five years, the processed food and beverage industries are likely to grow slowly; adjusted for inflation, the value of aggregate industry shipments is forecasted to grow 1% a year. The industry growth in the beginning of the year will not be large, but will improve as the U.S. and international economies improve.
Impact of Social/Cultural Trends
Aside from the presently targeted consumers for a specialty Mexican salsa like Rio Grande Salsa Picante, other ethnic markets are beginning to emerge in the 1990's. For example, the Hispanic population in the United States has increased by 38% since 1980. But not only is the population growing, so is their annual income. More and more Hispanics are seeking an education past high school, which has led to a 71% increase in their income. At the present time, Rio Grande Salsa Picante is appealing to the Hispanic market, in terms of flavor and authenticity. The only problem is that the portion of this population that can afford to purchase specialty items has remained very small. Now, in the 90's it is beginning to reach a point where the Hispanic purchasing power cannot continue going on without notice by small and large processors.
Impact of Political/Legal Trends
As specialty food and retailers know, many consumers are reading food labels. Interest in the nutrition label and claims such as "no cholesterol" are examples of this phenomenon. So, just around the corner is another marketing tool for specialty food processors. It is known as organic labeling. In 1995, the Department of Agriculture (USDA) is expected to finalize its rules on organic food production, processing and labeling. This federal program will go side-by-side with state organic certification programs, which may contain additional or more restrictive that the federal program. However, the state programs must be approved by USDA, the state labeling must be consistent with federal labeling. Labeling cannot say that the particular state's products are of superior quality, and the state may not discriminate against out of state foods that bear the USDA label. A food which contains at least 95% ingredients which meet the farm-to-table requirements may use an organic claim, such as," 100% organic". It may also bear the USDA shield to show that the product meets USDA standards for organic production, and also bear the logo of the certifying agent. This is something that Rio Grande Foods can concern itself with in the future, it is not something that is mandatory. Rio Grande Foods needs to allocate all of its capital resources to what it is trying to accomplish in the marketplace. This organic logo is just another point of purchase tool that Rio Grande Salsa Picante has already used. The latest law that has been already ratified since May 1993 is the Nutrition Labeling and Education Act. This law was developed and ratified by the Food and Drug Administration (FDA) as the consumer market demanded. This law simply requires food products for public consumption to reveal nutritional facts on the package itself. Rio Grande Foods has already complied with this required law. The reason Rio Grande Foods did not have to comply with the law immediately is because there is a low volume item exemption. If a processor does not have volumes sales that generate $60,000 or more on an annual basis or sell 600,000 individual units, it is not required to comply.
Impact of Related Technology
In the grade A grocery stores like J.E.B. Marketplace mentioned above, Efficient Consumer Response is beginning to be utilized by large grocery store suppliers. This service is being used by processors and distributors alike. This service is offered by the Uniform Code Council (U.C.C.), which is located in Dayton, Ohio. This is the same company that makes the service of Uniform Product Code symbols (U.P.C.) on most retail items these days. The Efficient Consumer Response service allows processors to be directly in touch with their customers, be it distributors or retailers. The information they receive is scan movement information, this means that each time a related product of the processor is sold at a particular retail location, they are made aware of it electronically. This scan/product movement allows processors to operate on the efficient Just In Time method. Present primary competitors are not using this service, however, it is a thing of the future. Pace Foods is already utilizing this service. The reason they are is because they move such high volumes of product and their processing material requirement planning depends on it. Rio Grande Foods is only utilizing the U.P.C. symbols for efficient retail handling of the products. It also allows the retailers to know if the product is moving good enough to make them a profit with the shelf space Rio Grande Salsa Picante is occupying.
Capabilities and responsibilities.
Rio Grande Foods is a very small company in the start up stages of a business venture. The product itself is in the growth stage at the present time. Rio Grande foods will continue to look for an additional customer base outside of Santa Fe, NM and will aim for larger and wealthier markets such as the ones mentioned above in the opportunities section. Rio Grande Foods has a lot of potential in terms of growth if it can successfully launch a product that is unique into the specialty foods market. Customers are already testifying that it is truly an authentic experience and they are asking for a list of other products the company has to offer. Rio Grande Foods is led by a young, creative and talented management team. The primary product has surprisingly gotten off the ground in a market which was said to be super saturated by the Wall Street Journal in 1993. The credit goes to the quality of the product and the management team which consisted of one individual and later expanded to two in the summer of 1994.
Rio Grande Foods is very committed to maintaining their mission statement of authenticity. The company will not put a product on the market just to have a diverse product mix. If the products that they try to develop do not abide by the mission statement they will be discontinued. Management works hard to maintain the authentic reputation from the stationery their presentations are presented on to the products themselves. Management knows that without profits the company will no longer exist, but profit is not the only reason for the company's existence. Management puts employee and customer satisfaction above everything else. They feel that if the consumer is happy so are the employees, because they are directly related. If the consumer is happy, profits will take care of themselves.
THREATS AND OPPORTUNITIES
- Consumer preference of non-traditional salsa, such as the fruit salsa discussed above over authentic salsa picante like Rio Grande brand
- Target market becomes more interested in Tabasco style hot sauces
- Constant entry of new competitors with more capital may win any potential market share
- Food processing plant may be brought out by a large successful processor who is ready to handle its own production
- The economy stumbles and the Hispanic population is unable to flourish the way it has been into the specialty foods market
- Communicating wrong message to consumers about the product/company
- Company is unable to keep up with changing factors in the targeted segments
- Sales are not good enough to sustain growth
- Consumers of other types of salsa and sauces prefer a more authentic experience
- Growth in consumer awareness is directly related to word of mouth advertising
- The growth segment of the products life cycle will show consumers that Rio Grande Salsa
- Picante is preferred over the others
- Changes in market segmentation will be a new path for new markets (restaurants)
- Current targeted consumers become brand loyal to Rio Grande Salsa Picante
- Increased product diversity can make the company more noticeable for its brand name and quality
- A more diversified product mix can open the doors to new consumer segments and markets
- Rio Grande Foods product will set a new standard for specialty Mexican salsa
- Rio Grande Foods' can prosper while large competitors rival amongst themselves
- Ability to stay ahead of the competition by complying with new packaging and product laws even though it is not required to do so
STRENGTHS AND WEAKNESSES
- Young motivated, creative, and educated management
- High quality product
- Lower wholesale cost due to cost savings on packaging: three color label
- High volume jar and lid make for lower costs, and low miscellaneous expenses
- Financed only through family equity
- Good relationship with co-packer (C&D Mexican Foods)
- Competitive packaging
- Located near larger consumer markets, such as Albuquerque, Las Cruces, and Santa Fe
- Appropriate packaging for the specialty food market
- Experienced independent sales representative
- Nutritional facts table
- Development of new recipes
- Member of the National association for the Specialty Food Trade, Inc. (NASFT)
- Aware of primary competitor (J. Jose)
- Limited time to allocate 100% effort by management
- One product-product mix
- Small distribution established
- Low inventory turnover rate
- Limited consumer awareness
- Small budget for print media (direct marketing)
Assumptions for threat and opportunity statements.
- Consumers will continue to purchase traditional authentic salsa picante
- Tabasco style hot sauces already have their own share of the "hot sauce market" as a whole, but there is plenty of room for both styles of salsa
- Rio Grande Foods will have to continue with Guerrilla warfare tactics in order to stay ahead of the big player's advertising campaigns
- Food processing plant co-packer is committed to several large private label companies that will not allow it to sell out
- Rio Grande Foods will not lose its focus and communicate the wrong message to its consumers
- Sales will pick up in the future when the product line becomes more diversified with product categories that are not nearly as competitive as the Mexican salsa product category
Objectives of marketing plan.
The company's objectives are to earn a position in the marketplace as a manufacturer of high quality Mexican food products in the specialty foods industry. Committed to supplying grade "A" grocery stores, specialty food stores, and gift shops, on a wholesale basis only, throughout Texas by 1998. At the same time the company wants to diversify its product mix steadily with products of the same quality standards as Rio Grande Salsa Picante. Sales for 1 year from 1994 up to the present have increased by 300%. The reason for the big surge is because it wasn't until the beginning of 1994 that the company started to push its products. Revenues were $2,200 in 1993, they have grown to $6,600 by the end of the third quarterin 1994. However, the company needs to reach revenues of $7,500 before it can break even. The company is sure to do this by the third quarter of 1995 if it can meet its goal of a 9% increase in sales per year up to 1998, once account growth stabilizes by the end of the second quarter in 1995. By the third quarter in 1995 with all goals met, market share should be .0316% up from .03% at the end of the third quarter in 1994. The company is planning on accomplishing its goals by doing what is written in the mission/objective statement, which is to position the company and the product in the client and consumers mind as a processor of high quality products and nothing less. Packaging will assist in the positioning of the product by revealing nutritional facts and by reinforcing the idea of authenticity.
The national marketplace for the condiment segment of the specialty foods industry is worth $ 13 billion. Rio Grande Foods has just begun its hike in terms of growth. It has only tapped into the Santa Fe, NM market at the present time. The beginning of 1994 marked the beginning of the company's intial effort to establish its customer base, at which time it saw an increase of 200% by the second quarter and 300% by the end of the third. When growth begins to stabilize the company expects growth of 9% per annum. The company will continue to target the high income educated individuals originally discussed in the "Market Segment Currently Targeted" section of this plan. Any promotional efforts will be prepared and implemented with that type of individual in mind. Rio Grande Foods will also have to remember the flourishing Hispanic market in the near future who will be very capable of purchasing specialty foods. In order to achieve the company's print media marketing objectives, sales will have to be in the $7,500 plus (+) category overall. The company will have to keep enlarging its customer base and must also maintain a 9% annual growth rate once growth has been stabilized. Other important factors to consider are consumer taste/preferences and trends.
The target market that the company will need to satisfy is one that is looking for specialty food items. Products are considered specialty food items because of their unusually high product quality due to ingredients and not for unusual packaging. The consumer in the specialty food industry is just as concerned about value as the consumer in the highly commercialized industry. The specialty foods consumer is not simply interested in spending his/her money on more expensive food products to make a fashion status statement. This is why Rio Grande Salsa Picante can be found a few cents cheaper, to a few dollars cheaper in some cases, in the market place. The company wants to be perceived as a "quality leader" in the specialty foods industry.
Current Product Fit per Segment - The current products of Rio Grande Foods satisfies the very active, health conscious consumers in the specialty food industry, because of the better quality products that can be found in terms of ingredients. This consumer pays more for a specialty food item only because the quality of the ingredients justify the higher price. The nutritional factors are also very important to them and that is why Rio Grande Foods has nutritional facts on its packaging. Required Product Additions/Modifications - In order for the company to stay in operation it will have to increase its distribution to cities outside of Santa Fe, NM to increase the inventory turn over rate. It will also need to increase its product mix to a more diverse mix so that it can please a lot more consumers and to increase point of purchase visibility/awareness.
Additional Product Strategies - Utilize all of the company's strengths to make itself a strong preference to consumers and position itself as a "quality leader." To assist in accomplishing its goals the company will utilize a push strategy to get retailers to carry their product. Credit terms of 2/10 Net 30 are offered and occasional volume discounts will be offered.
Due to the nature of the product (Mexican salsa) and the specialty food industry itself, volume per store delivery is low. To elaborate, a delivery destination outside a 5 mile radius of the company is not cost effective if done by a company truck. Therefore, the company utilizes a parcel delivery company to distribute its products. United Parcel Services (UPS) is the company utilized for all deliveries to specialty food stores and gift shops. When orders need to be filled and product distributed, a phone call is all it takes to get a delivery truck over to the company to pick up the product. A $5.00 pick-up fee is charged per visit and the cost per package varies from $4.85 on up depending on the destination. Distribution to the higher volume grade "A" grocery stores are handled by the company itself. Not only is it cost effective, but it also helps increase product freshness and all merchandising activities as well. Quality and dependability is important in large stores, such as J.E.B Market Place, because without it the company risks loosing customers and eventually loosing the account. The reason UPS delivery is accepted in the other two segments is because those stores are not as competitive and busy as grade "A" grocery stores. They have someone to unpack and stock low volume items every day.
Additional/Modified Distribution per Segment - The only thing that can be improved is the number of accounts being serviced at the present time. The reason for this is not only to improve sales and profits, however, it is a factor that will assist in the process. If distribution could be increased to the point where there was a shipment every day, an account could be set up with UPS. This would eliminate the $5.00 pick up fee they have on sporadic pick up calls.
Distribution for Efficiency/Effectiveness - A larger customer base and a higher consumer awareness over other products will be needed to gain sales, market share, and to reduce marginal costs. Increased sales will increase inventory turnover rates, which means higher volume manufacturing will bring fixed manufacturing costs down. This will make the net profit margin larger if all expenses remain fixed. This will allow the company to allocate more funds to promotional efforts and product development.
Pricing Fit per Segment - The company is trying to position itself as a processor of highly valuable products in the specialty foods industry. It wants to be a "quality leader" and at the same time a "price leader". On the following page a breakdown of the company's specialty foods pricing practices can be seen on Table 1 in the appendices. The price will adjust through the years up to 1998 to compensate for an average inflation rate of 4%, this can also be seen at the bottom of Table 1. Table 1.5, is a pricing schedule that has been developed to show the average competitor's pricing practices for comparison. After comparing the two tables, the differences can be seen in the wholesale cost per unit and the cost of goods sold. Most competitors are using not so fresh ingredients while maintaining a higher wholesale cost. Rio Grande Foods is trying to do the opposite within a relevant range so that the company is making a suitable profit that is consistent with corporate objectives.
Required Pricing Modifications per Segment - The company needs to reduce the cost of goods sold through increased volumes and not through cheaper ingredients. Also, more funds need to be allocated to point of purchase advertisements, such as recipe books. Recipe books will present new ways to use Rio Grande Salsa Picante, which will increase the rate of consumption - increasing turn over.
Refined Messages - The niche of Rio Grande Foods is accented by its products' packaging that represents authenticity from the name to the graphic trade mark and label scheme complete with nutritional facts. There is also plenty of clear glass that allows for easy view of the sauces authentic texture and appearance. It "tells" the consumer that there is no need to eat out or to make they're own salsa, that home style texture and flavor can now be found in a jar at a valuable price that is not only good for my pocket book, but also for my health.
Optimal Promotional Mix - Targeting the consumer at his/her favorite events and bringing that appeal to them in the form of pure eating satisfaction at a price that will not be taking advantage of them. Formulating a memorable slogan that will remind the consumer of authenticity, value, quality, and satisfaction.
Tactical Product Objectives
Rio Grande Foods will continue to grow with the original product, because it has proven to be satisfactory since the beginning. The packaging and the ingredients help the company as it tries to reach its positioning objectives. Being that Rio Grande Foods is fighting guerrilla warfare tactics, it cannot not afford to launch another product because all of its resources are pushing the Mexican salsa in 1995.
Tactical objectives for channel distribution.
In 1995, Rio Grande Foods will continue to satisfy its current accounts while continuing to increase its consumer base/distribution. The company will keep servicing its present accounts the same reliable way it has been from the beginning. It will try to increase consumer awareness at the present stores by increasing shelf space. Some success has been seen at the J.E.B. grade "A" grocery stores where shelf space went from four-facings/two cases to eight-facings/four cases. The company will have to continue pushing the product through the marketing channels on a wholesale basis to the targeted segments. There is a great need to prove to the retail customers that the product does move and that it could do even better with increased exposure on the shelf.
Tactical objectives for physical distribution.
For 1995, the company will continue to service the grade "A" grocery stores through direct store delivery (DSD) methods. The specialty food stores and gift shops will continue to be supplied via UPS. The objective is to have a broad enough distribution to establish an account with UPS so that the $5.00 pick up fee can be eliminated, thus making distribution more cost effective. The company will have to continue pushing the product as explained above so that it can reach a level where an account with UPS can be established. If the company can establish approximately 35 separate accounts this goal can be met. The accounts will have to be staggered carefully for delivery according to demand so that a daily pick up will be possible.
Tactical Pricing Objectives
For 1995, the price on a wholesale basis will remain the same as it was in 1994 ($2.25/unit - $27.00/case). However, there will be price increases in the future years as seen in the situational analysis on table 2. The only thing the company hopes to do is increase volume so that the cost of goods sold can go down allowing more funds to be allocated to the promotional margin. These funds can be used to meet the marketing objectives.
Tactical objectives for advertising.
In 1995, advertising will equal $300.00 due to the low amount of money available. These funds will be used to make consumers notice Rio Grande brand salsa picante in the market place. Funds will be spent on print media only. The company must continue with steady growth of sales so that the margin allocated to advertising can generate the required funds to meet objectives.
Tactical objectives for sales promotions.
The company will continue approaching new customers on the retail level in hopes of meeting growth objectives so that all other factors discussed will fall into place. The company will do this by setting up appointments for presentations to grocery buyers. It is important to only target those consumers listed in its target segments - grade "A" grocery stores, specialty food stores, and gift shops. The company will also continue to sell itself and its product to its present customers in hopes of increasing shelf-facings and shelf-space in the same manner. The company will have to begin compiling a list of potential customers that can be screened for accuracy. Once the list has been narrowed down, the company can begin setting appointments on an efficient schedule so that it is not in conflict with other company operations.
The company will use allocated promotional funds to conduct samplings and to produce point of purchase advertisements, such as recipes, Samplings can be held on the weekends inside some of the busier stores, between 9:00 a.m. to 11:00 a.m. in the mornings and 4:00 p.m. to 9:00 p.m. in the evenings. At the same time the company can distribute recipes that require Rio Grande Salsa Picante as one of the ingredients. These new food ideas will help stimulate a more frequent use of the product thus increasing consumer consumption while causing the same effect all the way up to higher volume production runs. These recipes can also be used as a point of purchase marketing tool. They have proven more successful at the privately owned specialty food stores and gift shops, because the employees have more time to discuss the products and ideas to customers. This helps to answer any questions and make the customer aware of the recipes. This promotion proved to be successful at Toddie's in downtown Santa Fe, NM, where the recipes were placed on hooks directly below the product for better visibility to the consumer. The company will also offer occasional business to business promotional allowances to retailers in terms of lower wholesale costs. In order for these sales promotions to be feasible, the company will have to maintain sales growth as mentioned above.
On table 2, the cost of goods sold will be dropping steadily if growth of 9% per annum can be sustained after account growth has stabilized at the end of the second quarter in 1995 with revenues of $7,500. From that point onto 1998, the 4% inflation rate is taken into consideration along with the 9% annual growth rate, the result is what is seen on Table 2 in the appendices. The expenses margin will remain at 30% because as other expenses are reduced, the advertising margin will grow accordingly. These extra funds will help the company become more recognized through the use of print media as it tries to establish itself in the specialty foods industry as a "price" and "quality leader".
Rio grande foods fiscal year 1994-95.
Average Competitor's Price Fiscal Year 1994-95
Operational Budgets 1995-1998
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Fast Food Business Plan Template
Business Plan Outline
- Fast Food Business Plan Home
- 1. Executive Summary
- 2. Company Overview
- 3. Industry Analysis
- 4. Customer Analysis
- 5. Competitive Analysis
- 6. Marketing Plan
- 7. Operations Plan
- 8. Management Team
- 9. Financial Plan
The Fast Food Restaurants industry will continue to be one of the strongest U.S. industries, reaching $320 billion in the next five years.
The industry’s ability to provide convenient food at a low price will likely remain popular as consumers continue to seek affordable and convenient food options.
Fast food restaurants will benefit from a strong U.S. economy. The national unemployment rate is expected to decline while consumer sentiment is anticipated to strengthen. These trends are expected to bolster demand for the industry. Furthermore, consumer spending is estimated to increase at an annualized rate of 3.8%.
Additionally, fast food restaurants are expected to continue to expand menu options to cater to changing consumer preferences. Product innovation will likely play a large part in revenue growth moving forward.
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- Culinary Arts
How to Start Your Food Business: an 8-step Guide
Not sure how to start your food business? Find out what to consider, and how to make it happen with our practical 8-step guide.
Are you an aspiring restaurateur with a fresh new business idea, but not sure where to start? Well, it turns out that now might actually be a great time to take the plunge. Research shows that the food service industry is booming, and is set to reach $4.2 trillion with an annual CAGR of 3.6% by 2024 .
But the idea of starting up your own F&B business may seem daunting, especially when the outlook for start-ups is bleak. Research shows that as many as 90% of new restaurants fail. The silver lining is that 10% don’t.
So to help you get started, we’ve pulled together an 8-step beginner’s guide, with insider tips to give you every chance at success.
1. Make a solid Business Plan
The first thing you’ll want to do before making any investment is do your research, diligently. Spend a few weeks (or even months) getting a deeper understanding of the broader foodservice landscape, your customer target, latest trends and competitors, and start writing a business plan for your investors. Think of it as exploring your 4C’s: customer, consumer, channel and context.
For this, you’ll want to:
- Define your target market : Who is your new business targeting – baby boomers, gen X, gen Z, empty nesters, seniors? Once you’ve defined your target segment, make sure you understand what they buy, why they buy, where they buy from and what makes them tick. This will help you create a relevant, targeted offering.
- Define your USP : Find what sets you apart from the rest of the herd. Have a look at what your direct (and indirect) competitors are doing, and establish your point of competitive difference. Now here, it doesn’t’ have to be radical, but it does have to be relevant. For example, if you’re targeting young families, creating a child-friendly establishment with nutritious children’s meals could be enough to give you a leg up on the competition.
- Define your restaurant style : Are you thinking of opening a bakery, coffeeshop, quick-service, fast-casual or full-service dining restaurant? Each one of these channels requires their own unique approach, operating hours and investment, so make sure to pick one that suits you as an individual, and the work schedule that you’ll want to have.
- Select your food type/menu offering: Think carefully about your menu and the type of food you’ll want to offer – and do so early on in the process. Find out what the latest menu trends are (especially for your target market) and tailor your offering to them. Some of the hottest trends right now include: vegetarian/vegan diets, allergy-friendly & gluten-free menu options and sourcing your produce locally.
- Define your brand : Your branding – from your logo and the imagery you use, to the design of your menu, music you play and even and uniforms of your staff – define what your business is all about, and what you stand for. It sets the tone for your restaurant and lets your customers know what they can expect. Think carefully about how you want to position yourself and what you want your identity to be.
Once you have your business plan in place, go out into the world – and test it. Find some of your target customers and ask them for their thoughts and impressions. This could be as simple as polling a handful of people off the street to a full-blown market research study.
2. Secure your financing
Now it’s time to sort your finances. But not everyone who wants to start a restaurant has the personal funding to do so. In fact, most don’t.
Thankfully, there are lots of other ways that you can find funding for your new venture:
- Get a business loan
- Turn to family/friends
- Find outside investors or bring in a partner
- Use crowdfunding
- Get government aid
Just remember that it’s likely to take years before you turn your first profit, and money will be tight at first. So think about starting small (you can always scale up) and choose your business partners wisely, because they’ll be around for a good while.
3. Choose your location
You know what they say: “location, location, location”. Well, as it turns out, that’s not always the case. The location you choose for your establishment will depend on the a number of factors, and unless you’re relying heavily on foot-traffic, you don’t necessarily need to be in the hottest new retail location.
Here are a few factors you’ll want to consider :
- Cost : based on your sales and profit projections, what can you afford to spend on rent?
- Accessibility to potential customers : how are you customers getting to your restaurant, by foot, by car, by public transport?
- Restrictive ordinances : some neighborhoods have strict noise regulations or restrictions on the times when your suppliers can deliver your produce
- Proximity to other businesses : competitors and other businesses can influence your traffic, so map out what’s happening around you, and how it could affect your business
- Plans for the future : consider what the neighborhood will look like in 2, 5, 10 years, and if there are any major development projects underway that could change the local landscape
4. Design the layout of your space
Once you have the a venue, it’s time to start working on the layout and design your space.
Of course, this will depend on the type of establishment you’re running, but typically restaurants dedicate about 45-60% of their space to the dining area, about 35% to the kitchen area and the remainder to storage and office space.
Think carefully about the layout of your kitchen and dining areas, and make sure there’s a smooth flow between the two. Prep space is also critical, so make sure your chefs have enough room to plate, garnish and decorate their dishes.
And most importantly: don’t cut corners in your dining area. This is the stage of the show – literally where all of the magic happens – so finding the right ambiance and decor to make your customers feel welcome is critical to success.
5. Choose your suppliers
As a restaurateur, you’ll be working with a number of different suppliers – from furnishings to POS systems, bar equipment, kitchen appliances and of course, food. Make your wish list, scope out your short and long-term budget, and go on the hunt for your partners. But remember that while you don’t want to cut corners when it comes to quality, over-priced suppliers can minimize your margins and run your business into the ground. So make sure to negotiate, hard.
But where do you start looking? Try going to wholesale retailers, local farmer’s markets, F&B conventions, ask for recommendations from fellow restaurateurs or just do a simple Google search.
You’ll be looking for a trustworthy supplier, who has a good track record of providing quality products and rota of successful partnerships. For food suppliers, be sure to about their delivery schedules and food safety management practices. And go local – they usually offer fresher ingredients.
6. Get your licences and permits
When it comes to regulations, every country, county and city is different. But make sure that you check in with your local regulatory office, and consider getting legal counsel to make sure you adhere to all of your local health & safety codes and food regulations. Just know that some licenses can take months to acquire, so make sure to get started on this process well before opening day.
7. Start hiring your employees
First, think about what staff you need to hire for your restaurant type. Based on the scale of your restaurant, this may include: HR managers, purchasing experts, accountants, marketing & sales managers, chefs and sommeliers, waiters, hosts, bartenders and cleaning and dish-washing staff. Make sure to hire enough staff for each job, and anticipate shift planning and back-ups in case of illnesses and vacations.
Look for candidates with sufficient experience and a successful track-record, who are quick on their feet, can multi-task and are efficient. All of your employees should work well under pressure, and customer-facing staff should have exceptional social skills.
And when it comes to hiring staff, you can never be too careful – so do your due diligence. Make sure to do background checks, conduct several face-to-face interviews and call their references.
8. Advertise your business
Before opening your restaurant, you’ll want to do a fair amount of advertising to alert your local community that there’s a new eatery on the block.
And while word of mouth is still the best form of publicity, here are a few other ways you might like to consider announcing your new venture:
- Build a great website: make sure that it’s easy to navigate and includes all of the key information, including your opening times, menu, a booking engine and if/how you cater to special requests
- Use social media : create accounts on Facebook, Twitter, Linkedin and Instagram, and share relevant news and high-quality photos of your restaurant and the behind-the-scenes process as you’re getting ready for opening day
- Put an ad in the local newspaper (and online news platform)
- Host a soft opening : this is not only a great practice-run before opening day, but will also help create some buzz about your restaurant within your local community. Make the guest-list small, and consider having a soft opening for family & friends, followed by one for local businesses and partners.
- Offer promotions to new guests : offer a free drink or dessert for the first 10, 50 or 100 customers – you’ll be remembered for your hospitality and generosity. After all, who doesn’t love free stuff?
And with that, we leave you with one last tip for success: work hard, don’t give up, and be prepared to risk it all. Starting any new venture will be a challenge and most likely an uphill battle, but in the end, nothing tastes sweeter than victory.
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Too many food entrepreneurs get bogged down with traditional advice on the business plan process and lose sight of whether or not their idea is feasible.
When you are contemplating a tasty new specialty food or beverage product to build a business around, you want to get to the feasibility of your idea—meaning how successful it might be. Feasibility is the first step in your food entrepreneurial journey because not all ideas are opportunities. An idea is only an opportunity when the consumer sees your product on the shelf, and they try it for the first time, getting your product on the consumer's plate. The biggest hurdle is getting them back the second time and beyond, the term being Repeat Purchase, which is consumer loyalty or consumer preference.
The sooner you get from an idea to an idea that has been vetted as feasible, the sooner you get started, go back and try another idea, and of course, this process increases your chances for success. Enter the one-page business plan.
Building Your One Page Business Plan
The one-pager as it is called forces the budding food entrepreneur to think clearly about the business idea and has a framework that forces you to put the essentials on one page. The thinking behind this is if you can't get it to one page, you will not be able to clearly articulate your opportunity to other stakeholders such as business associates, potential investors and banks, and retail buyers. Here are the essential elements that go into your one-pager:
- One-Line Pitch
Customer problem, product/services, target market, sales/marketing strategy.
Rather than give you generic details regarding the essential elements, we have created a hypothetical company to show you how an o-pager is constructed. Here are a few notes:
- [YOUR COMPANY]. Fill in your company name or, if more appropriate, the brand name of the product(s) you will be selling.
- [XXXX]. It is a placeholder for you to fill in your product or company-specific information.
- Customer Problem. In marketing, we refer to opportunities as problems. A problem could be "fixing" something to make it better for your target customer OR on the positive side, a gap that you see that no one else is addressing.
- Note. You may not be able to complete each area of the plan on your first attempt. It is more important for you to get this first draft done as completely as possible before you spend more than a few dollars on your business.
One Page Business Plan Outline
One Line Pitch: Feel good about satisfying yourself and family from your freezer any time of the day from the recipes you love. Heart-healthy, delicious foods to achieve a sustainable lifestyle and [XXXX]! [YOUR COMPANY] brand focuses on [XXXX] meal solutions with the scalability of a modern, multi-market, e-commerce, and retail distribution business:
[YOUR COMPANY] provides a direct-to-consumer [XXXX] organic and natural single serve and family-sized portions. Customers enjoy [XXXX] products based on familiar comfort foods recipes, facilitates [WHAT DOES THE PRODUCT HELP THE CONSUMER WITH] with a wide range of products.
With [XXXX], we believe that the [YOUR COMPANY] Management team includes more consumer products food experience than any company in the plant-based protein segment. [YOUR COMPANY] has added general management strength with start-up partners such as [XXXX].
Health-conscious customers are seeking tasty and convenient affordable meal alternatives that are based on familiar comfort food recipes that are convenient, easy to prepare, have substantial health benefits, and [XXXX].
[YOUR COMPANY] makes good food simple and easy. In our markets, we are the premier delivery service for natural single serve and family-sized portions meals as well as other healthy and tasty staples like milk, eggs, meats, bread, and grains. We grow, select, deliver, and manufacture food with the highest level of integrity.
We currently serve three distinct markets: (1) Texas (2) Oklahoma and (3) Southern Arizona. With a total population of approximately 4.2 million and average household size of 2.59, these markets produce a total addressable market of approximately 1.6 million households. Assuming 19% of those homes are interested in organics, our targetable market is 307,000 households, and current market penetration is 3.9%.
We currently sell approximately 7,000 boxes of produce/groceries per week to about 12,000 active customers across all three regions.
In [YEAR]: (1) internal sales force drives geographic expansion (by adding new community drop sites), (2) direct marketing efforts to in-fill Seattle and Anchorage markets, and (3) increase average order size by adding grocery items. Starting in [YEAR], we will begin exporting the business to new markets. We plan to add one new market in [YEAR] and one per quarter thereafter.
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What to Include in a Business Plan for a Food Business
Starting a new business can be an incredibly exciting experience, but it also requires careful planning and preparation. If you’re hoping to start your own food-based business, having the right business plan is essential.
In this blog post, we’ll give you some ideas about what to include in a business plan for a food business, from developing detailed financial statements to exploring potential legal concerns. So without further ado, let’s start our journey toward launching your own successful food business!
Organization and Management
Organization and management strategies are important for any new company, including those in the food business. Business owners must consider staffing needs, operational procedures, financial planning, and customer service to ensure their business runs smoothly.
So, to help ensure success, it’s important to create an organizational structure suited for your type of business and assign personnel to the appropriate roles. This will help you keep everything organized and on track.
You won’t get too far with your new business if people don’t know anything about it. So, be sure to develop a comprehensive marketing plan to reach potential customers and build the business’s brand.
You’ll want to consider your food business’s goals, objectives, and strategies. And don’t forget to think about factors such as the target market, financials, and staff requirements to ensure success.
When thinking about your strategies, be sure to include where you’re planning on marketing your business. Will it be strictly online, or are you going to focus on more traditional marketing methods, like radio, TV, newspapers, etc.? Depending on your business, you may even want to do a mix!
Select an ideal location for the food business to maximize its exposure and accessibility to the target market. Consider factors such as foot traffic, nearby competition, and local laws to find a suitable location. And, perhaps most importantly, ensure it meets local zoning, health, and safety regulations
You’ll want to develop a recipe that appeals to the target market and is profitable. So, it’s a good idea to examine current trends in the food industry and create a menu tailored to the target market. Be sure to consider factors such as pricing and food costs to maximize profitability.
Your staffing plan should involve how to hire and train the right people to operate your food business effectively. So, work on a hiring strategy that allows for efficient onboarding of employees, as well as ongoing training opportunities that help employees to stay up-to-date on the changing trends in the food industry.
It’s important to consider factors such as experience, skill set, and personality when hiring to ensure a successful team. So, be sure to include this type of information in your plan.
Starting any kind of company can be an exciting yet daunting prospect. But when you write a business plan for a food business, you can set yourself up for success and build the foundation for an amazing food venture. With the tips presented here, you can create an actionable blueprint for success that will help you launch a successful and profitable food business of your own! Good luck!
Do you need a hand getting your food business off the ground? We’d be happy to help! Click here to book a free consultation with the greater goods today
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