The first key to starting a restaurant when you start with a dream is to come up with a solid plan. Sure, there are some businesses where you can just “wing it” when you launch the business, but a restaurant is definitely not one of them!
There are several reasons why you need to come up with a written plan along with financial projections to finance and start your restaurant. The first is that you will need to show a lot of people a written plan before you can move forward.
Not only will you need to show it to the bank (particularly an SBA lender), but many times the owner will also request to see your business plan. You will also definitely need a written plan if you intend to raise money from an investor or bring in a partner who will contribute cash to the business. In short, your written plan will be requested at least a dozen or more times between startup and launch, so having the best possible plan is critical.
However, it is important to have a plan beyond the money-raising aspect. Your plan must be able to demonstrate that opening the business will make financial sense, that it will produce enough profit to warrant the investment of time and money you will put into the business.
It turns out that a plan is also important for planning purposes. Your plan will tell you how much you can spend on decorations, furniture accessories, etc. and also how much to set aside to buy inventory, hire workers, and cover deposits on leases, utilities, etc. Without a plan, new business owners often end up falling short and jeopardizing the entire project.
The final consideration when putting together a plan is to make sure the concept and idea really make sense. You want to make sure there are enough people in the area who are interested in the business and are able and willing to come in and pay what you’re going to ask for the kinds of things you’re going to offer. Making sure the area can support what you want to do and having a well-researched plan is your proof to yourself and your financial backers that the business can really work.
It is much easier to get someone to invest in cold hard data than it is in vague ideas and vague statements about what “might” work.
While it is true that some businesses will fail even if they have a plan, it is also true that a business is much more likely to not even start if it has no plan at all. Therefore, if you really want to start your business, the first step is to build a plan that allows that dream to come true.
