Do the words 'all-day breakfast', 'bottomless coffee' and 'burgers and milkshakes' ring like music in your ears? If so, (and if you have a head for business), then you may have decided to launch your very own diner.
Before stocking up on retro, red leather-lined dining chairs and hiring waiting staff, however, it's important to think carefully about your business plan - because the success of your venture depends on it.
If you're not sure how to go about drafting up a business plan, then you've come to the right place. Simply read our guide below to make your diner business plan come to life.
Why a diner business plan is essential
The number one objective of a diner business plan is to ensure the financial viability of your venture. Before investing any money into your diner, you need to make sure that it will be profitable.
A diner business plan also enables you to examine your business in detail, evaluate the amount of funding needed to get it up and running, and assess its expected profitability.
A diner business plan will also be specifically requested by any bank or investor you decide to approach, so drafting one up is a mandatory step when it comes to securing financing.
Finally, a diner business plan serves as a roadmap for your diner's first three years of operation. As your diner moves through its first stages of operation, you can use the business plan to track whether it's flourishing as it should, by comparing the figures estimated in your initial forecasts.
What information should a diner business plan contain?
Market research is an essential prerequisite for the creation of any business plan.
It will not only enable you to understand the dynamics of the market you've chosen to enter, but it will also help you understand the expectations of your customers to ensure your offering the type of food and drink they're looking for.
Writing a diner business plan also enables you to keep track of the staff and equipment requirements of launching and operating a diner, as well as how much each investment will cost.
It's also within your diner business plan that you'll add up the costs associated with the stock, insurance, legal and accountancy fees, as well as your utility bills and rent.
To obtain the best rates and ensure you estimate these expenses as accurately as possible, get in touch with several professionals and ask them for quotes.
The financial forecast of a diner business plan
Now let's look at the financial part of your diner business plan. The financial forecast is composed of four tables, all of which have a specific function that we delve into below.
The projected profit and loss account
With this table, you'll have an overview of the expected turnover, growth, and profitability of your diner over the first 3 to 5 years of operation. This essential chart helps you identify potential opportunities to reduce costs and enables you to ensure the profitability of your diner.
The projected balance sheet
The projected balance sheet shows the value of the company's assets at a given time, and, in particular, the value of the assets (what the company owns) and liabilities (what the company owes to suppliers, lenders, etc).
The projected cash flow statement
With the help of a projected cash flow statement, you will see how much cash is generated in your diner business plan, where it comes from, and how it is used, whether it's to repay its loans or purchase a new fridge.
You'll also be able to see if you have enough cash to fulfil these obligations, or even if you might soon have enough money to expand your business by opening a few more diners.
The start-up capital
This section of your diner's financial forecast gives your bank or investor a quick overview of the resources needed to launch your business and their costs - as well as ways in which they'll be financed, including via equity contribution, shareholder loans and bank loans.
How does the editorial part of a diner business plan look?
Once the financial forecast of your diner has been set up, you have the opportunity to put these figures and estimations into context by tackling the written part of your diner business plan.
The editorial section of your diner business plan is just as important as the financial forecast because it presents each aspect of the business in detail and proves to investors that you've carefully considered the risks associated with it.
It can be broken down into 8 sections, which we've summarised below:
The executive summary
Think of this section as the equivalent of a cover letter for your diner business plan. The aim here is to introduce your project to investors in as engaging and concise a manner as possible, encouraging them to read on and learn more about your exciting venture.
In this part, you place a spotlight on the business's partners and their roles, as well as the distribution of the company's capital and the location of your diner.
The products and services offered by your diner
This section explains the products being sold by your diner.
It's within this section of the diner business plan that you'll present the results of the market research we mentioned at the beginning of this article. The objective here is to demonstrate that there is indeed a viable business opportunity for your diner to flourish.
Your business strategy
In this part, you'll reveal three key plans:
- Your sales strategy - the prices you'll set
- Your marketing strategy - the actions you'll take to attract customers and build customer loyalty
- Your risk management strategy - how you'll minimise the risks related to your business
From your employees to your relationship with suppliers, you'll detail the operational organisation of your business.
The financial plan of your diner
The financial plan of your diner business plan puts your numbers into tables that you'll be able to present to potential investors so they get a better idea as to your expected profitability and how much funding you need.
Our advice for creating a realistic diner business plan
The business plan for your diner will be your pillar throughout the preparation and launch of your business. It's an essential document that must not only anticipate all the questions that a potential investor might ask you during your meeting but also enable you to know the strengths of your business (as well as the risks associated with it) inside out.
We've listed several key areas of consideration below for you to pay special attention to when creating your diner business plan:
- The fluctuation of stock prices: the cost of ingredients (especially dairy products) change all the time, so it's important to monitor their prices and to anticipate any price fluctuations that are likely to have a considerable impact on your profit margin.
- Recruitment issues: in the hospitality business, the task of recruiting qualified and motivated members of staff can be particularly tricky, due to its high turnover rate. When creating your recruitment plan, take time to detail the exact skills and level of expertise you're looking for in each member of staff.
- Knowledge of the field: the launch of a diner should be based on excellent knowledge of the diner market and its customers. So don't just do a quick survey of the competition and the area, take the time to conduct thorough market research on industry trends and consumer habits.
- Double-check your information! Conducting market research means referring to several resources to inform yourself of sales figures within the diner market and emerging trends. You can turn to a wide range of professional bodies for this information, including the Office for National Statistics (UK), Eurostat (EU), or the Census Bureau (US), and the resources listed on UKHospitality. Whichever sources you use for data, double-check to ensure they can be trusted.
What tool should I use to write my business plan for a diner?
If you're not used to writing business plans, an excellent solution is to use online business plan software.
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by clicking here.
That's it for now, we hope this article has helped you better understand how to write a diner business plan. If you have any questions related to setting up your business, please do not hesitate to contact us.
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