“Luck is not a business model.” Anthony Bourdain
When embarking on a journey, the road can be filled with potholes and wrong turns, so having a map can ensure you stay on track and reach your destination with success and enjoyment. When that journey is taking you into the unknown, a map or blueprint can be what stands between success and failure. This blueprint is something that you’ll change many times over the course of your journey; it’s something you can come back to when you stray off course, and something that will remind you of the goals that you want to reach.
This week we’re going to look at putting together a document that will help you to run your foodie business. Remember, there are many ways to do it and no one way is better than another – as long as it works for you, then it’s right.
I’ve seen many business plans over the years: some have been written on drink coasters or napkins, and others are hundreds of pages long. Business plans only work if you’re honest about what you put in them and if the layout is something that you’re comfortable working with.
The benefits of putting together a business plan are many. One important factor is that it really maps out where you want to end up and how you’re going to get there. This is where you can be creative and start to bring together all aspects of your foodie dream. All your ideas and plans have been going around in your head for so long, it’s time to put them on paper and invite people along for the ride.
It also helps you stay on track and achieve goals and milestones that you have set. Things will get pretty hectic and crazy as you move towards the launch of your foodie business, you can go back to your business plan and check that you’re hitting the goals and milestones that you put in place when you first set out. If you’re not, then it will help you to get back on track and make sure you’re heading in the right direction, it will be the glue that holds everything together. It makes you accountable to make your business a success.
First of all, let’s start with the core business. This is the fun, creative part where you get to talk about the actual business and what you propose to do. You will do some research, and talk to family and friends, to make some of these important decisions. In the first part of this business plan, you need to start with the actual business details. What’s the name of the business? Have you registered it? Who are the registered owners of the business and what’s the ABN?
What type of food business do you want to open? This may sound fairly basic to you, as you know that your food business is about, however, we need to get all the information that’s in your head and put it on paper so other people understand what your business is about. Have you named the business? Do you have a brand logo? What type of food will you serve? What if you need to make changes to your initial ideas, are you strong enough to see when changes need to be made and, make the change for the benefit of the business?
Will you have a theme to your restaurant? Is it going to be Mexican, or Indian? Will your theme be your food – pies, or is it muffins? Are you a barista who loves their coffee? Is the coffee going to be the theme?
The next part of the business plan is talking about what you’re most passionate about, which is your food. Start here with your core product: outline what you love about it, what inspired you to make it, what it tastes like, the different versions of it and why you want to put it out into the world.
Be descriptive and include everything that you want in your business, because this is what you can come back to regarding other options like décor and design.
It’s also time to think about the menu, even though you may not have finalised it as yet, and think about the pricing you are going to have. If you have all this information contained in your business plan – your concept and menu – then it becomes much easier to start looking at the kitchen design and what equipment you will need to execute the menu. It also helps later on in the process when you need to choose what crockery and cutlery you need – big plates, coloured plates, whether you need bowls or cups, and so on.
Location is also to be considered in this first part of your business plan. If you know where the business is going to be located, put that information in. If you don’t, then put in possible locations that you’re looking at. It’s really exciting now that you are talking to estate agents about locations for your foodie business. Work out your main points of discussion. Are there rent-free periods, and if so how long it will be? What will the rent be once the rent-free period expires? In the quiet times, will they give you a rent reprieve? Will there be landlord contributions if setting up from scratch? Do you have an exit strategy in place, both for the business and the lease? You have one chance to do this – at the start.
Another benefit of putting together a business plan is that it highlights any competition or hurdles that may come your way as you set up the business. Although you want to focus mainly on what you’re doing and not what everyone else is doing, it’s really important to know who your competition is, where they are and what sort of customers they’re attracting. You can then change things in your business to make you unique and ensure that you’re attracting your demographic customer.
Who is who in the zoo?
Are you going to do it alone? At the moment, you want to do it all by yourself, but while going through this process of putting a plan in place, you might discover that you need people to help you along the way with as much passion as you to get to the launch of your foodie business.
Both the business set-up and what sort of food you’re serving will dictate how many workers you need. Consider whether your staff will be giving table service or whether
your customers will come to the counter to order meals. This will impact on not only how many staff you need, but also the layout of the countertop to allow room for POS systems, menus and an EFTPOS machine. Will meals be delivered to the customer at their table or will they have buzzers to return to the counter to get their meals?
It helps to outline the ownership and management roles in the business at this stage – especially if you have a business partner, so you both know exactly what your role in the business is going to be. When you have a business partner involved, ensure everyone is on
the same page. So often I’ve seen business partners get to launch date, opening to a great fanfare with everything running smoothly, and all of a sudden one of the partners is going one direction and the other partner is going in the opposite direction. You need to be on the same page, right from the start; if one of you goes off track, then come back to the business plan.
If you’re going to join someone who already has an existing business, make sure you do your due diligence. This means making sure that you see everything to do with that business: sales reports, income, expenses, suppliers, etc., so you get an honest and accurate picture of the business at that moment in time. To protect yourself, have something drawn up by your solicitor that makes you only liable for things after you start with the business, and nothing that is previously owing by the original owner.
The next section of the business plan is your insurances, including contents insurance if you get broken into and things are stolen and public liability if someone trips over a step and injures themselves. It will also include fire insurance and building insurance, so build your knowledge with someone who has experience in the hospitality industry – if you speak to a general insurance broker they may not be aware of some of the ‘must haves’ for a foodie business. Other things that you need to think about in this part of your business
plan are licences and regulations that are relevant to your plans, and what certificates you and your staff might need. Risk management also needs to be front of mind when putting policies in place. Think about what you need in order to minimise your risk in the business, like work health and safety, social media and discrimination policies.
We then step into the marketing side of the business plan to look at your customers, your target market and who they might be. This section starts with some research to discover who your customers are, what they want and how to market to them. Will print media be better than social media for your target demographic? Or vice versa? How will you maintain a good relationship with your customers and what techniques will you use? How will you keep your customers coming back?
Let’s look at the final piece of the puzzle, which is the future and your finances. People get scared by finances, but it’s really important to put things on paper so you know exactly how much money you’ve got, where it’s coming from and what you’re going to use it for. It helps to map out what costs are involved, so think about your budget. Do you have a budget in mind for what you want to do? You may have no idea what you need, so this process of putting everything down on paper will help you to work that out.
Remember: there will always be things that you didn’t plan for, that will cause time delays and will cost you more money. Ensure when setting out your budget that you give yourself a buffer and be honest about how much things are going to cost. It’s better to over-budget than under-budget.
An important document to set up in the early stages is your start-up costs for the year, work out what your break-even point is, and fill out a feasibility table or chart, it’s a really good exercise to see whether you need to change any of your forecasts to make sure that you’re getting over that break-even point.
You have started to put together your business plan, including a budget and feasibility chart, so the next thing that you need to do is to put an action plan in place. This will cover the business milestones that you expect to reach over the next few months, including finding a premises and finishing your business plan, working out who is responsible for them and a completion date.
Remember that business plans come in all shapes and sizes. Keep in mind that if you plan to use your business plan to encourage partners to join or invest money, or to present to the bank to borrow money, then it will have to be a fairly comprehensive document.
If you’re not sure of how to write a business plan, or would like some more detailed information head to the Foodie Dream website to get a copy of my book, or contact me for more information.
Next week I will look in more detail at your finances and how to put together a great finance plan.