Realizing your dream of opening a bar, restaurant or retail business comes with many steps. First, there’s writing and pitching the business plan and then sourcing capital from investors or securing financing through a small business loan. How you intend to market your business and stand out from the competition requires a marketing plan and that’s all before you secure permits and licenses, purchase equipment, and hire and train staff. It seems like a long uphill battle, but in the end, running a successful food and beverage business contributes to your local economy and its culture and brings together the community at large. This resource from Provi will help guide you through the process of opening a bar, restaurant or retail establishment and provide you with tips and tricks along the way.
Planning a food, beverage and retail business takes just that: lots of planning. A business plan is a living document that will guide you, your partners and potential investors on the path from a dream to a reality. Let’s look at the elements that make up a powerful business plan.
To get on the fast track to writing a business plan, download our in-depth, step-by-step guide on How To Write a Bar, Restaurant or Retail Shop Business Plan
The executive summary is essentially a thesis for your business, providing an overview of the restaurant and its business model.
Topics to include in the executive summary
After the executive summary, highlight your opening team (partners, executive chef, general manager, head bartender, buyer/curator, etc.) to put faces to names and their roles within the organization. Be sure to include 2-3 sentences under each profile explaining their role and why they are best qualified for the position.
In the Business Overview section of your business plan, you will need to provide a high-level rundown of your business’s mission, the type of cuisine you plan to serve (if you’re a restaurant), or the concept or beverage direction (if you’re a bar or retail shop) that you’ll focus on.
What to include in the business overview section
In this section, you’ll identify key findings from industry research as they relate to your business concept. Additionally, this is where you will also identify the on- or off-premise location of the business as well as your target market. This section is a critical element of the business plan and will prove the future viability of your business to investors.
Elements to include and expand on in this section
In this section, detail how you intend to drive your target customer through your doors. What marketing strategies will you implement both online and offline to grow your business?
Elements to highlight in your marketing strategy include
Foster brand loyalty and drive more guests through your doors with our free Bar and Restaurant Marketing Plan guide.
In the operations section of your bar, restaurant or retail shop business plan, you’ll need to define your business’s service model. List the equipment, supplies and employees needed for day-to-day operations, the technologies and services that assist and streamline back-of-house tasks and highlight staffing and benefits details.
Elements to include in the operations section include
Now to the meat of it. You’ve built a strong visual of your business concept, mission, and vision and presented a solid case for how and why you’ll stand out. Now, you’ll need to prove how you plan to be profitable.
Elements to cover in the financial overview and projections section include
The appendix should include all referenced analyses and supporting documents for your business plan.
There’s no way around it, starting a business costs money. There’s property rent, permits and licensing fees, operational costs, equipment upkeep, supplier and distributor costs and payroll for staff to name a few. Securing capital ensures your business is set up for success in the short and long term. Let’s look at common ways to source capital for your bar, restaurant or retail business.
Small businesses can apply for a Small Business Administration Loan through the United States Government. These loans reduce lending risk and enable easier access to capital. Benefits of an SBA Loan include:
A merchant cash advance (MCA) provides alternative financing to a traditional small-business loan. With an MCA, a company provides upfront capital that a business repays through a percentage of debit and credit card sales, plus a fee. There are pros and cons to an MCA. They are best for existing small businesses that need capital immediately to cover cash-flow shortages or short-term expenses. However, this type of financing can carry annual percentage rates in the triple digits and create a difficult cycle of debt.
One way to fund a small business is through crowdfunding. Crowdfunding is a way for small businesses to raise money in exchange for equity, rewards or debt. Online platforms like Kickstarter, GoFundMe and SeedInvest all offer a way to source capital through individual investors. If you take the crowdfunding route, there are several things to consider.
Many investors out there focus solely on food and beverage businesses and startups. Why? They love the industry and know a good idea when they see one. Sourcing a group of food and beverage investors is a common way to fund a business and comes with many benefits. Seasoned f&b investors know how to start and oversee a successful new business. They can help guide you through the startup process and help make important decisions for the health of your business. Alternatively, it’s important to understand their endgame. Are they interested in the long-term success of your business? Or are they looking to make a quick dollar? These questions along with how much equity they hold are important to consider when venturing down this financing path.
Last, it’s always possible to source startup funds from those closest to you. Friends and family are interested in not only your business’s success but your own. They want to see you succeed and if they can help be a part of that, then they will invest in that success. While this may not bring a large upfront source of capital, it can help get the business off the ground while you source additional funding for longevity. Keep in mind how you intend to reward these investors. Is it stock options? Equity? Free meals for life? These are details you will need to finalize before pitching your plan.
Whether your new business is taking over an existing space or building from the ground up, you’ll need to secure certain permits and licenses before you can operate. Here’s a list of 10 essential permits and licenses a food, beverage or retail shop may need to obtain depending on the concept type and/or local city or state regulations.
The next phase in opening a bar or restaurant is building out your menus. If you’re opening a retail establishment, this is where you’ll focus on curating your product selection.
Discover more about getting your drinks to look perfect on paper and download the Ultimate Guide to Building a Better Cocktail Menu
In the early stages of developing your bar or restaurant business, you identified your cuisine type and gained an idea of what your menu(s) will look like. In this stage of your business, you’ll need to fully develop recipes for your menu items keeping in mind your overall concept type and target audience. There are a few things to consider when finalizing your menu(s).
A flavor matrix can help identify gaps when developing a menu. If you have too many menu items in one quadrant, your menu becomes unbalanced and you risk alienating potential customer preferences.
Engineering your menu for profitability helps identify which menu items to highlight based on their profitability and popularity. The matrix is divided into four quadrants: Stars, Plow Horses, Puzzles, and Dogs.
Patrons are out to have a good time and your menu should give them plenty of options to choose from, but that doesn't mean you are completely without control when guiding their experience (and their wallet). There have been many studies on the psychology of menu design and how owners can tailor their menus to improve profits. Consider the following when designing your menu.
Whether you focus on specialty wine and spirits or solely on craft beer, in this phase of opening your business, you’ll need to seal the deal on your overall concept and direction keeping in mind your target audience. For example, if your target audience is craft beer enthusiasts, you’d put your business at a disadvantage by trying to appeal to domestic beer drinkers. This is where carefully curating your product offerings comes into play.
Hiring and training staff is one of the final stages of the opening process. There are many elements to consider when interviewing candidates for open positions. But before you can decide on the right person for a role, you’ll need to attract them first. Here are a few tips to help you attract applicants:
Once you’ve hired a stellar opening crew, it’s time to train them. While there will inevitably be different experience levels and expectations among staff, getting everyone up to speed on how you intend to operate is important. Here are a few things to consider when training your opening team:
Your dream is now a reality. You’ve set out on the path to open your long-anticipated bar or restaurant. But your potential investors, whether they’re a financial institution or group of individuals, are curious about how you plan to stand out against stiff market competition. What sets your business apart from the rest? That’s where a robust marketing plan can help translate your business idea to investors to secure funding.
Successful marketing plans cover your brand and brand positioning, define your target market, and detail how your business will attract customers and the marketing initiatives and channels you’ll use to establish a foothold in the market. This guide aims to help you convince both yourself and your investors that you can build an established brand that is prime for growth and a long, successful future.
This section serves as your chance to wax poetic about your new bar or restaurant! Establish your target market and customer base, highlight your position in the market and include how you intend to stand out from your competitors.
Elements to include in the branding and positioning section include
Now that you’ve introduced your new bar or restaurant brand, and established its target market, marketing positioning and creative assets, it’s time to define your digital marketing strategy. In short, this is how you intend to create brand awareness, drive foot traffic and grow your audience and customer base using online digital marketing tools and channels.
Highlight your digital and traditional marketing strategies in this section
Your marketing strategy must include a timeline to track and manage all marketing initiatives. This section should include what always-on marketing campaigns will be marketed, as well as one-off campaigns such as tap takeovers or holiday initiatives.
Your marketing strategy will need a budget. This section will highlight the total cost of your marketing initiatives with specific reference to vendors and channels of distribution and expected return on investment, if applicable.
At this point, opening day is in sight. Congratulations! There are only a few more steps before your doors are open and guests are filling seats or stocking up on delicious wine, beer and spirits. Your opening staff is trained and well-equipped to handle the busy days and nights to come. Your equipment is cleaned and ready for use. You’re fully stocked up on inventory and supplies. And you’ve spent the last few weeks aggressively marketing your new business across your digital channels and setting up your Google My Business account so new guests can easily find you. All that’s left to do is turn on the lights and unlock the door. Cheers!