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Hey guys, today's video is on how do you write a proper business plan for your restaurant. So many times when I open up my email, this is what people are asking for. How do you write a proper business plan? Do you have a template for it? Yes, I have a template. Make sure you guys stay until the end. I'm going to share the template with you on how to use this template to raise funds, to find partners, to have clarity on your business. But before we do that, we need to understand why is writing a business plan super, super important and essential for your success. The number one reason why you should have a business plan is for you to be able to raise funds. What I mean by that is you need to have a plan to show banks, you need to show government, you need to show investors, angel investors, this plan so then that way they would be able to see how you plan on succeeding in the next one year, three year, five, 10 years. Okay? This is why they need to always ask you for a business plan because they need to understand you, understand what you're talking about. The second reason why you should always have a business plan is so then that way you can attract the right partners in your business. A lot of people are looking for partners, they're looking for people who are talented, that hustles as much as they do, and they want someone to be able to share the workload with them. They're trying to look for a partner. They're trying to show them and communicate their own vision to their partners. But a lot of times it's very, very difficult to translate what you have in here, into your partner's eyes and for them to be able to see it, which is a reason why having a business plan that's super important for you to be able to attract the right partners. Lastly, it is to have clarity for your business. So many people get into business without writing a business plan and what does that do? It exposes them to what they don't know. What that means is that you would end up getting and hitting all these pitfalls, which can be avoided if only you planned for it, if only you watched this video and did the work. We talked about why we need a business plan and why it's essential for your success. Now we're going to be talking about how you're going to write that business plan so then now you can raise your funds, you can find the right partners ,and have clarity for your business. Let's dive right in. Hey guys, just a side note before we talk about the different elements. Everything that I'm sharing with you are just basic elements that is essential for your business plan. They are not, I repeat, they're not the only type of things that we want to consider. The terminology might be different depending on where you are, which country you're in, which is the reason why only use this as a reference and tailor it specifically to your area and your needs. Okay? The first element that you should definitely consider is concept. What I mean by concept is what concept are you trying to bring to the world? What concept are you trying to offer your customers? In this video, we talk about the four different types of concepts for your business. You should be able to identify the type of business and the type of concept that you're trying to bring to the world, and what problem it solves in the marketplace, and why you are the one that is going to solve this problem, why you are uniquely capable of solving this problem, and why your customers should be buying from you. This concept is super important and it should be only a page long and it cuts right to the chase because when your investors, when your partners are reading this, they only have I would say two or three minutes to be able to capture their attention. If your concept is like a 10 page long essay, they're not going to read it. It's going to be boring. You just need to identify where you see an opportunity, why you are suitable, and how are you going to be able to fulfill and close that gap. For example, if I were to rewrite the business plan for 720 Sweets, our ice cream shop, we would identify this as a fast-paced food concept. Something that requires minimal investment because we don't need structural changes. We don't need to install a hooded fan, which is something that a full scale restaurant would need. Ours is like a 500 square feet, small little place that requires minimal investment for it to be up and running. That itself may be suitable for one investor, might not be suitable for another investor because of the potential revenue that they can bring. Now to build on the concept, what problem am I trying to solve? Well, with 720 Sweets, we are located at an area that does not have a lot of novel place to hang out for younger adults, which is the reason why we created our shop in this particular area. Then that way, we can fulfill that gap. Why is it that we have the ability to solve this problem? It is because of my background from being able to travel across Asia, seeing different recipes and seeing different presentations, and bringing it back to Vancouver, bringing it back to this location to offer it to the world, to offer it to university kids who find this stuff very intriguing and find it very appealing for them to consume. This is what I would write if I were to redo this business plan. The second element that you need in your business plan is your sample menu. Your sample menu should consist of things that you propose to serve your customers. Why is that the case? Why is it that you're offering this specific item? What need does it fulfill? What cost does it take? How much are you planning to retail it for? You're going to build this whole menu out so then that way you have an idea and you can understand what type of offering that you're serving your customer and what needs you're fulfilling. By you doing that, you have a very clear idea whether this menu is going to work or not, because with this menu you can actually go out there and survey people that are around the block, survey whether this would fit their profile, survey whether this is something they need and this is something that they want. Then you can also include the cost of the item and how much you plan on retailing it for. Then that way, you can see what margins you can hit. In this video, we talk about the golden metrics, the golden metrics of how do you want to plan out your numbers. At the end of the day, it is super important for us to even propose a menu because without proposing a menu, we wouldn't know the numbers. We wouldn't know whether our customers want it. For 720 Sweets, our ice cream shop, we actually went out to survey people around our area three months before we opened. We actually asked them what kind of flavor they're looking for, we actually asked them how much they're spending, and we actually went around our neighborhood to see the different types of dessert shops and how much they're charging. In turn, we were able to put everything that we've learned and compiled it and put it into our proposed menu based upon the research that we have done in our neighborhood. If you're going to start up in a restaurant or food and beverage, you definitely need a sample menu. The third element that you need in your business plan is your management team. What I mean by that is what is the background of your management team, of your partners? Your banks, the people that you raise funds from, they would want to know what makes you guys different, what kind of resources you have, what are some of your backgrounds, which is the reason why you would need to identify your background specifically. For example, my partner, Tim, he is running one of the biggest wholesaler for bubble tea supplies in Western Canada. When we put his name down and we showed his background, it instantly adds credibility to the banks that we're raising funds from. Or if we were raising funds from angels or just venture capitalists, it becomes a really big selling point because we have a supplier who is part of our partner team, who is part of us. In turn, we know and people who are reading this knows that you have the background, and the ability, and the resources that a lot of other people don't have. For you, if you don't have much background, it is still okay and you still need to try your best to write down what is it that makes you different, what is it then it makes you have a competitive edge, and you're trying to wow them because the more they get wowed, the more money and the more chances that you're going to be approved before your loan or the more chances that you're going to be able to attract the right team and the right talent. Once again, for 720 Sweets, our background, I've been doing business for the last 10 years. I put that in there. I put all my awards in there as well because I want to be able to showcase and flex in front of them and show them that I know what I'm doing. I also put my partner, Tim, who has been running the biggest wholesaler in Western Canada, in there as well, which adds a lot of credibility to our investors, to the partners that we're trying to partner with. This itself acts as a really, really great positioning piece for your business. The fourth element that you need in your business plan is design. What I mean by design is because the whole point of creating this business plan is to be able to show your vision to the people and share this vision with the people you're raising funds from and the people that you want to join your team. The more that you're able to do that, the more they can see your vision, and the more money they're going to give you, the more chances they'll join your team, the more chances you're going to get your funding. That's why design is super, super important and you need to be super meticulous with your ability to be able to transfer what you have and what you see to these different types of people. If you have the ability and the resource to hire a drafting firm or interior design firm, they're going to be able to generate all these designs for you. They're going to talk to you about your vision. They're going to ask you what type of material you want to use, what kind of feeling you want to transpire, and what kind of experience you want to give your customers. In turn, they're going to be able to create renders of how it looks like inside. They're going to be able to create these different pictures and designs to showcase to you how it's going to look like and to bring your vision into reality. Now, not a lot of people have that ability, and some people actually don't have the ability and the budget to hire an internal designer, a drafter, which is the reason why you may want to consider resources like Upwork or Fiverr. These are online job, I guess contracting sites, which you can employ different types of talent to be able to do this for you. This is much more reasonable and much cheaper. However, you need to have much more control. You need to have much more coordination with these people to get out the renders, to get up the image that you want to portray. For us, 720 Sweets, this is the number one thing that we relied on when we're building out franchises, when we're selling franchises, is to create very, very beautiful designs to show our franchisees, to show our investors what potentially it can look like, the new place would be like. In turn, we're able to secure a few different resources and a few different rounds of fundings because we have amazing designs. You can check it out right here. Beautiful designs. The fifth element for your business plan is the target market. You need to be able to identify who is it specifically, that one person, you're trying to serve. You need to be able to profile them. Why is it that they want to shop from your place? What problem are you trying to solve? Are you trying to serve that 30-year-old that's hustling in their job and they're just trying to get something quick to go, and to eat, and something healthy? Well, if you're offering something that is going to take 40 minutes to make, that is unhealthy, that's difficult to eat on the go, then unfortunately that doesn't meet the criteria. That doesn't make that job and fulfill that job that needs to be done, which is the reason why you need to identify very, very specifically who is it that you're trying to serve. By you doing that, you can profile their needs. You can profile what they like, how old they are, what kind of income they have, what is it that they're trying to solve. By you doing that, you can now cater the whole experience and you're going to solve that one problem. A very, very big misconception is the fact that, "Hey, Wilson, what if I only offer everything to this one customer that you're talking to? Wouldn't I be cutting out the rest of the people?" The answer is no. Just because you're offering and catering your experience to this one demographic, that doesn't cut out everyone else. People will still consume from you. People will still understand what you're trying to offer. You're beating out the noise. People are seeing exactly you have clarity what you're trying to offer and people are able to see that because you have identified that one person you're trying to solve. You don't want to be vanilla in this trade. You want to be very, very specific. You want to solve that need. By you doing that, you can now stand out from the crowd and that's the reason why you need to identify your target demographics. For example, with 720 Sweets, I always, always say this with all my other videos, it is so important for us to identify our target demographic. For us at 720 Sweets, it is Michelle. We're serving Michelle. Michelle is an 18-year-old that goes to UVC, in university. She values the goodness of life. She loves social media, she loves experiencing the world, and she has a purpose to what she wants to do in life. Her disposable income is around 8,000 to $10,000, and she's in her second year of university. She loves experiencing food with her friends and she loves innovative items, trendy items. That's our target demographic. Exactly who I just profiled. By us doing that, we're actually able to attract a bunch of Michelles to purchase from us. In turn, we were able to gain a lot of tractions because we were so specific with the experience that we're trying to deliver. For your food and beverage concept, identify the target demographic. The next element of your business plan is the location. You have to identify the type of location that is the most suitable for your food concept. Why is that the case? There's a big difference with a destination location versus a high traffic location, and this is what I talk about that in this video. The difference in the two is the number of people that walk by and also the rent, which is something that you should definitely consider when choosing a location for your concept. A lot of people don't include this because they're like, "Hey, you know what? I'll just walk around and choose any type of location that fits, that has a lot of people." Well, unfortunately, in the real world out there, budget is always a constraint, which is a reason why we need to identify the location that is best suited for our offering. It could be something that is super accessible because of the fact that we're catering to high school kids or it could be a destination and only assessable by vehicle. If we choose those locations, then we know we're catering more towards the adult demographic, the more of the higher end demographic that drives, that doesn't take public transit. We need to identify the location of the type of crime rate. How much is crime that is happening around that area? Would it scare off our potential customers. The more specific that we can identify the location, the easier it is for the people that are reading it to understand the concept that you're trying to bring to the world. Because if it's confusing, then most likely you're not going to get your funding, most likely you're not getting get that partner. By you identifying specifically the location and the characteristics of this location, you have now been able to bring that vision one step closer to reality. That's the reason why, with 720 Sweets, we have chosen a location, which is 15 minutes away from the university by bus. On top of that, our location is actually right in front of a bus stop. Location is around 4 to 500 square feet, which makes it super affordable for rent. Around our area, there is a lot of food establishment but not a lot of dessert. That's the reason why we chose that location and we have identified specifically that location, even before we found that location. For your concept, make sure you're very specific with what you're looking for and put that into your business plan. The next element to consider in your business plan is a SWOT analysis. I know a lot of people talk about SWOT analysis, and it may seem like a cliche, however, it is super important for us to put the SWOT analysis now because we do not want to be blindsided. We don't want to have any exposure. What is SWOT analysis [inaudible 00:17:28]? SWOT analysis stands for strength, weakness, opportunity, and threats. Now, what do they mean? Well, strength wise, what is it that your company has strength over other people? Do you have a partner that is supplying ingredients to you, which ensures that your cost of goods sold are always at cost and super low? Or have you been studying the vegan industry for the last 10 years and you have this crazy recipe that no one has? These are your strengths that you have over your competitors. You need to identify that. Another example for weakness, what makes you weaker than other competitors? For example, you could be offering a vegan recipe to the world. However, is vegan super popular out in the marketplace? It might not be the mainstream item that people are ordering. That really limits your type of people that is attracted to your business. It limits your potential for revenue because your offering is also limited to a certain amount of customer demographic. Just because it is a weakness doesn't mean you shouldn't take that away from your plan. Your investors, your partners should know that you are living in the real world, that you understand what your weaknesses are. Just because you have weakness doesn't mean that you're weak. It just means that it's something to be aware of. Opportunity. What is an opportunity in the food market nowadays? Well, for example, if you're offering vegan, you can tell people and you can show people that, you know what? Consumption of vegan items are on the rise, on a rise like this. This also can become your opportunity because you are on the forefront of a trend that's picking up like crazy. That becomes an opportunity for what you're trying to offer. Threats. What are some of the threats? If you're in an industry that is going down, if you're offering like fatty foods that's super unhealthy, that becomes a threat in the marketplace because the trend is going towards healthy offerings. These are some of the items that you want to consider when you're creating your SWOT analysis. The more thorough and the more descriptive they are, the better because it shows your investors that you are very analytical and that you're considering the whole perspective and that you don't leave anything unturned. In turn, shows that you're much more sophisticated and it shows that you're much more prepared to handle what is to come. The next element to consider in your business plan is marketing. How do you plan on bringing your brand, your offering to the market? Do you plan on partnering up with food delivery services or do you plan on collaborating with different clubs and offering them discounts for them to bring in loads of people into your restaurant? Whatever your marketing plan is, you need have [inaudible 00:20:26] identify this plan so then that way, your investors and your partners would know how you're going to become successful. How do you plan on getting people through the doors? Are you going to be leaving brochures at office restaurants or office buildings all the time? Or are you going to be planning on running Facebook ads? What is your marketing plan? What specific things are you going to be doing to bring your business to the next level? For example, was 720 Sweets, a big, big, big part of our marketing comes down to collaboration because we understand that our target demographic, the Michelles, they're looking for something new all the time. They want to be the first ones to show their friends and tell their friends the latest trends, which is a reason why collaboration with new companies all the time allows them to tell their friends, allows them to show their friends all the good stuff that's happening, and in turn, allows our brand to be exposed to them over and over and over again. Some of the collaborations that we did, just the latest one, is with Nespresso. This became such a big talking point with our customers because this really hits into what they're needing, and our customers are wanting to share these things. This is a great marketing channel specifically for us. You need to understand and identify what types of marketing do you plan on doing to bring your restaurant to the next level. If you want to learn more about marketing, check out this video. We talk about the top 10 marketing hacks, tricks, and strategies that are timeless for your restaurant business. Make sure you guys check it out. Last but not least, this is something that is crucial for your success, and that's financials. Never ever leave this part out in your business plan. Something that is super important and something that shows your investors requirements that you know what you're talking about. Just because you don't know the financials, just because you don't know how your performance is going to be does not mean you shouldn't budget. It does not mean you shouldn't project. The more different line items you can account for, and the more you can actually project, the more thorough you are, the better it is for you to be able to raise funds, the easier it is for you to be able to justify that. Now, how do you even come up with numbers to project when you even haven't opened up your restaurant? Sometimes we can become very optimistic. Sometimes we're very pessimistic. Where will we be able to draw these numbers from? The answer is in the survey and doing your homework. Now, what do you mean by that? Well, if you are opening up a restaurant and you don't know any of the numbers, you don't know how it's going to perform, then go to your neighbor's restaurant, go to them and actually sit there with a clicker. Every time someone walks in, you click and you count how many people are walking in. Every time people order, see what they're offering, see what they are ordering, and jot down how much that item is. Jot down are they ordering a drink with it, are they ordering dessert? Now after you've done that multiple times, now you can get an average on how much revenue that this place is generating on an hourly basis. Go in morning, go at lunch, go during dinner, go during a weekday, go during a weekend. Now you have a very clear idea how they're performing on a weekly basis. Now from that, you can project that if and when you can perform as well as this company and as well as this restaurant, then your numbers would look like that. Use those projections into your own projections, and with that projection, you can now project how you're going to be doing in the first year, the next three years, and the next five years. Once again, this is a little projections. It does not mean that you need to have these numbers before you can project them. It is just imperative that you've done your research and not and your bankers aren't asking you, when your investors are asking you, how do you even come up with these numbers? How impressed with they be if you told them that you went to your competitor's restaurant and you sat there for a week just to get these numbers? They're going to be so impressed because You're willing to do your homework. you can actually give them something more accurate to base it off. They understand that these are not real numbers, but it shows them that you're willing to do your homework and you're willing to prove how this business would become successful when you've put everything in place. Now, the first part is about projection for your business. The second part is you need to consider what your starting costs is. You need to identify what you're purchasing. You need to identify the equipment that you're purchasing, your renovation costs, the design costs, the build out costs. You need to identify everything into this plan. Then that way, your people, your investors would know how much money you need and why is it that you're asking for 200K, why is it and how you plan on using this money. Well, you've identified what your startup cost is and they understand exactly where you're spending your money. You're going to have money for emergency fund, you're going to have money for equipment, you're going to have money for renovations. These are things that you're actually considering. The more you're considering, the more homework you're doing, the more it shows that you're actually doing homework. That's what the investors like. That's what partners like. Do your homework, do your financials, do your projections, do your startup costs. That's going to be able to allow you to raise funds, find partners, and have clarity in your own business. As a side note, if you're still super confused on how do you do projections, another resource is to ask your accountant for templates, ask your accountants on what are some of the costs to consider. If your accountants are not that helpful, then ask your peers, ask other entrepreneurs who are in the trade, and ask them how their numbers are looking like. This is how I was able to get a lot of insight, by asking different people, asking different professionals to allow me to gain all these insights to consider before diving into my business and before engaging the business. Now I'm going into this business with my eyes open. I'm not blindly swimming away, not knowing where I'm going. There you go. These are the elements you would want to consider when building out your business plan for your restaurant. It is super imperative for you to create this business plan. It is so important, not just because you want to raise funds with it, not just because you want to find partners with it, but it is so important for you to have clarity in how you want to build your business. Throughout this whole journey, it is so difficult and there's so many different moving parts. If you don't have anything to reference back to see what you envision and what you have planned out right from the beginning, you're going to get lost throughout the way and it's going to be very tough for you to backtrack, and you don't understand, and you won't know where you're going if you don't have a map, which is a reason why you need this business plan. You're going to have milestones. You're going to have identified what you're trying to create right from the get go. To have that clarity is going to be priceless for your own experience. Nonetheless, I really hope you've enjoyed this video. If you want to learn more about how to build a successful food and beverage restaurant, make sure you check out the link below because that's where I put everything that I've learnt in the last 10 years in this business all into a course and hopefully you're going to be able to find it useful. If you're not ready, completely fine as well. Smash the like button. Continue to subscribe for weekly videos and resources on how do you build a successful food and beverage restaurant. Until then, I'll see you next week.