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Lunch bill format for Planning

hey guys this is Kyle Fawcett from projection hub and today I'm going to show you how to create a business plan for a restaurant um now I'm not going to write you know 5000 words here in front of you but what I'm going to do is walk you through a simple outline of a business plan template um it's actually free the template's free um there's no catch you'll be able to download this template I'm going to show you um without any strings attached um because you know the business plan is only going to be as good as the information you put it in for your restaurant um so what I'm going to do is I'm going to walk you through the outline so you can see the the sections and the components that should exist in a business plan and then I'm going to highlight five key points um that are probably going to make or break you know how successful that business plan is particularly if you're thinking about you know getting a business loan for your like a startup or expanding a restaurant or opening a new location what are five things that lenders are really going to look for in that um so first of all who is projection hub we have helped more than 50 000 startups business owners Founders create Financial projections for their business plans loan applications fundraising pitch decks so you know I obviously that's a very important section of a business plan and so I'll talk a little bit about that also who am I I said my name is Kyle before my time at projection hub working with businesses on projections I was actually an SBA small business administration lender so I worked with small businesses and startups reviewed hundreds of business plans many many restaurants to help them put together a package to get approved or alone so so yeah I feel confident in helping you guide you through this now I'm not a restaurant tour I've never opened a restaurant I don't plan to open a restaurant but I've seen a lot of restaurant business plans and instilled this five key components I'm going to tell you transcend industry and are really going to be important to understand so one thing I'll mention is if you stick around at the end of the video um again this this template is free the business plan template is free if you do have a need for financial projections we have a financial projection template specifically for restaurants that will help you produce the performance statements that your business plan needs or that you will definitely need for if you're trying to get a loan and so at the end of the video I'll give you a promo code to get a discount on that template if you decide you need it if not still still stick around and kind of watch through the whole whole video here to learn about the five key tips to make your business plan as good as possible so um with that we will go ahead and jump in okay so why are business plans important um so there there's something important to know here and that is if it's a well-known industry like a restaurant it's not the most novel Concept in the world um the purpose of the business plan is not for you to educate who's reading the business plan on the opportunity of opening a restaurant they understand the the model um the industry it's not the first time they're going to have seen it um so really what you're trying to do is show them your plan to succeed you know prove that you you have a road map to success um and that's the purpose of this document now if you're making a business plan for a novel industry or a lesson industry then then your business plan does have that responsibility of educating on the opportunity as well as demonstrating your plan for Success um so I'm going to do a really quick um what we're going to do is just kind of scroll through this outline so you can see the the important components of the business plan and then as we cover the sections that I'll drill down in on those those five key components that you're really going to make sure you have included in your business plan all right so first you can see our table of contents here um your executive summing your business description which really you just want to focus on hitting the high points with your business name where it's going to be located or your restaurant name where's it located what are you going to be serving with the price point typical customer base um maybe you know what are the total startup ones you're going to need so really the high level points that you know you can fit on one page or less that's kind of like your cover letter um for an interview um and the business description will kind of just be you know an elaboration of that um market analysis marketing and sales strategy operations plan financial projection so we'll we'll look at each of those sections here um again this template is you're gonna have to put in work you know if you download this it's not like you just can hand that to your lender and then you're done you're going to fill this out with your information but it is very helpful to seek like an example use case um so you don't overdo it or underdo it um because contrary to popular it's a popular belief that many people think your business plan is as good as it is long and that is just not not the case um when I was a lender if a business plan was you know 40 pages 50 pages there's like oh goodness come on you know and we would skip to the sections that we knew would be important which are those kind of five key areas I'm going to talk about so if you need to write a really long business plan for your sake to really feel like you have covered your basis definitely go for it do that but what you deliver to you know a possible stakeholder or Like A lender make sure that it's like the most concise version of that and just hits the points they need to know so you know you're maybe looking at 10 15 pages especially for an industry like restaurant where you don't need to really describe that opportunity so first key point we're going to write here is within the market analysis so you know there's a lot of fancy things in here and a SWOT analysis which maybe you know that's really not all that important SWOT analysis kind of is the same across all restaurants um but what's important to do in this section is you need to identify that there is a market for your restaurant now we know restaurants are popular and people are going to continue out to eat but we're talking about your specific Market you need to provide some evidence that you've done some research that you think that there's an opportunity that your restaurant can succeed in the market that you're going to open it in so for example if I wanted to open a steakhouse restaurant I'm here in Indianapolis I want to make sure that one there's an ample group of people who we think are actively going to be dining out and two that there's not a oversaturation of steakhouses or even tons of restaurants and where I want to open up because you know steakhouses aren't only competing with steakhouses they're competing with other restaurants too so there's two ways you go about doing this one way could be more expensive more fancy you pay someone to do market research you buy a report on you know geographic demographic information you can definitely do that that's very common with franchises or you know second third fifth location type business models um but there's also free ways to do this so I'll show you for example here I'm looking at Google Keyword Planner this is a free tool now you have to create a Google AdWords account in order to be able to use this tool um but it is free and I am going to move my face out of the way here so you can first see I'm searching within Indianapolis Indiana Indiana and then what I want to know is how often are people searching for the phrases Steakhouse in Indianapolis or steakhouse near me located in Indianapolis so you can see um you know we're talking 3 000 people maybe more when you combine other long tail search you know keyword searches that might be the same thing we're talking more than 3 000 people a month searching for steakhouses near me now something I want to point out is um we didn't do this study but we referenced it in this blog that we wrote this article that we wrote that Google released some data and then the toast kind of you know wrote an article around that data that when someone searches restaurants near me um and where they're located they are 30 percent there's a 30 chance they're going to convert immediately 60 chance they're going to convert within an hour an 80 chance that they're going to you know eventually convert and go um dying at one of the places they searched so that's a very captive um Quality audience so that's one thing to know that's a really high search intent for this industry so that's a really promising thing to see the second thing I want to look at is okay so what's my competition look like again this is the type of thing where you can get more sophisticated reports to get exact numbers um but I'm just looking for steakhouses in Indianapolis okay so we can see downtown Indianapolis you've got a concentration of a few probably higher end and then around some of the suburbs around the city so I could see okay I probably don't want to open up one downtown unless I have a specific reason I know it's going to be successful it gives me you know an advantage I might be looking you know in a different area where there's maybe not another Steakhouse so I at least have that kind of carved out and then I might look at what other restaurants just in general around where I'd want to open mine um so this is the type of that's the type of basic um you know research you're going to want to demonstrate in your business plan to your lender so we'll keep going through this and let's come down to the marketing and sales strategy um now again your marketing strategy doesn't need to show something that no one's ever done before that's why your restaurant's gonna be successful you can if you've got a great idea feel free to include that um but what's most important in this section especially For A lender is to demonstrate how you're going to acquire your customers and that includes some numbers involved with that so customer active acquisition like you could demonstrate the same thing I just said we're gonna run Google ads maybe for our restaurant and here's some of the search volume here's a typical conversion rate on that search volume so we think we'll get x amount of of customers come down at our restaurant every month based on paid advertising so those are examples tangible examples of how you're going to acquire your customers um you know and actually demonstrate that rather than just saying we're going to open up a restaurant people will come because that's just not that's not going to cut it for your lender you need to have some some real examples that can actually prove that that's the case um so we'll keep scanning on through here again all these different sections you can include those especially for how that makes sense for you use this as a guide but that's the point you need to get to how are you going to acquire your customers and how many customers do you plan to acquire and is that realistic um coming down to the operations plan so legal entity structure your facility how you're going to operate your kitchen that kind of thing which again is important um but one of the key things that your lender is looking for in this section is do you or the team around you have the relevant experience to be successful in this industry so do you have experience running a restaurant or being a a cook on the line or do you have a partner in the business that has significant experience in the restaurant industry um that is something we would see all the time is people who were wanting to open up a business like maybe they had been a career marketing executive and then they decided man I'm really passionate about donuts and I'm going to open up a donut shop and maybe that sounds great um but then we want to know it's like okay well have you made donuts before have you sold those before have you worked on a shop before do you have someone on your team who's done that before so that's one thing we're going to be looking for and the second part of that is going to be do they realize the commitment that they are making so you know waking up and going to the office nine to five for 15 years as a marketing executive is a different Beast than showing up at 4am and baking donuts and then working a minimum wage job now you might even hopefully make more than minimum wage but that's the type of work that you're going to be doing and people don't always realize what they're signing up for before that they've actually experienced it or they have that experience so your lender is going to want to make sure that they have confidence that you know what you're doing and you're aware of what you're you're jumping into um okay so then we're going to keep going through here Financial projections is you know we're probably biased in this this degree but it's the most important part of the business plan and should be the longest section of your business plan um you know we've got sales charts we've got key financial ratios income statement summary full and then full five years of income statement cash flow statement balance sheet so again I mentioned we have a a restaurant specific template where it does all of this for you you know you put in kind of the numbers specific to your business it's going to help you calculate your restaurant based on your Revenue based on your menu your your costs of your employees your monthly expenses very simple to go through this and it's going to generate you know all of these numbers for you these nice financial statements um that your lender is going to require and again with all of our experience as being SBA lenders myself and our founder Adam these templates were built with that in mind so we know what the lender is looking for okay so the reason I show you that is because the most important things you want to cover in your financial projections are are your projections within the range of Industry industry standards um like have you checked like yeah these numbers make sense for a steakhouse in Indiana you know if you can get that specific um like what does total revenue look like is that realistic um profit margins are those percentages in line with industry standards um if not you know do you have a good reason for why they're higher why they're low um is the business cash flowing when will you be cash flow positive um lenders are really going to focus on your debt service coverage ratio they want to see that be 1.2 or higher which this template um you know will help you calculate those those things um the reason why they want 1.2 is you know they want to see that you have a dollar and 20 cents in free cash flow every year uh or sorry yeah and each year for every one dollar debt payments you don't have to have it all in one hand but your cash flow needs to be able to cover that to make sure you're gonna be able to make your loan payment um so those are some of the things you know you can do so maybe you're like well I don't know what an industry average is very simple Google search that you could look up typical profit margin for a steakhouse you know now net let's see that's two to six percent gross might be 38 to 42 so you can see you know as you're making your projections are you within line on those metrics you know in this in this example we would get there eventually so that's kind of important to know in your financial projections so let's go back okay and so the projections are going to round out you know the rest of this business plan template but the last thing I want to hit on the fifth key point is a demonstration of commitment or skin in the game is what A lender might call it typically they want to see that there's Mutual risk that you are sharing in the risk of this endeavor now their risk might be greater because they're putting in maybe a hundred thousand two hundred thousand five hundred thousand dollars your risk might look like a personal investment of cash it might look like collateral you might be putting up a car title a house um you know getting a second mortgage a deed something valuable um that you know would really would really hurt if you lost it they don't want to do that to cause you pain they want to do that to make sure that you're just as committed to this as they are and now you're going to see a theory that you're going to make it work another example would be is a lot of times when someone is starting a business they think that the best demonstration of commitment they can make is by quitting their full-time job which in some cases is necessary um in many cases it's a greater sign of commitment that you're gonna be willing to keep that income for as long as you can and work overtime to make the business happen that's a really that's a really selling point for a lender oftentimes um so that's what they want to see that fifth point is a demonstration of skin in the game and commitment to what you're doing um so there you have it those are the five key points um that are gonna be really important in your business plan get this this free template down in the description if you need help with financial projections for your restaurant grab the template um what we can do for you if you want us to do a free review you can do it right here too even if you didn't use our our template or our products we're happy to provide a free review of your projections give you some feedback um how we think it could be improved or blind stop blind spots potentially um but reach out to us at support projectionhub.com if you have any questions about your business plan or about your projections we'd be happy to help and as promised we do have a promo code you can grab um if you download this business plan template it'll be right there in there ph20bp I even linked to the template you had a 20 discount on the projection template and also we have a link to a video that that completely walks you through how to fill out that template um if you have questions so again thanks for sticking with me and I hope this helps foreign