Writing a business plan for food small business Examples of what to write

(upbeat music) – [Damian] It is Damian. I’m here in our shop getting
ready to close up the day. And I wanted to cover
really quick and get into the different sections
of the business plan and how to effectively write one. Or if you’re gonna have
someone write one for you, understand the different sections
in the bits of information that will create a really
succesful business plan if you plan on going to
a bank to get a loan, if you’re looking to have
someone invest in your business, or if you’re looking to
sit down and kind of create a vision for your food
business, no matter the type of food business that it
is, I highly recommend that you take the time to do this. It is not something,
to be honest with you, that you’re gonna sit down in
about an hour and brainstorm and have it completely done. It’ll take some time for
you to really effectively come up with all of the information that will definitely give you an advantage if you sit down in front of a bank or in front of an investor
and you’re looking for money to grow the business. Now really quick tidbit of information, the video I posted beforehand, I heard from quite a few of you that you were looking for some more information about the business plan, the outline, what is the content, not necessarily having someone write one for you but what does the business
plan really include? So for any of you that saw
that and you gave that comment, thank you for letting me know. I’ve actually turned around,
and wanted to do this video to kind of clarify the information that goes into the business plan and then you could take a step forward to get some assistance
in writing it, okay? Now number one, when I
first started my business to be a 100% frank and honest with you, my wife and I, we did not
create a business plan because I didn’t understand the importance of it at the time. I had just simply wanted
open up a business and jump right into it. Would I have written one, and kinda thought about it beforehand? Probably, but I had never been the person to actually double guess or
second guess my decision-making. I pretty make a decision,
what I do when I do it. And if it pans out well, that’s great. If it doesn’t the way I think it should, then I kinda learn from
those and then just move on. So I don’t really draw on that or anything but since then I’ve written one. I’ve come up with some great information and it helps me guide,
the vision and the goals that I have for our business. And it’s been a huge help. So if it’s not necessarily a document that you’re going to make to get a loan or get some type of
investor, it’s still gonna be a good document for you
to have for yourself, and of course for your business. Now business plans, I’m gonna get into the different sections and I’m gonna break it down
and explain what they are. This is plans, the way they’re structured, are relatively the same
for any type of business. But the content inside
of it is going to be probably completely different. For instance, if you’re
starting a food truck, your information’s obviously
going to be, in your goals, and maybe even the amount
of money you’re looking for, all of that content inside
of the business plan, obviously will be different
if you’re opening a bakery, or if a cafe. So when I say that the structure of it, there is a certain
organization that comes to plain out the business plan
itself, but then again, once you get into those
different categories, the information, specific
information is gonna be different. Okay so I’ll give you an
outline, I’ve got some notes here that I just pulled up from my computer from the one that I did. So I’m gonna cover them. I actually have eight sections, eight different parts
to the a business plan. There’ll be a lot of
people who will tell you, hey, I know I had the one page. There’s this thing going around about a one page business plan. You know what, if that
works for you, that’s fine. Everybody has a different view point, and everybody has a different take on their own business plan. Some people may omit or keep out some of the information I’m
gonna cover with you now from my notes here on my laptop. But then some people may say,
you know, eight sections, these eight specific
topics are not enough. You have to have this is. So I’m gonna give you my
opinion about what would be make up the best tidbits of information that you need to have. And of course you need to
basically fine tune that to whatever type of business you have. So if you’re starting from home, and you have a home-based business, obviously your goals, and the things that you’re going to
have set in front of you are gonna be different,
if you’re looking to start a retail candy shop, okay, if you’re gonna have a food truck. Or maybe you’re just gonna
have a vending service where you’re gonna have a portable vending machines that you go to different events and you maybe hotdog, maybe
it’s a free-standing hamburger, or maybe you’re serving ice cream. All of those things
are gonna be different. But the types of information
you need to put together are gonna be relatively the same. So number one, it’s the executive summary. Now the executive summary is
going to go in the opening, the beginning of your business plan. What it’s going to encompass
is a general overview of what you’re looking
to do for your business. Where are you looking to take it? Let me show you some of the
notes that I’ve got here. So for instance, I’m
gonna use as an example when we opened our cafe,
as kind of a restaurant. I’m gonna use some of this
information as a sampling for what you may put in yours, okay. So if you’re looking to have like let’s say you have a restaurant. Now you’re gonna go into
a certain neighborhood. You’re gonna go to a certain
area, probably preferably where you are, where you live. And what you wanna do
is you want to encompass in this executive summary,
who is your competition? Have you checked around in the area for the type of food you have. Do you understand that clientele
that you have in your area? Who are gonna be your customers? Give a basic understanding of how are you going to attract them. What are some of the marketing ideas that you’ve got in place. How are you gonna advertise? What is your objective as far
as starting it and growing it if you open, let’s say there’s like, you’re gonna open a Mexican restaurant, and you have a fantastic line up of Mexican food that you want. But there’s like seven or eight other Mexican restaurants in your area. Would it make sense for
you to open up yours? If you do, then have you
identified what’s gonna separate your restaurant from
the other six or seven that are selling very
similar foods in your area. If you wanted to set up a bakery, well then you would do that too. You would research the
bakeries that are in your area. What type of baked goods are they selling? Maybe you wanna open a bakery
that has specific types of baked goods and breads
and pastries and cookies, and there’s four or five other bakeries but they don’t sell the type of food that you’re looking that you wanna sell. That would be an advantage for you because you’re selling
and creating something that’s not already there. So the clientele would be there because they’re probably
looking for something new. So you wanna do a little
bit of research, you wanna check into it and you wanna
encompass this information. You wanna have about two
to three pages on average. I probably wouldn’t go
more than three pages, but two to three pages of information, kind of covering the gist of
all of what you plan on doing, who’s gonna be doing it, everything that you can to
bring together the information about what it is you really want to do. Knowing the demographic,
knowing the people in the area, knowing the area that you’re
in if it even would merit having that type of a business. So you gotta do just a little
bit of research, of course, and look into some of
these things prior to even establishing your
vision and your goal because if you’re opening a
brick and mortar location, again, that is a different
type of information. If you wanted to sell baked goods online, well then you would wanna
research online businesses that are selling baked
goods similar to yours. Okay but if you had a physical location that you’re gonna be
operating from, just that, not through the computer,
not being online, so then you would look locally. If you were doing a business
online, you would go online and check out other websites. So that’s the kind of information you want to start with. Yeah so next up you would
have what would be known as your company’s description, basically a description
about the company itself. All of the owners, their experience with this type of food business,
you wanna have a address. Where is it that you’re
gonna be setting up? Taking a look at some of my notes here. So you wanna provide also the legal names, legal description, if
you’re doing a business as a certain legal name. You wanna make sure that’s in there. Any information such
as contact information, if you got other owners or
people who are investors, every person or every one who is financially involved with it, you also wanna kinda
bring up who they are, what experience do they have, a little bit of background on who it is. So if you’re going to sit
in front of an investor, they’re gonna know that the
people who are running it, maybe he’s had his 20 or 30
years in the restaurant business and now he wants to open his own. Maybe the half of the
owners that have been in it are retired from the restaurant business, but they want to just invest money in it. But they’re gonna be, they’re
gonna be stakeholders. They’re gonna have a portion of a financial interest as well. So the people that are involved
with the company itself, and some of the legalities,
some of the legal information that needs to be on these applications need to be on the company
description section. So you wanna make sure you
have that in there as well. So you might be thinking to yourself, you know what David,
I’m just starting out. I don’t have that information. Well you do have some of it. If you’re not necessarily, again
if you’re working from home like I mentioned in the opening, the information you put in here
will be slightly different. So you’re not necessarily
opening a restaurant per se, that has a physical location. You’re looking to start from home, and you’re gonna start with just yourself. That’s perfectly fine. Then you need to put
information about yourself. How many years of
experience you might have in the food business? Have you done this before? Are you a sole proprietorship? Do you have a husband, or
maybe your wife’s involved or maybe you’re involved. So you wanna bring out
all of that information and have it on there as well. Again, you don’t wanna get too lengthy. You’re not writing a book or a thesis. So you don’t wanna go too deep into it because the other thing is is that the more concise the information
is, and to the point, the better off that the
business plan will look as well as the more
professional it would look. Now one thing is, I mentioned in my video before the one I posted before this one, was in regards to having
someone write it for you. So they’re going to basically ask you all of this information but they’re gonna have the ability to write it in a way that’s very fluid, and it’s very smooth,
and it consists of all of the necessary information that’s needed in order for you to make
a really good impression on that investor or the banker who’s gonna give you the loan. So next up, you’ve got the
organization in management. So, what you wanna include
in this is going to be everyone who has any type of a job or occupation within restaurant. Anywhere from restaurant
managers, to the owners, to the waiters, to the cooks, everyone that’s gonna be a part of it, and what exactly is the responsibility. What type of equipment are gonna be needed for the organization or for the restaurant to operate properly. Everything from deep
fryers to walk-in coolers, if you’ve got freezers, prep tables, everything and everyone, all
the stuff and all the equipment that would make the restaurant work. Even as far as how many
tables you’re gonna have, how many stools you
need, all of that stuff needs to be broken down
so that information can be conveyed again, to the person that you’re presenting this to, and even just for
yourself so you understand if you got a 2500 square foot restaurant, how many tables do you need? How many waiters are you gonna need? How many cooks are you
gonna have in there? How man managers do you have? Explain their job duties
and responsibilities. So this is the biggest part,
the biggest chunk, if you will, of information that’s gonna
explain how the organization or how the restaurant, as this example is, how the restaurant is going
to operate with those people and the type of equipment and the things that are gonna be needed. The tangible things
that are gonna be needed to get the restaurant up and running. Management, again, how many are you gonna have to have on shift. What is their salaries? What are you projecting to pay everybody? How is your pay scale gonna be set up? All of that information
too, would be in line with the different types of
job responsibilities and the different jobs that
these people will have. So again, that’s gonna be, you’ll have a better understanding
of what you’re gonna need going forward and as well
as what you’re going to need to present to an investor or to a bank if they’re look to give you a 100,000 or $200,000 loan or more,
they’re gonna need to know every aspect before they say yes or no. So not that again, not
that you wanna keep this into something that’s gonna
be four or five pages, but this section is gonna
be a little bit more heavier as far as the amount of information that’s gonna be needed
because they’re going to need to understand every facet of the people and how much money am
I gonna be giving you for tables and spoons
and napkins and shelves, everything that you would
need to get it up and running. So you would need to have
that type of understanding. You need to kinda have an understanding of all of those things prior
to creating this section because it’s got quite
a bit of information. Okay so the next up, next
section of your business plan, sorry about that, okay would
need to be a market analysis. Now I touched a little bit
on this in the beginning. And the market analysis
means that you need to know within your area, within
your neighborhood, within your city or county, you
need to do a little research and find out about the
different types of restaurants, as I mentioned before, that
may have similar types of food. What is exactly is your target market? So who are gonna be the
customers that are gonna be coming in that you’re looking for? You can literally separate
them by demographic. You can do financial
earnings if you’re looking. And maybe if you have
a high-end restaurant, and you’re seeking to
find high-end clientele. If you’re looking for something
that’s more of a fast food, family-oriented, you wanna
understand what it is you’re actually getting yourself into with the type of food
you’re selling or preparing and who is gonna be the
one to buy that, okay. Because in a lot of cases,
if you’re looking at really high-end, five star,
Michelin Award restaurants, those are really in a high
class, or high economic areas, where there’s a high income. As opposed to just a fast food,
and there’s nothing to say and there’s nothing wrong with fast food. But understanding that the type
of clientele that you have, you don’t wanna kind of out price yourself in a situation where
you’re selling something that’s very very expensive, and the clientele’s just not there. Other thing is, a part
of the market analysis is double checking to see how are you going to attract those customers? When I say that is, are
you going to advertise in the newspapers? Are you going to do Facebook
ads, maybe in the community to attract people and
get people to notice you? Are you gonna going to events locally to do charitable work
and those type of things where you can get out in the community and make yourself visible so
people know that you’re there. There’s actually here, let
me think the name of it. There’s a ice cream
place, here where I live that is in like every
single community event. I have my dad actually
volunteers for a men’s club, locally here, and they do
a lot of charitable events. This ice cream, local ice
cream family-run shop, is there all the time. And it’s great because they
give out tons of ice cream, and they give out a lot
of coupons and such, which draws in the people. So they do a lot of stuff
locally and in the community and that really pays off because their ice cream
shop is always slam busy. But they reach out, they let
people know they’re there. People who may not realize
that they’re there, and then give them an
incentive to come back. So something similar to
what you’re looking to do, like if you’re going to
do a market analysis, you wanna make sure that
you double check and see how it is that you’re going
to attract the local people. Figure that out. What would work best? Is it gonna be just a
local ad in the newspaper that’s giving out every
single day to the residents? Are you gonna join up with
some of the community centers and let them people know so, that’s something that you need to put in to let people know how
it is you’re actually going to attract people. You can’t necessarily just open a business and then cross your fingers
and hope people walk by. You gotta do something
to get them to come in. Okay so next up, you got the, this one’s kind of a really
cool and I like it a lot because it is a section that can allow you to kinda think outside
the box, when it comes to generating revenue. It’s gonna be your product line up. So the types of products that you’re gonna have in your lineup. So if you’re having a restaurant, what is your menu gonna be about? How much is it? What are the prices? Everything to the T as
far as you need to know what your costs are, obviously, in order for you to create a retail price. So you need to have that written down. A menu and a list of a food items that you’re gonna offer
in your restaurant. So what are the types of items, and why am I excited about this section? Well there’s a lot of
restaurants, and this is something a lot of people don’t think about. But there’s a lot of
restaurants that capitalize on the idea of driving sales through other merchandise, like T-shirts. If you’ve got a barbecue,
I know here in the South, we have a lot of barbecue restaurants, but a lot of them actually
sell hats, T-shirts, and you’d be surprised at
how much, on an annual basis, how much revenue all of those
extra streams of revenue, products and things really generate when you’re not just selling food, but your selling in the community, people begin to wear your T-shirt. They have your hat, or
they’ve got some stationery, whatever it is. They’ve got their local barbecue
logo on all of the stuff, so if you’re a big fan
of that barbecue place, you drop 24 or 30 bucks on a T-shirt, maybe 15, 20 bucks on a hat, and you sell a few
thousand of those a year, you could generate a lot of other revenue, without having to rely solely upon the food that you’re selling. So if you open, again, this
is all about a restaurant. If you open a bakery, maybe
you have a cute, little, whimsical bakery T-shirt with
a little character baking, but those types of
products too are something that can drive a lot of
sales and drive extra money, and they’re huge. Also is, you could sell them,
because they’re gonna make you a lot of money because you’re not having to make something for that. What I mean by that is that
you can get a T-shirt company to produce the T-shirts and
you’re just selling them. You’re not making the T-shirts, but if you’re spending
all day in the kitchen, you’re baking up all these baked goods, you’re spending a lot of
time generating the money, try to figure out other
way to sell products, right that you’re not having to make to generate other forms of revenue. So creating a product
line up in this scenario in a restaurant would be the menu. And then of course the pricing and such. Think about the other additional ways that you can generate revenue, not just through the sale of the food. Okay guys so this section is one that’s probably a lot of you
may not enjoy having to do but it’s definitely something
that’s super important and it would give you a good understanding and a good foothold on where
you wanna be financially. That’s gonna be the financial projections. So this is something
where you have to kinda be realistic and kind of
visionary at the same time. And I’ll explain what I mean. So what you wanna do
upfront is you wanna create financial statements that include personal financial
information about the people who are going to be the owners. If people are involved
with this financially, you want to kind of open up a little bit and let them know what kind
of assets that you have. What exactly is in your bank accounts? How much are you putting
forth in this endeavor? Are you gonna max out your credit cards and that type of thing,
which I highly would not recommend you do but if
you’ve got financials that are available where you
can use some funds of your own, I would definitely highly
recommend some of that prior to seeking financial assistance, outside of like a loan and such. Reason being is that a lot of times, one aspect of a bank,
and I sat in front of three different banks when
I seeked out our loan. When you sit in front of
them, and you tell them that you’ve taken the
risk financially as well, and it’s paid off, that is a big incentive and a big plus for
anyone making a decision on getting a loan for a
business, no matter what it is. It doesn’t have to be a food business. Any type of business
where you’ve put money up, and you’ve taken that risk, and you’ve kind of
pushed through the storms and the challenges of starting a business, and you’ve created a profit. You have a profitable product. People love that. And that also shows
financial responsibility and it shows the ability for
you to run a business, period. But when you’re seeking a loan, a banker’s gonna be much
more impressed with hey this guy put a 100,000 up and
turned it into half a million. I’m more comfortable giving you money, than oppose a guy that says
well, I put like $2000 up and I’m like a $100,000 in the hole. Doesn’t sound like you’re
really understanding what you’re doing. So financial predictions are great. And what I said earlier was
that you need to be realistic and also have a little bit of a vision, is that as you set the
goals for your first year, three years, five, seven years out, be not necessarily
conservative, but understand what you’re selling and
what you’re margins are and how much you think you can sell. So as you begin to create
these financial projections, you’re not living on the moon. You’re not living in Lala Land. If you start a business, in the
first year you did a 100,000 and the next year, you think
you’re gonna do five million, that’s pretty unrealistic. Unless you’ve got a big
pot of gold somewhere. So if you did a 100,000,
you said you know what, I could probably do about
250, maybe double that for the next year, that
seems a little more realistic and plus, this gives you
a little bit of a vision so you’re not living in Lala Land, thinking that you’re gonna be
doing a 100 or a 1000 times what you did in the first year. Lastly I wanna talk about is the appendix. It is the last section. It is to follow in the business plan. And what normally what is put in, let me just move these out of the way. What is normally put in the appendix is gonna be information that
recaps everything that you did. And what I mean by that is
actually gonna be a lot of times supporting documents, maybe some graphs, maybe some information, some printouts, some other hard copies of information that will support everything
you just talked about. What you wanna do is you
wanna give that person again, the perspective investor, the
opportunity for you to show what you have to prove what you spoke of. And that could be any
tidbit of information or graphs or anything you
think would give more validity to what you’re trying to do, and when you’re seeking that funding, or if you’re doing it just for yourself, it’s gonna reinforce basically
everything you spoke about in your business plan because
you’ve got documentation to kind of back it up or just
support what you’re saying. So in the appendix, again,
don’t make it too too long. Put a couple documents,
maybe a few documents in the back of it, and that’s
gonna be the final section of your business plan. So keep in mind, as business
plans and your business, actually as your business evolves, your business plan will change. And if it stays the same
for the first couple years, that’s great if you’re
achieving those goals. But everything evolves and grows and becomes something different
than it was when it started. I can attest to that with our business, what we did behind us
here is much bigger scale than when we first started out
selling a few things locally. It was a lot different. So be aware that it’s not in
concrete, it’s not in stone. Write a great business plan, give that and allow that to be the momentum you need (paper rustling) sorry about that, to get your business up and running, but keep in mind that it
will change as time goes on. So I hope that breaks down a
little bit of the information and I thank you guys for
bringing this up to me, in regards to this information
when I just put that video out there about business plan writing. So once you understand this,
then you can kinda go back to that other video and
get somebody to assist you on Fiverr to incorporate
all that information that we just spoke about. So if this was helpful, as always, please if you could give me a thumbs up. I appreciate you guys.

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2 thoughts on “Writing a business plan for food small business Examples of what to write

  1. This is a GREAT load of information to help you understand a FOOD BUSINESS PLAN and what goes into them. If you are it or have someone write one for you this is a MUST watch for ANY food entrepreneur.
    If you have questions and need one on one consulting one hour call WITH Damian schedule one here : http://bit.ly/2VSZKUm

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